Settlement talks fizzle in FERC case alleging Total gas market manipulation

A Federal Energy Regulatory Commission administration law judge has declared an impasse and recommended termination of settlement procedures in the alleged natural gas market manipulation case involving Total Gas & Power North America.

Despite exchanging offers and information, "the participants indicated that they would be unable to reach a settlement at this time" after the third settlement conference, Settlement Judge Joel deJesus wrote in his order (IN12-17).

In his final status report on the talks, deJesus Nov. 9 declared "an impasse" and recommend that settlement judge procedures be terminated, without prejudice to recommencing such discussions in the future. Settlement conferences were held on Oct. 15, Oct. 25, and Nov. 1.

At issue is a case in which FERC commissioners in July voted to set a hearing to determine whether TGPNA, Total, Total Gas & Power and former TGPNA trading managers Aaron Hall and Therese Tran violated Section 4A of the Natural Gas Act and the anti-manipulation rule outlined in FERC 's regulations during trading in the Southwest gas market in 2009 to 2012.

To facilitate settlement discussions, parties to the case, including FERC enforcement staff, on Sept. 24 jointly asked for an extension of the procedural schedule until Nov. 8, or roughly six weeks.

Chief Administrative Law Judge Carmen Cintron in a Sept. 28 order agreed to hold the proceeding in temporary abeyance until Nov. 8, "for good cause shown, to facilitate settlement" and agreed to extend the previously set procedural schedule by about six weeks.

FERC first issued a show-cause order in 2016 requiring TGPNA and two trading managers at the time in question to explain why they should not have to collectively pay nearly $226 million in civil penalties and disgorged profits for allegedly manipulating natural gas prices.

Acting about five years later, on July 15, FERC denied a motion to terminate the case and instead called for a new administrative law judge proceeding on the matter.

FERC staff in 2016 alleged that TGPNA, through Hall and Tran, deliberately traded to affect monthly gas indexes by transacting at prices and in ways that were designed to move index prices in a direction that benefited its related derivative positions.

Even ahead of the settlement efforts, Citron had agreed to allow an extended schedule for hearing the case, after the respondents pointed to the complexity of the case and the "extraordinary five-year delay" since the last FERC action in the matter. She agreed convene a hearing within 55 weeks, or by Aug. 15, 2022, and to reach an initial decision in the case within 76 weeks, or by Jan. 9, 2023.