BNP Paribas Wins Appeal of FERC Ruling on Gas Storage

BNP Paribas SA (BNP)’s energy trading unit won a ruling from the U.S. Court of Appeals in Washington that the Federal Energy Regulatory Commission used an incorrect formula in assigning costs for natural gas storage.

The dispute involved payments by storage facility customers for new “base gas” needed to maintain pressure so gas can be shipped.

FERC ruled that the cost of new base gas should be borne by new customers of the storage facility, including BNP Paribas, instead of by all customers in proportion to their usage.

FERC failed to show how “the historic customers did not share proportionately in the benefits provided by the new base gas,” U.S. Circuit Judge Stephen Williams wrote for the three-judge panel.

The court threw out the agency’s regulation and sent it back for reconsideration.

Mary O’Driscoll, a FERC spokeswoman, said in an e-mail that the commission doesn’t comment on court rulings.

The case is BNP Paribas Energy Trading GP v. Federal Energy Regulatory Commission, 12-1242, U.S. Court of Appeals, District of Columbia (Washington).

To contact the reporter on this story: Andrew Zajac in Washington at azajac@bloomberg.net

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