FERC Approves Settlement Concerning Flipping by Local Utility With Gas Choice Program, Also OKs $725,000 Settlement With Affiliate Concerning Misclassification of Contracts

FERC approved a settlement agreement with DTE Gas Company (formerly Michigan Consolidated Gas Company) resolving an investigation into whether DTE Gas violated section 284.8(h)(2) of the Commission's regulations by engaging in flipping transactions.

According to FERC's order, DTE Gas has admitted to its violations and accepted responsibility for them. It has agreed to pay a civil penalty of $15,000.

Specifically, DTE Gas through its parent company DTE Energy self-reported to FERC Enforcement that it had engaged in fifty-four separate back-to-back capacity release transactions of interstate pipeline capacity (capacity releases) with five counterparties at less than the maximum rate without posting the releases for competitive bidding, in violation of the requirements of Part 284 of the Commission's regulations. The transactions related to the period through March 2006

DTE Gas released 4,395,000 Dth of capacity after the effective date of the Energy Policy Act of 2005 (EPAct). The capacity releases at issue involved 151 post-EPAct days of activity.

A separate settlement with Washington 10 Storage Corporation, another subsidiary of DTE Energy, addresses an investigation into the misclassification of thirty-two firm transportation storage and seventy-two Park and Loan (PAL) agreements as intrastate rather than interstate. Classifying these agreements as intrastate rather than interstate led to overcharging versus the maximum federal rate.

Washington 10 has agreed to pay a civil penalty of $725,000 and disgorgement of $2,508,227, plus interest

Docket No. IN13-10