Natural gas issue back on the table
September 2, 2007
City officials want revive their three-year-old legal battle against natural gas companies, claiming they are overcharging Aspen customers.The city of Aspen sued Kinder Morgan Inc., Rocking Mountain Natural Gas and Rocky Mountain Gas Company in 2004, alleging that they are charging Aspen customers as much as 20 percent more than they should be because the rates are set at sea level and are not adjusted for high altitude areas.But the state court ruled that the issue should be dealt with by the Colorado Public Utilities Commission because the courts do not have the expertise to rule on the matter. City officials appealed the decision because at the time they had little faith that the PUC would rule in Aspen’s favor. Then Colorado Governor Bill Owens, a republican, had appointed commissioners who were pro business on the PUC.The Colorado Court of Appeals in 2006 upheld the lower court’s ruling. The case has been stagnant ever since.But now that a democratic governor has taken office, city officials are hopeful for a favorable outcome at the PUC level. Governor Bill Ritter, a democrat, has appointed new PUC commissioners, one of which is a consumer advocate.City Attorney John Worcester said it’s likely he will file a claim with the PUC. The complaint, which was a class action lawsuit and was joined by the city of Glenwood Springs, is a complicated legal argument. Worcester has 10 thick binders of documents related to the case.The crux of the argument is that the defendants are violating the Colorado Consumer Protection Act because they deliver and bill customers for natural gas based on its sea level heating content, although the gas has a lower heating content when sold at higher altitudes.Worcester argued that Aspen’s commercial and industrial customers pay more for the heating content value of natural gas than people who live at lower altitudes.The PUC establishes the rates gas companies charge. The transportation rate is established by determining the cost of providing transportation services, plus a reasonable profit. The PUC also establishes rates for the gas sold, but does not allow any profit on sales because the utility makes a profit on its transportation services.The city of Aspen alleges that the utility companies are using deceptive trade practices and collecting more money than what’s legal. The suit alleges that the PUC erroneously approved the rates and city officials hope the new commission will acknowledge that.City Councilman Jack Johnson, who is familiar with the case, said he is willing to bring the issue back into the legal arena.”Some interesting arguments were made and I have a great deal of faith in our city attorney,” he said.Mayor Mick Ireland, an attorney, said the case is consumer protection issue.”It’s worth re-examining the merits of that litigation,” he said.