Bangor Gas settles FERC's rule-violation charge

Bangor Gas Co. agreed to pay $1 million to settle a charge of violating the Federal Energy Regulatory Commission's "shipper must have title" requirement in the first civil penalty involving natural gas under FERC's new authority granted by the 2005 Energy Policy Act.

Nick Snow
Washington Correspondent

WASHINGTON, DC, Mar. 8 -- Bangor Gas Co. agreed to pay $1 million to settle a charge of violating the Federal Energy Regulatory Commission's "shipper must have title" requirement in the first civil penalty involving natural gas under FERC's new authority granted by the 2005 Energy Policy Act.

Commission policy requires shippers to hold title to gas they transport. FERC said the policy is designed to promote open access and to prevent undue discrimination for transmission capacity in primary and secondary markets.

Bangor Gas did not hold title to gas it transported for nine customers on 1.5 miles of pipeline in Maine, according to the charge. San Diego-based Sempra Energy owned the local distribution company when the violations occurred between July 2000 and September 2006 and reported the violations to FERC's enforcement office after discovering them during due-diligence research for the sale of the utility and its parent, Penobscot Natural Gas Co.

Sempra agreed on Feb. 5 to sell Penobscot and another gas utility holding company, Frontier Utilities of North Carolina Inc., to Energy West Inc. of Great Falls, Mont., for $5 million. The transactions require approvals of each state's public utilities commission before they become final.

FERC noted that Bangor Gas did not profit from the violations and agreed to submit compliance reports semiannually to the enforcement office for a year. The utility must pay the $1 million to the US Treasury within 10 days.

Contact Nick Snow at nsnow@cox.net.

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