Consumers overcharged for natural gas


WASHINGTON -- Consumers might have paid millions of dollars too much for natural gas because the government failed to detect illegal overcharges, a new congressional report says.

In releasing the report Monday, Rep. John Dingell, D-Mich., pointed the finger of blame at the Federal Energy Regulatory Commission, which oversees natural gas pricing laws.


'Through lack of interest or sheer incompetence due to primitive data collection and methods, (FERC) may simply have failed to enforce (Natural Gas Policy Act) ceiling prices for older vintages of old gas,' said Dingell, who heads the House Energy and Commerce panel that sponsored the report.

The report found that more than 10 percent of price-controlled gas from wells drilled before 1973, what is known as the 'oldest, old gas,' sold for more than the maximum allowed by law in mid-1982. A staff member said the overcharges could run into the millions of dollars.

The report, prepared by staff of Dingell's oversight and investigations subcommittee, strongly suggested producers might have charged more than they should for some categories of the oldest natural gas. But what it found more troubling is that FERC is not able to detect whether there have been systematic overcharges.


'The shocking conclusion ... is that whether or not there have been pricing violation for 'old, old' gas under (the law), FERC has been in no position to know since the act was passed in 1978,' Dingell stated.

The problem is that FERC does not keep records on the oldest categories of gas by drilling dates, which determine the maximum lawful price allowed by law, making it difficult to doublecheck whether producers are charging the right prices.

A copy of the report was given to FERC, and a response is due in 30 days.

'I guess (Dingell) wants a plan of action to acquire the capability to enforce price ceilings for various vintages of natural gas,' said FERC spokesman Rachelle Patterson, 'and, of course, the commission has never, ever turned down a request by Chairman Dingell.'

The report also charts the source of price increases for all categories of gas since the 1978 natural gas pricing law.

Dingell said the results prove there is no reason to decontrol the oldest, cheapest gas as the Reagan administration has advocated in the past.

That reinforces his influential position in the House in favor of continuing price ceiling on old gas, putting him at odds with a measure now pending before the Senate that would lift price controls on cheap, old gas drilled before 1977.


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