Corporation Commission, ONG may be close to settlement
Thursday, April 25th 2002, 12:00 am
By: News On 6
OKLAHOMA CITY (AP) _ The Oklahoma Corporation Commission and Oklahoma Natural Gas are close to an agreement that would end disputes over what ONG paid for natural gas in the past.
Settlements are being negotiated in two cases involving fuel purchases by ONG _ one in 1993 and the other during the winter of 2000-01.
At an Oklahoma Corporation Commission hearing Wednesday, attorneys said they were close to a broad-based deal. A final ruling by the commissioners could come as soon as Tuesday.
One source close to the negotiations told The Daily Oklahoman that one figure being discussed was $34 million. If that were case, the money would average out to about $43 per customer.
``We have been in settlement negotiations with all parties to try to resolve a number of outstanding cases that involved ONG, and we have made substantial progress in those settlements,'' ONG attorney Jay Galt told commissioners.
The settlement involves commission cases that allege ONG paid too much for natural gas, then resold it to customers at those inflated prices. Under current regulations, ONG must charge customers the same price it pays for gas, expenses included.
Total claims against ONG stemming from the two cases is about $80 million, not including claimed interest.
One of the cases involves a long-term gas-buying deal made by ONG in 1993. Plaintiffs Michael E. McAdams and John P. Walker allege that ONG's deal with Dynamic Energy gave preferential treatment to Dynamic and ONG customers paid too much for that gas as a result.
Two expert witnesses in the case concluded that ONG owes customers about $45 million as a result of buying gas through the Dynamic deal.
The second case involves ONG's gas-buying practices during the winter of 2000-01, when natural gas prices and utility bills climbed to record-setting levels.
Commissioners decided that ONG had not bought its gas prudently enough during that turbulent period and ruled the utility could not collect $34.6 million still owed to it by consumers. ONG appealed the case to the Oklahoma Supreme Court, but has gone on to collect the money.
ONEOK, parent company of ONG, has already written off the $34.6 million _ the same amount of the possible settlement total _ as a loss against fourth-quarter earnings.
The company has posted a bond in case the state's high court disagrees with ONG and orders it to return the money to customers.