Nick Snow
OGJ Washington Editor
WASHINGTON, DC, Sept. 22 -- Energy Transfer Partners LP agreed to pay $30 million to settle US Federal Energy Regulatory Commission charges that the Dallas limited partnership manipulated wholesale natural gas prices at the Houston Ship Channel on specific dates from 2003 through 2005, FERC said.
The settlement is the highest amount of any related to an enforcement action since Congress gave the commission enhanced enforcement authority under the 2005 Energy Policy Act, it added.
FERC said the settlement ended proceedings that began on July 27, 2007, when the commission issued a show-cause order directing ETP to address the manipulation allegations. It said it later set the matter for hearing before an administrative law judge, and the parties subsequently reached a settlement.
FERC said under the settlement ETP will pay a $5 million fine and establish a $25 million fund to disgorge alleged unjust profits to entities that file claims within 60 days of the order’s publication in the Federal Regulation. If any money remains when the allocation process ends, it will be paid to the US Treasury, FERC said.
It said ETP also agreed to comply with FERC’s antimanipulation rule and to ensure that its compliance program included specific safeguards for its commodity trading and risk management practices. It added that the partnership also agreed that an independent auditor will conduct an audit of ETP’s compliance program and trading activity in each of the next year and provide its reports to FERC staff members.
The action brought against ETP likely will be the only case arising under original market behavior rules promulgated following the 2000-01 Western US energy crisis, according to FERC. Those rules were later rescinded in favor of the antimanipulation rule implemented with new authority under EPACT, it said.
FERC said ETP previously settled other allegations with the US Commodity Futures Trading Commission, acting under separate statutory authority, for $10 million.
Contact Nick Snow at [email protected].