The Brattle Group's Testimony Contributes to Federal Energy Regulatory Commission's Market Manipulation Case Against Energy Transfer Partners
Posted on: Monday, 21 September 2009, 17:13 CDT
CAMBRIDGE, Mass., Sept. 21 /PRNewswire/ -- Testimony provided by The Brattle Group was a key component of the Federal Energy Regulatory Commission's (FERC) market manipulation case against Energy Transfer Partners, L.P. (ETP), which was formally settled today when the FERC approved the agreement reached between the FERC's Enforcement Litigation Staff and ETP. The settlement agreement requires ETP to make payments of $30 million, of which $25 million will be paid into a fund for the benefit of claimants through which ETP will disgorge alleged unjust profits earned as a result of its alleged conduct.
In 2007, the FERC issued a show cause order that made preliminary findings that ETP had manipulated natural gas prices at the Houston Ship Channel (HSC) during the period December 2003 through December 2005. The FERC Enforcement Litigation Staff claimed that ETP manipulated natural gas prices by suppressing them to benefit ETP's financial trading positions. ETP responded that it did not engage in market manipulation.
The Brattle Group was retained in early 2008 by the FERC's Enforcement Litigation Staff to analyze ETP's trading activity in the HSC natural gas market during the 25-month time period in question. Dr. Paul Carpenter, a principal of The Brattle Group, submitted expert testimony that concluded that ETP's actions in 17 of the 25 months resulted in a price lower than what would have been determined by the normally-operating forces of supply and demand. Dr. Carpenter determined that ETP intended to manipulate the price of gas at the HSC in order to profit from its financial trading positions at HSC. Dr. Carpenter also responded to testimony submitted by ETP's experts. The hearing on this matter was scheduled for July 2009; however, settlement discussions were initiated prior to the hearing and a settlement was filed with the FERC in August 2009.
Dr. Carpenter, the lead economist on the case, commented, "The ETP matter demonstrates the importance of continued oversight of U.S. natural gas markets. It is critical to ensure that reported price indices are reliable and not subject to manipulation. As a matter of public policy, federal regulators should continue to protect against price manipulation, whether that manipulation results in upward or downward price impacts."
Public versions of The Brattle Group's direct and rebuttal testimony (Docket No. IN06-3-003) are available at www.ferc.gov.
The Brattle Group provides consulting services and expert testimony in economics and finance to corporations, law firms, and public agencies worldwide. Areas of expertise include antitrust and competition, valuation and damages, utility regulatory policy and ratemaking, and regulation and planning in network industries. For more information, please visit www.brattle.com.
SOURCE The Brattle Group
Source: PR Newswire
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