9910046
B257729

UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

COMMISSIONERS:
Robert Pitofsky, Chairman
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle

In the Matter of

CMS Energy Corporation, a corporation.

DOCKET NO. C-3877

DECISION AND ORDER

The Federal Trade Commission ("Commission"), having initiated an investigation of the proposed acquisition of the voting securities of Panhandle Eastern Pipe Line Company ("Panhandle"), Panhandle Storage Company, and Trunkline LNG Company ("Trunkline"), now held by Duke Energy Company, its subsidiaries or affiliates, by CMS Energy Corporation ("CMS"), and it now appearing that CMS, hereinafter sometimes referred to as "Respondent," having been furnished with a copy of a draft complaint that the Bureau of Competition proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge Respondent with violations of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. 45, and Section 7 of the Clayton Act, as amended, 15 U.S.C. 18; and

Respondent, its attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by Respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by Respondent that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission's Rules; and

The Commission having thereafter considered the matter and having determined that it had reason to believe that the Respondent has violated the said Acts, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following Order:

1. Respondent CMS is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Michigan, with its office and principal place of business at 330 Town Center Drive, Dearborn, Michigan 48126.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the Respondent, and the proceeding is in the public interest.

ORDER

I.

IT IS ORDERED that, as used in this order, the following definitions shall apply:

A. "Respondent" or "CMS" means CMS Energy Corporation, its directors, officers, employees, agents, representatives, predecessors, successors, and assigns; its joint ventures, subsidiaries, divisions, groups and affiliates controlled by CMS, including but not limited to Consumers Energy Company, a wholly-owned subsidiary of CMS Energy Corporation, and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.

B. "Adjusted Designated Capacity" means Designated Capacity less the amount by which capacity is reduced for maintenance or force majeure.

C. "Amount Confirmed" means the Amount Nominated that Consumers Energy Company matches to corresponding recipients (i.e., customers, brokers, marketers, or storage accounts) at an Interconnection Point.

D. "Amount Nominated" means the amount of natural gas that a shipper proposes to deliver to Consumers Energy Company at an Interconnection Point.

E. "Available Interconnection Capacity" means the amount of natural gas that Consumers Energy Company is ready, willing, and able to receive at an Interconnection Point.

F. "Commission" means the Federal Trade Commission.

G. "Consumers Energy System" means the natural gas transmission system of Consumers Energy Company.

H. "Designated Capacity" means the capacity for each Interconnection Point as stated in Exhibit A.

I. "Interconnection Point" means the eight interconnection points listed in Exhibit A, as points where Consumers Energy Company receives gas into its system.

J. "MPSC" means the Michigan Public Service Commission.

K. "Recorded Throughput" means the data obtained electronically by Consumers Energy Company from its Supervisory Control And Data Acquisition system units located at each Interconnection Point.

II.

IT IS FURTHER ORDERED that:

A. Respondent shall provide information on an electronic bulletin board showing for each Interconnection Point: (i) the Designated Capacity; (ii) the Adjusted Designated Capacity, identifying the cause of the adjustment and the planned date the adjustment is expected to end; (iii) the Available Interconnection Capacity; (iv) no later than the second business day of each month (a) the Amounts Nominated and (b) the Amounts Confirmed; and (v) the Recorded Throughput for the previous month.

B. If Respondent declines any shipper's nomination of gas into the Consumers Energy System at any Interconnection Point because Available Interconnection Capacity is less than Adjusted Designated Capacity, Respondent shall afford the shipper two alternatives: (i) if the shipper is able to nominate its shipments to another pipeline interconnection point into the Consumers Energy System at no additional cost to the shipper, Respondent will accept the gas at such other pipeline interconnection point; (ii) if the shipper provides a certification in the form set forth in Exhibit B hereto stating that the shipper is unable to nominate its shipments to another pipeline interconnection point into the Consumers Energy System at no additional cost to the shipper, then Respondent shall provide gas from its own supply of gas and without interruption on the Consumers Energy System for the shipper's account equal to the volume of gas nominated by the shipper that could not be transferred through any of the Interconnection Points by reason of the Available Interconnection Capacity being less than Adjusted Designated Capacity.

C. If the shipper exercises the option set out in Paragraph II.B. (ii), Respondent may require the shipper to return to Respondent the volume of gas Respondent had provided on the shipper's behalf, but no earlier than the end of the calendar month following the month in which Available Interconnection Capacity was less than the Adjusted Designated Capacity. Respondent shall give shipper the option to return the gas at any pipeline interconnection point into the Consumers Energy System. Respondent shall not charge an unauthorized gas usage charge to any shipper who replaces the gas by the end of the calendar month following the month in which the shipper's Amount Confirmed was less than the shipper's Amount Nominated because the Available Interconnection Capacity was less than the Adjusted Designated Capacity.

D. If Respondent declines a shipper's nomination of gas that the shipper is obligated to return to Respondent under Paragraph II.C. because the Available Interconnection Capacity is less than Adjusted Designated Capacity, Respondent shall again afford the shipper options (i) and (ii) in Paragraph II.B., including the provision in Paragraph II.C. regarding suspension of the unauthorized gas usage charge.

E. Respondent shall amend the tariffs it has filed with the MPSC to incorporate its obligations under Paragraph II. of this order. Respondent shall incorporate its obligations under Paragraph II. into any of its contracts with shippers.

F. The purpose of this Paragraph II. of this order is to prevent the substantial lessening of competition from the acquisition, as alleged in the Complaint.

III.

IT IS FURTHER ORDERED that:

Ninety (90) days from the date this order becomes final, annually for the next nine (9) years on the anniversary of the date this order becomes final, and at other times as the Commission may require, Respondent shall file a verified written report with the Commission setting forth in detail the manner and form in which it has complied and is complying with Paragraph II. of this order.

IV.

IT IS FURTHER ORDERED that:

A. Respondent shall notify the Commission at least thirty (30) days before any proposed change in the corporate Respondent such as dissolution, assignment, sale resulting in the emergence of a successor corporation, or the creation or dissolution of subsidiaries or any other change in the corporation that may affect compliance obligations arising out of the order.

B. Upon consummation of the acquisition, Respondent shall cause the merged entity to be bound by the terms of this order.

V.

IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this order, upon written request, Respondent shall permit any duly authorized representative of the Commission:

A. Access, during office hours and in the presence of counsel, to all facilities and access to inspect and copy all books, ledgers, accounts, correspondence, memoranda and other records and documents in the possession or under the control of Respondent relating to any matters contained in this order; and

B. Upon five days' notice to Respondent and without restraint or interference from it, to interview officers, directors, or employees of Respondent.

VI.

IT IS FURTHER ORDERED that this order shall terminate on June 2, 2009.

By the Commission.

Donald S. Clark
Secretary

SEAL

Issued: June 2, 1999

Attachments:
Exhibit A
Exhibit B