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Show Natural gas settlement made by MFSC Mountain Fuel Supply Company announced the settlement of a six-year legal fight it has waged to hold down the price it pays for some natural gas supplies. If approved, the settlement will result in a reduction in natural gas rates for MFS customers in Utah and Wyoming. The agreement was reached by MFS and two gas producers, Shell Oil Company of Houston, Texas, and Gary Energy Corp., of Denver, Colorado, following a series of legal actions in state and federal courts. Subject to approval by the Utah Public Service Commission, the settlement will enable MFS to reduce charges for natural gas to customers by possibly as much as $12 million, although the exact figure is yet to be determined. "The settlement culminates a lengthy battle by Mountain Fuel to obtain natural gas from our suppliers at just and reasonable prices," said B.Z. Kastler, MFS chairman of the board. "While the company will derive no direct financial benefit from the settlement.we are pleased our efforts will mean a reduction in rates for our customers and put an end to years of litigation." Legal action was initiated in 1976 and centered around disputed interpretations of provisions in contracts Mountain Fuel had negotiated with Shell and Gary for the purchase of gas from their plants in the Altamont-Bluebell field of Utah's Uintah . Basin. The dispute became more complicated with the dramatic changes in federal regulation governing the price of natural gas. Shell and Gary filed a series of counterclaims alleging that Mountain Fuel was obligated to pay higher prices for the gas because of changes in federal regulations. The two companies also demanded that Mountain Fuel Supply pay certain state and local taxes incurred by the producers. Mountain Fuel denied the claims, arguing that federal regulatory changes did not alter the original contracts and that the producers were responsible for the taxes. During the period of the dispute, Mountain Fuel, with approval of the Public Service Commission, has included the disputed prices and taxes claimed by Shell and Gary in it's rates and has been accruing the difference pending a settlement or court ruling. The dispute was scheduled for trail early next month in the Salt Lake County district court, but representatives of Mountain Fuel, Gary and Shell agreed to the settlement. Both producers will receive payments from funds accrued by Mountain Fuel, while the largest portion of the funds wiil be used to reduce rates to MFS' Utah and Wyoming customers. "We are pleased that Shell and Gary agreed that an out-of-court settlement was preferable to still more costly litigation," said R.D. Cash, president of Mountain Fuel. "It's a fair settlement which reflects our continuing determination to negotiate the best possible prices to keep our gas the most competitive residential fuel in this region. |