Pipeline to Pay $315,000 in FERC Settlement Over Title Transfer and Tracking Fees Charged to Shippers

Enterprise Texas Pipeline LLC will pay a civil penalty of $315,000 under a settlement approved by FERC to resolve allegations that the company violated Section 311 of the Natural Gas Policy Act and various FERC regulations.

Specifically, FERC Staff alleged that Enterprise Texas charged its shippers a title transfer and tracking (TTT) fee without seeking Commission authorization and without posting the fee in the company's Commission-approved Statement of Operating Conditions (SOC).

Enterprise Texas has already made refunds to its customers in the amount of $7.2 million with interest related to the TTT fees.

In 2012, Enterprise Texas self-reported to Enforcement that it had been charging its customers an unauthorized TTT fee since it acquired the company in 2004. In the self-report, Enterprise Texas explained that it provided a TTT service to shippers in which Enterprise Texas kept track of the "daisy chain" of gas supply transactions conducted by shippers at the Waha Hub in western Texas. From 2004 to 2005, the TTT fee was $.002 per Dth. In 2005, Enterprise Texas increased the fee from $.002 per Dth to $.005 per Dth.

Although Enterprise Texas provided the TTT service and charged the TTT fee over seven years, the TTT fee had never been included in its Commission-approved SOC or otherwise authorized by the Commission. Enterprise Texas claimed that a prior owner of the company charged the fees and that Enterprise Texas continued the practice without determining whether it was consistent with Commission statutes or regulations. Staff did not find any evidence that Enterprise Texas acted intentionally to deceive its customers or the Commission when it charged the TTT fees.

Section 284.123(b)(2) of the Commission's regulations require that all NGPA Section 311 pipelines seek Commission approval of their proposed rates and charges by filing with the Commission the proposed rates and charges in the form of a SOC. Staff alleged that Enterprise Texas violated Section 284.123(b)(2) of the Commission's regulations and its Commission-approved SOC by assessing TTT fees without Commission authorization. In reviewing the matter, Staff considered the Commission's precedent on volumetric-based TTT fees. The Commission has repeatedly rejected volumetric-based fees, such as the ones charged by Enterprise Texas, because any costs associated with a title transfer are more a function of the total number of transactions as opposed to the total volumes transferred

Enterprise Texas neither admits nor denies the violations

Docket No. IN13-16