A federal appeals panel has reversed a lower court
decision and ruled in favor of Williams Natural Gas Co. of Tulsa in
the legal dispute over natural gas transportation to Smith
Cogeneration Inc. in Oklahoma City.
However, the legal battle with Oklahoma Natural Gas Co. is not
Appeals related to the issue are still pending at the U.S. Court
of Appeals in the District of Columbia and Oklahoma Supreme Court.
On Monday, Williams said it filed a notice with the state Supreme
Court of the 10th Circuit U.S. Court of Appeals decision.
ONG, a division of ONEOK Inc. in Tulsa, said it plans to appeal
the 10th Circuit decision to the U.S. Supreme Court.
In the interim of resolution of the legal dispute, Smith
Cogeneration is operating with service from ONG rather than Williams,
with which it first contracted for service.
At issue in the case is pipeline transportation of natural gas.
Smith Cogeneration is purchasing Oklahoma-produced natural gas from
Ladd Petroleum Corp. of Denver.
The 10th Circuit U.S. Court of Appeals in Denver filed its
decision Wednesday and local attorneys in the case received notice
of it Friday, although most offices were closed for the Thanksgiving
In its decision, the appeals panel reversed a U.S. District
Court order in Oklahoma City that did not fully enforce a federal
certificate issued to Williams to build and operate the pipeline.
The 10th Circuit decision also reversed a portion of the local
federal court ruling that refused to bar interference of enforcement
of the federal certificate by a related state court action initiated
The 10th Circuit remanded the case back to the local federal
court for proceedings consistent with its decision.
Williams, a subsidiary of The Williams Companies Inc. of Tulsa,
argued that as an interstate pipeline company it is exclusively
regulated by the Federal Energy Regulatory Commission.
The FERC agreed with Williams, denying arguments from ONG that
the pipeline is an intrastate pipeline and should be subject to
state franchise laws.
"We're on air," said Williams' attorney Bill Burkett in Oklahoma
City. "We're not surprised, though."
ONG said it was concerned the ruling would damage its position
as related to the franchise laws of Oklahoma. The utility does not
have franchises in all areas it serves, about two-thirds of the
state, nor are its franchises exclusive franchises.
"We look at this decision as one that could cripple the whole
franchise laws of Oklahoma," said ONG spokesman Don Sherry. …