FTC to Challenge Questar Acquisition of Kern River, Alleging Monopoly Over Natural Gas Transmission into Salt Lake City Area

For Release

The Federal Trade Commission said today it will seek a federal district court order to bar Questar Corporation from going ahead with plans to acquire a 50 percent ownership interest in Kern River Gas Transmission Company from Tenneco, Inc. The FTC will allege that the acquisition will allow Questar to reassert a monopoly over the transmission of natural gas to industrial customers in the Salt Lake City area.

Questar is based in Salt Lake City; Kern is a subsidiary of Tenneco, which is a Houston, Texas-based company.

According to the FTC, Questar was the only company with a pipeline into the area for many years until Kern River opened its pipeline in 1992 and began actively competing with Questar for industrial customers. The acquisition would give Questar a 50 percent interest in the Kern River pipeline and therefore substantially reduce competition between them, leading to higher prices and other anticompetitive effects.

The FTC will seek from the federal district court a preliminary injunction that would bar Questar from completing the transaction, pending the outcome of an administrative trial on the case and any appeals. If the judge grants the FTC's motion for a preliminary injunction, the Commission will have 20 days within which to issue an administrative complaint detailing the ways in which the transaction would violate federal antitrust laws. That complaint would mark the beginning of the administrative trial process.

The Commission vote to authorize the federal district court filing was 5-0.

NOTE: The Commission files a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of a complaint is not a finding or ruling that the defendant has violated the law.

The complaint marks the beginning of a proceeding in which the allegations will be ruled upon after a formal hearing.

Copies of the complaint will be available upon filing in court from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov

(FTC File No. 961 0001)

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