Corporation Commission weighing depositions over gas contract

Thursday, January 13th 2000, 12:00 am

By: News On 6

OKLAHOMA CITY (AP) -- A ratepayer attorney says depositions of five current and former officials with Oneok Inc. and its Oklahoma Natural Gas subsidiary will help determine if ratepayers will pay millions more than necessary because of a gas supply contract. Russ Walker told members of the Oklahoma Corporation Commission on Wednesday that depositions are necessary to explore the motives behind ONG's decision to enter into a 10-year supply contract with Dynamic Energy Resources. "All of these gentlemen have information as to whether prices paid to Dynell Walker."

The two claim in a filing initially made in April 1998 that the supply contract will cost ONG ratepayers $65 million too much in pass through costs during the life of the agreement. The rate making commission is expected to make a decision soon on requiring the depositions.

Connie Moore, an administrative law judge, ruled in favor of the request for depositions. The company appealed that decision to the three-person commission. Vicky Hale, an attorney for the company, said the terms of the contract, now public, should be enough to determine that prices are reasonable.
ONG spokesman Don Sherry said the depositions would constitute harassment of company officials when all necessary information is readily available.

Company officials have repeatedly said prices dictated by the 1993 gas supply contract are similar to those under contracts with other suppliers. The company contends that ratepayers are incorrectly calculating the overcharge by comparing the long-term contract purchase price to prices under short-term contracts that can expire after a month or so. The utility buys gas only under longer term contracts that ensure a steady supply, Sherry said.

Officials said the Corporation Commission staff concluded there was nothing improper about the Dynamic contract. The ratepayers want depositions, or sworn testimonies taken down in writing, from Oneok Chairman Larry Brummett, former chairman J.D. Scott, Oneok President David Kyle, Oneok Gas Transmission President Steve Guy and Oneok General Counsel John Gaberino.

Commission Chairman Bob Anthony has sparred with company officials over the propriety of the 1993 contract and ONG's dealings with Gene and Nora Lum, officials with Dynamic Energy. The Lums pleaded guilty to a felony charge that they arranged to pass $50,000 through "straw donors" to congressional candidates in 1994.

Officials contend that excessive profits from the Dynamic contract were the source of political donations. Brummett has said Oneok has been subjected to "rumors, false allegations and innuendo" that could sink a $1.8 billion merger with Las Vegas-based Southwest Gas. The Arizona Corporation Commission staff recently said it opposed Oneok's proposed takeover of Southwest.