The Federal Power Commission decided yesterday to investigate charges that last winter's criticalnatural gas shortage may have been a result of poor judgement on the part of a major supplier of natural gas to the Northern states.
The FPC was responding to allegations made by Sen. Howard H. Metzenbaum (D-Ohio) that Columbia Gas Transmission Corp., the major natural gas supplier to the Washington area, "imprudently" in selling off surplus natural gas supplies before the start of the winter heating season. The FPC decided yesterday to put the case before an FPC judge on an accelerated hearing schedule beginning April 11.
If the allegations are proven true, the commission can forbid the gas company from passing on to consumers the price of the gas they had to buy at higher rates to make up for the shortage. If not, Columbia could pass on the increased cost of the higher priced gas through a "purchased gas adjustment" provision in their contract with their clients.
According to Metzenbaum's complaint, Columbia's customers, which include Washington Gas Light Co., could be asked to pay double or quadruple the amount they normally pay-for their gas.
the fulcrum upon which the controversy turns was Columbia's decision last September to notify its customers that it had a surplus of national gas for them to purchase in October.
Later, with the advent of one of the worst winters in the country's history, Columbia was forced to buy addtional gas at higher prices and to curtail the amount of gas it supplied to many of its customers.
With temperatures plummeting to record lows last winter, Columbia probably would have run out of gas even if it had not sold off the surplus last October, a Metzenbaum spokesman said. The decision to sell the gas "aggravated" the shortage, he contended.
Columbia officials contend that "there is no basis for Sen. Metzenbaum's charge" and that "this shortage was created by the cold weather - pure and simple."
According to William H. Howard, senior vice president of the West Virginia-based company, Columbia's gas shortage resulted from "unusual volumes of high priority sales due to the cold weather, and not from any alledged poor business judgement."
Because of the shortage, Columbia curtailed its supplies to such customers as Washington Gas Light, which in turn asked its commercial customers to voluntarily lower thermostats to the minimum required to keep building pipes from freezing.
In addition, residential customers were asked to lower temperatures in their homes to 65 degrees.
Metzenbaum's complaint was filed last month with the response from Columbia. In its order for an accelerated hearing yesterday, the commission stated that "based on a review of the record" including the complaint and the response of Columbia, the commission finds that the issues raised in the complaint can not be finally resolved based solely on the present pleadings and representation of the parties.
The prehearing conference in April will set hearing dates, procudures to be observed and try to find areas of agreement between the two parties before moving into allegation, an FPC spokesman said yesterday.