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CORPORATION Commission hearing begins

Updated:

OKLAHOMA CITY (AP) _ An Oklahoma Corporation Commission official testified Monday that ``imprudent actions'' by Oklahoma Natural Gas Co. led to $72 million in overcharges to ratepayers last winter.

Kenneth R. Zimmerman, energy chief at the commission, was the leadoff witness in a hearing before the three-member panel, which regulates utility companies.

Don Sherry, ONG spokesman, called the overcharge allegations ``absolutely false.''

Zimmerman sought to rebut testimony filed by ONG defending its natural gas procurement procedures.

He accused the company of faulty analysis of the gas supply situation and failing to have enough storage to take care of its customers.

Also scrutinized in the report is ONG's decision to acquire more than 60 percent of its gas from one of its affiliates, ONEOK Energy Marketing and Trading, through a competitive bid contract.

The Commission staff contends ONG should have not purchased most its gas and storage as a package, but should have bid on the storage alone or with gas transportation.

Zimmerman accused ONG of faulty analysis of the gas supply situation, saying that as a result of ``these imprudent actions, the customers of ONG were exposed to the full shock of gas price volatility during the winter of 2000-2001.''

During his testimony, ONG attorney Stuart Campbell pointed to past statements by commission staff conceding difficulties in procuring gas supplies.

Sherry said not only does the company reject the notion of price gouging, ONG is still owed millions of dollars because of a previous commission ruling requiring the company to spread out a price increase over 12 months.

He said the company had worked with customers to try to ease a price spike that was national in scope.

``We took no actions to gouge customers or to take advantage of the price volatility in the marketplace,'' Sherry said, arguing ONG customers paid prices that were similar those of other states in the region.

The hearing was expected to last through Tuesday.

A related dispute centers on whether the commission has a right to look at ONEOK Energy Marketing's records of its gas sales to non-related third parties to see if it charged them more or less than it charged ONG.

The subsidiary refused to surrender the documents, saying the commission doesn't regulate the company.

An administrative law judge held the utility in contempt for not turning over the material.

A Sept. 14 hearing is set on ONG's appeal of that ruling.
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