CORPORATION Commission hearing begins Monday in overcharge dispute

Sunday, June 24th 2001, 12:00 am

By: News On 6

OKLAHOMA CITY (AP) _ The Oklahoma Corporation Commission will consider next week whether Oklahoma Natural Gas Co. paid as low a price as possible when acquiring natural gas for its customers last winter.

In a hearing scheduled for Monday and Tuesday, the commission will hear arguments on whether ONG's actions resulted in a $72 million overcharge to its customers and if the utility should be required to refund the money.

``We just absolutely reject the assertion of staff that we were imprudent or irresponsible, and we certainly reject the conclusion that there were overcharges or that refunds are in any way merited,'' ONG spokesman Dan Sherry said Friday.

Sherry said the company acquired natural gas in a way that provided customers with prices ``that were competitive with others in the region.''

Ernest G. Johnson, director of the commission's public utility division said ONG did not act with the best interest of ratepayers, resulting in excessive gas costs for customers.

ONG acquired 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 criticized ONG for purchasing most of its gas and gas storage as a package instead of bidding on the storage alone or with gas transportation.

The staff said as a result, ONG customers were ``exposed to the full shock of gas price volatility'' during the past winter, one of the coldest in years.

Sherry said ONG customers didn't suffer any more than customers of other gas utilities around the country.

``In fact, even though it's hard to appreciate this, I understand, but they suffered less. That's not to suggest for a moment that it was not difficult. It was.''

Mired in the dispute is whether the Corporation 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.

ONG is appealing that ruling in a hearing set for July 14.