FW: El Paso Had Market Power

Jo, here is the message on the EPNG Marketing Affiliate case. =20

Thanks, Kim.

-----Original Message-----
From: =09Butler, Janet =20
Sent:=09Tuesday, August 28, 2001 4:45 PM
To:=09Alvarez, Ray; Bagot, Nancy; Benner, Martha; Benson, Eric; Blair, Lynn=
; Boatman, Jack; Bradley, Rob; Branney, Theresa; Brennan, Lorna; Briggs, To=
m; Butler, Janet; Comnes, Alan; Cordes, Bill; Corman, Shelley; Culwell, Chr=
isti; Daniel, Shonnie; Darveaux, Mary; Dietz, Rick; Dornan, Dari; Dushinske=
, John; Farrell, Sharon; Fossum, Drew; Fulton, Donna; Goodpasture, John; Ha=
mmond, Pearce; Harris, Steven; Hartsoe, Joe; Hass, Glen; Hayes, Robert; Hay=
slett, Rod; Heckerman, Bambi; Hess, Theresa; Hill, Robert; Holmes, Bradley;=
Holtzman, Staci; Hopkins, Tamara; Horton, Stanley; Huber, Lee; Janousek, M=
artha; January, Steven; Kean, Steven J.; Kilmer III, Robert; King Jr., Fraz=
ier; Kirk, Steve; Kissner, Tim; Lantefield, Laura; Lawrence, Linda L.; Lich=
tenwalter, Blair; Linnell, Elizabeth; Loeffler, Michael; Lokey, Teb; Lowry,=
Phil; Mann, Ruth; Mara, Susan; Martens, Donna; McCoppin, Dorothy; McGowan,=
Mike W.; Miller, Mary Kay; Miller, Terri; Nacey, Sheila; Nelson, Kimberly =
(ETS); Neppl, Ray; Neubauer, Dave; Neufeld, Eva; Neustaedter, Robert; Nicol=
ay, Christi L.; Novosel, Sarah; Paladino, Ranelle; Palmer, Maureen; Paschal=
, Zelda; Patterson, Geneva; Pavlou, Maria; Petersen, Keith; Place, Janet; P=
orter, Gregory J.; Pribble, Dan; Pryor, Tony; Raker, Colleen; Rice, Randy; =
Ringblom, Kathy; Robertson, Linda; Saunders, James; Sawyer, Lisa; Scott, Do=
nna; Shafer, John; Shapiro, Richard; Smith, Mike; Soldano, Louis; Stanton, =
Lon; Steffes, James D.; Sullivan, Kathleen; Talcott, Jim; Taylor, Gina; Tu,=
Denis; Van Norden, Mike; Veatch, Stephen; Vignaroli, Donald; Warner, Jody;=
Watson, Kimberly; Wilkie, Kim; Wilson, Jane; Wilson, Rob; Winckowski, Mich=
ele; Wininger, James; Yoho, Lisa
Subject:=09El Paso Had Market Power

In a release from Natural Gas Intelligence according to FERC staff counsel,=
El Paso Natural Gas and El Paso Merchant Energy possessed market power dur=
ing the summer of 2000 and violated FERC's marketing affiliate standards. T=
he article states that El Paso had market power after May 2000 for at least=
two months when pipeline capacity constraints created a separate relevant =
geographic market in California. The evidence pointed to the now-infamous F=
ebruary 7 and 9, 2000 telephone conversations showing that the operating em=
ployees of El Paso Merchant, El Paso Natural Gas and Mojave Pipeline "were =
not functioning independently," according to staff counsel.=20

The phone conversations took place just days before El Paso pipeline began =
its open season for 1.22 Bcf/d of firm, capacity on its system (bound for C=
alifornia), all awarded to El Paso Merchant.

Before and during the open season, EPME gained new information about the re=
structured long-term tiered discount on Mojave to Wheeler Ridge while poten=
tial non-affiliate shippers were not according to counsel. As a result, cou=
nsel find that EPME's group had an undue competitive advantage with the new=
Mojave discount generating a successful bid for the El Paso pipeline capac=
ity.=20

FERC Chief ALJ Wagner is expected to issue an initial decision in early Oct=
ober.