Subpoenas Follow Price Hikes

Subpoenas Follow Price Hikes

Jul 17 - Power Economics

FEDERAL AUTHORITIES in the US have issued subpoenas on a number of energy companies as part of an on-going investigation into the steep price hikes last autumn.

Between October and December 2003 natural gas prices drastically rose almost 50 per cent, an unprecedented hike in recent times.

The Commodity Futures Trading Commission (CFTC) delivered the subpoenas against Duke, El Paso Corp., CenterPoint Energy and ONEOK in April, according to reports.

The investigation was initiated following allegations in recent years that utilities had reported false trading volumes and prices to industry trade publications.

Emerging from a Senate agriculture committee CFTC chairman James Newsome refused to give details, but did confirm the subpoenas were issued. "That elates back to our review of the spike last fall and the subpoenas those companies have made public are part of our ongoing investigation in that area".

Duke announced that its subpoena was related to storage information it provides to the Energy Information Administration (EIA) on a weekly and monthly basis. The EIA data is analysed by traders tracking US natural gas supplies, who often use this data to identify trends in the supply of natural gas make trading decisions.

Duke spokesman Pete Sheffield told Reuters: "We don't believe that there are any problematic issues related to Duke Energy Gas Transmission's submissions to ElA... or the information we have provided to the CFTC." Two other utilities, Dominion Resources and National Fuel Gas Co, said they had not received subpoenas related to this investigation, but have provided information and 'voluntary testimony' to the CFTC all the same.

According to the Wall Street Journal, the CFTC has previously sought phone records from floor traders in its probe into the higher prices.

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