Kinder Morgan refutes lawsuit allegations | PostIndependent.com
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Kinder Morgan refutes lawsuit allegations

Kinder Morgan defended its billing practices Wednesday, calling a lawsuit against the company unfounded. Responding for the first time to the lawsuit, the company said it does adjust rates to take into account elevation differences.The June 3 class-action lawsuit contends that the public utility company, which serves 45,000 people in the Roaring Fork Valley, has for 24 years purposely overcharged customers for natural gas by not taking into account the lower heating value of gas at high elevation. The cities of Glenwood Springs and Aspen filed the lawsuit, which represents all 23 communities served in the valley.”We want to be strong in making clear the allegations are untrue,” said Daniel E. Watson, president of retail for Kinder Morgan. The company is trying to point out that the Colorado Public Utilities Commission has jurisdiction over these matters, he said.As a public utility company, Kinder Morgan must adhere to rates and tariffs the PUC sets, as well as report all gas purchased by the company. When a consumer has a complaint, the normal course would be to contact the PUC directly, Watson said, but in this case, the lawsuit went directly to the courts without Kinder Morgan’s knowledge.But Jack Grynberg of Grynberg Petroleum Co., who is funding the lawsuit for the cities through his nonprofit company Colorado Consumers Legal Foundation, claims a new Colorado Supreme Court law allows for Glenwood Springs and Aspen to file a lawsuit directly, without going through the PUC. “I hate to see people being cheated, and they’ve been cheating for a long time now,” Grynberg said.At higher elevations, the density of natural gas decreases, dropping the heating value of the gas by 23 percent. Kinder Morgan adjusts rates downward to take the elevation into consideration by calculating the local billing pressure, Watson said, which is averaged for the Western Slope. These calculations, which Kinder Morgan offered as public information, are reviewed in annual filings with the PUC, Watson said.However, the LBP average leans unfavorably toward Aspen, said Aspen city attorney John Worcester.”The bottom line is that even if all gas bills are adjusted, Aspen is still paying 5 to 6 percent more than they should,” he said. Karl Hanlon, city attorney for Glenwood Springs, could not be reached for comment Wednesday.The lawsuit asserts that Kinder Morgan profits from its operations, although Watson said that the company does not receive any profits on the purchase and resale of gas. “If we buy $100, we’re going to sell $100, no more, no less,” Watson said. Kinder Morgan makes annual filings with the PUC to refund any gas “over-recoveries,” with interest, to consumers, and collects any under-recoveries without interest. Kinder Morgan does receive profit from transporting the natural gas, but none for service.Another aspect of the lawsuit claims that the company failed to meet the PUC’s minimum of 950 British thermal units. Attorney Michael L. Beatty provided a copy of the company’s tariff report, which stated, “At a base pressure of 14.73 pounds per square inch, the gross dry heating value of gas should not be less than 950 Btu or more than 1150 Btu.”At his residence in Aspen, Grynberg ordered an analysis by a Brighton independent company, Empact Analytical Systems Inc., to measure the Btu of his natural gas. The analysis showed that Grynberg’s Btu content is lower than required by the PUC at a pressure of 11.04 psia. The report also indicated gas components make up 8.16 percent of inert gases – nitrogen and carbon dioxide, which have no heating value. Grynberg said Kinder Morgan includes these inert gases when billing him for the total volume of his natural gas.Grynberg has collected more than $40 million in reparations from various public utility companies since the early 1990s, including Rocky Mountain Natural Gas, a branch of Kinder Morgan. Kinder Morgan, which supplies gas to roughly half a million people in three states, purchases all its natural gas from Colorado, including areas near Rifle. The company has 20 days to make a legal response to the lawsuit, Beatty said.”When it’s all said and done, these two cities are our customers,” Watson said. “We want to repair and rebuild relationships.”Contact Christine Dell’Amore: 945-8515, ext. 535cdellamore@postindependent.com


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