Ontario tenants rights Ontario landlord and tenant act Ontario Residential Tenancies Act Ontario government Poverty research Apartments for rent Ontario Hydro Search Ontario tenants rights
Toronto apartments for rent

Six firms settle over gas index reporting

Latest penalties set at $50 million

Houston Chronicle - January 28, 2004
By Laura Goldberg


Six more companies, including Houston-based Entergy-Koch Trading and a Houston-based subsidiary of Calpine Corp., have reached settlements with commodities regulators related to reporting data for energy price indexes.

The $50 million worth of civil penalties detailed Wednesday bring total fines levied by the U.S. Commodity Futures Trading Commission to $180 million, after investigations into reporting for natural gas price indexes.

Natural gas indexes are produced by trade publications and organizations that survey energy traders and others, including producers, about gas deals. Indexes, in turn, are used by some buyers and sellers of natural gas to help set prices in contracts.

The commission said Wednesday that administrative orders related to false reporting of data had been filed and simultaneously settled. In each, companies neither admitted nor denied findings in the settlement orders.

Aquila Merchant Services, a subsidiary of Missouri-based Aquila, agreed to pay $26.5 million, and e prime, a subsidiary of Minnesota-based Xcel Energy, agreed to pay $16 million. In those cases, false reporting and attempted manipulation of natural gas prices were the charges settled.

The remaining cases concerned just charges of false reporting.

Entergy-Koch Trading agreed to pay $3 million; Oklahoma-based Oneok and its subsidiary, Oneok Energy Marketing and Trading, agreed to pay a total of $3 million; and Calpine Energy Services will pay $1.5 million.

In the Entergy-Koch Trading case, the commission concluded that from at least February 2001 through October 2002 traders reported deals that didn't occur there as their trades, and reported false prices or volume information.

"This settlement allows us to move forward, and we do so with more rigorous procedures, controls and internal oversight in place," Kyle Vann, chief executive officer of Entergy-Koch, the parent of Entergy-Koch Trading, said in a prepared statement. Entergy-Koch is a joint venture between Entergy Corp. and Koch Industries.

In the Calpine Energy Services case, the commission said that from at least September 2001 through October 2002, one trader reported certain trades at false prices or volumes and reported trades that didn't occur. The trader is no longer employed by Calpine.

The highest settlement fine levied by the commission in such cases was $28 million against a Houston-based Duke Energy Corp. joint venture.

Other Houston companies to settle with the commission related to false reporting include units of El Paso Corp., Dynegy and Reliant Resources.

Fines go to the U.S. Treasury for general government purposes.

The commission has ongoing investigations related to index reporting.

Gregory Mocek, director of the commission's division of enforcement, said Wednesday the cases add "transparency" to the world of natural gas trading by shedding light on improper conduct. "By doing that, we revealed not only how the process worked, but also how it was flawed," he said. "The companies, by and large, have made great strides to insert compliance measures into the reporting process, and we're seeing that as these investigations unfold."

The Federal Energy Regulatory Commission has also been involved in the issue of index reporting, both investigating the matter and working with industry participants on overhaul efforts.

The U.S. attorney's office in Houston brought criminal charges related to index reporting against two former individual traders. One, former El Paso trader Todd Geiger, stuck a plea deal with prosecutors in December. He pleaded guilty to one count of reporting of inaccurate information. His sentence is pending.



  North York apartments for rent
  Ottawa apartments for rent
  Oakville apartments for rent
  Mississauga apartments for rent
  Toronto Lawyers & Paralegals
  Ottawa Lawyers & Paralegals

Places to visit on the site:
Ontario Tenants homepage         |       Residential Tenancies Act       |     Finding an apartment
Ontario Landlord and Tenant Q&A   |   Housing and poverty reports   |   Elections
Tenant rights and social justice     |     Renters muncipal issues     |     Rent Control
Apartment safety & security  | Tenant health: Toxic mould, cockroaches  | Consumer Information
Tenant association organizing   |    Utility costs: Ontario hydro, natural gas   |    Ontario MPP list