El Paso Merchant Ordered to Relinquish Data

FERC yesterday ordered El Paso Merchant Energy to stop stonewalling and turn 
over protected materials to parties involved in a complaint case in which 
it's alleged the affiliate received preferential treatment when it acquired 
1.2 Bcf/d of firm capacity on El Paso Natural Gas. 

Specifically, the Commission denied El Paso Merchant's request for rehearing 
of a June 2000 order that granted in part the discovery sought by the 
California Public Utilities Commission, and rejected rehearing of a September 
protective order. The latter directed El Paso Merchant to make available to 
all intervening parties, who agreed to the terms of the protective order, all 
of the materials that were being submitted to the CPUC and FERC in the case. 

So far, El Paso Merchant has refused to release the information to these 
parties, claiming the materials being filed with the CPUC and FERC are for 
"Government Eyes Only." It also argues that the protective order offers 
inadequate protection of commercially sensitive information. 

The Commission disagreed. "El Paso Merchant has not substantiated or 
sufficiently justified its broad claim that all of the 'protected materials' 
provided to CPUC and this Commission warrant the designation 'Government Eyes 
Only.' Indeed, all of the information that El Paso Merchant seeks to 
shield...relates directly to the issues," the order said [RP00-241]. Also, 
FERC finds that the protective order provides "sufficient protection for El 
Paso Merchant's commercially sensitive documents." 

The CPUC brought the complaint last April. It is seeking to abrogate the $38 
million contract arrangement between El Paso and El Paso Merchant. The agency 
alleges the affiliate was given "preferential treatment" by El Paso during 
the open season for the capacity, and thus the contract arrangement should be 
declared void. 

The CPUC and others contend the contract arrangement, which awarded more than 
one-third of El Paso's capacity rights to the California border to El Paso 
Merchant, is largely responsible for the high natural gas and electric prices 
in the state. They have urged FERC to "act immediately" on the merits of the 
complaint, but the Commission has yet to do so.