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Energy Transfer Partners Refusing to Pay Penalty

Rover Pipeline builder reneges on agreement, wants to short penalty due by $5.2 million

May 23, 2017

When ETP bought and bulldozed the historic Stoneman House built in 1843 near Leesville, Ohio without notifying Federal Energy Regulatory Commission (FERC) last year as required thus eliminating any public discussion on the historic site's demolition, the company agreed to pay the Ohio State Historic Preservation Office $1.5 million annually for five years as a penalty, payable on March 1 of each year. The money is to be used for preservation education.

However, Energy Transfer Partners to date has not paid the first installment of $1.5 million to the Ohio State Historic Preservation Office. Instead, ETP is now contesting the memorandum of agreement (MOA) and has asked FERC to step in to settle the dispute between the Rover Pipeline builder and the state's preservation office.

Lox Logan Jr., executive director and CEO of the Ohio State Historic Preservation Office, said in a letter to FERC that despite repeated contact with representatives from Rover LLC regarding the fulfillment of the mitigation commitments described in the MOA, "no efforts have been made to meet those obligations."

ETP's attorney, William Scherman of Gibson, Dunn & Crutcher, maintains the original MOA was misleading. In an effort to resolve what Scherman considers to be errors in the MOA, Scherman requested a arbitrator of his choice, Deborah Osborne, review the MOA matter.

ETP has proposed paying instead $2.3 million to a fund administered by the Ohio History Connection Foundation and the State Historic Preservation Office - $1 million for preservation work in the 18 counties crossed by the pipeline and the rest of the money for projects across the state.

The difference between the original agreed upon penalty for dozing the Stoneman House without permission and the newly proposed offer from ETP amounts to $5.23 million.

The FERC's response to Scherman and ETP gives them until June 8 to resolve the matter with the Ohio historic office, after which time FERC will make the decision for them.

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