published Monday, July 8th, 2013

Chattanooga Gas customers retain benefits of mistake made by ConocoPhillips

NASHVILLE — Local customers of Chattanooga Gas will continue to enjoy the full benefits of a $735,000 penalty paid by ConocoPhillips in 2012.

Last week, the energy giant abandoned its effort to get state regulators to eliminate or at least cut the assessment.

ConocoPhillips attorney Tom Midyett last week notified the Tennessee Regulatory Authority the company was withdrawing its request to cut the penalty almost in half. Authority directors have rejected the proposal twice, most recently on June 17.

The Houston-based company ships natural gas to the Invista manufacturing plant in Chattanooga through intermediary Chattanooga Gas. The problem started when no gas was shipped from December 2010 to Jan. 6, 2011.

ConocoPhillips said it was a scheduling mistake caused by human error and the gas went elsewhere. The company argued Chattanooga Gas customers weren't harmed by the diversion.

But the act drew a penalty under Chattanooga Gas' tariff -- a state-approved rate and service schedule. The penalty is distributed to the company's residential, commercial and industrial customers as credits against their gas purchases.

Efforts to reach Mike Hastings, a ConocoPhillips official, were unsuccessful. He had previously declined to comment after the TRA on June 17 rejected the company's request to rehear its petition.

Tennessee Attorney General Robert Cooper's office, which represents consumer interests through its Consumer Advocate and Protection Division, said in a statement that "the ultimate outcome of this case saves the ratepayers of Chattanooga a considerable amount of money and preserves regulatory policies intended to protect the household and business customers of Chattanooga Gas Co."

ConocoPhillips could have pushed for a full-blown case with evidence before the TRA. But attorneys familiar with rate hearings said that, having lost twice, ConocoPhillips could spend a lot of money for only a slim chance the authority would reverse.

As a result of dropping the matter in an intermediate regulatory stage, the company cannot appeal the case to the state Court of Appeals, attorneys said.

Contact staff writer Andy Sher at asher@timesfree or 615-255-0550.

about Andy Sher...

Andy Sher is a Nashville-based staff writer covering Tennessee state government and politics for the Times Free Press. A Washington correspondent from 1999-2005 for the Times Free Press, Andy previously headed up state Capitol coverage for The Chattanooga Times, worked as a state Capitol reporter for The Nashville Banner and was a contributor to The Tennessee Journal, among other publications. Andy worked for 17 years at The Chattanooga Times covering police, health care, county government, ...

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