COLUMBIA TRANSMISSION FILES TO REJECT AN ADDITIONAL 532 GAS PURCHASE CONTRACTS
COLUMBIA TRANSMISSION FILES TO REJECT
AN ADDITIONAL 532 GAS PURCHASE CONTRACTS
CHARLESTON, W.V., Nov. 1 /PRNewswire/ -- Columbia Gas Transmission Corp., a unit of The Columbia Gas System, Inc. (NYSE: CG), has asked the U.S. Bankruptcy Court for the District of Delaware to reject an additional 532 non-competitive natural gas purchase contracts.
Columbia Transmission Vice President Leslie Strand said the contracts involved were not included in the 4,141 above-market-priced contracts the bankruptcy court allowed Columbia Transmission to reject in August because they did not require Columbia to purchase gas during the summer months. "Beginning in November, however, these contracts will require gas to be purchased at above current market prices," he added.
Strand said all of the contracts being rejected are related to a negotiated settlement reached earlier this year resolving a class action suit a group of producers, led by Enterprise Energy Corp., brought against Columbia in 1985. Under terms of the settlement, Columbia Transmission agreed to pay $30 million to resolve pre-January 1991 claims by producers that they were underpaid $118 million for their gas. Half of this payment was made into an escrow account prior to Columbia Transmission's filing July 31 seeking protection under Chapter 11 of the bankruptcy code. The remaining $15 million is due in March 1992.
Columbia Transmission is asking the bankruptcy court for authorization to comply with the settlement's terms. The filing points out that the settlement payment represents a percentage of the claims that is substantially less than what other unsecured creditors can expect to receive under any future plan of organization.
The company said it was rejecting the contracts because it has determined that, based on current market conditions, the gas is higher- priced than gas available from other sources.
Strand said that as a result of its previous rejection of above- market-priced contracts, Columbia Transmission has filed with the Federal Energy Regulatory Commission to reduce its commodity sales rate by 85 cents a dekatherm, from $3.70 to $2.85. He added that the company will continue to review other contracts for possible rejection.
/CONTACT: Alma Adkins of Columbia Gas Transmission, 304-357-3395, or 304-357-2000/
(CG) CO: Columbia Gas Transmission Corp.; The Columbia Gas System, Inc. ST: West Virginia IN: UTI SU: MK -- PH038 -- 0344 11/01/91 15:49 EST