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Analysis of Multi-Year, Fixed Price Gas Sales Contract

Accumyn’s expert analyzed the existing evidence concerning the alleged agreement between a non-profit hospital system and a retail affiliate of a natural gas utility company, comparing the execution of the alleged agreement to standard industry practices.   In its haste to lock-in a two-year fixed price natural gas contract with the hospital system, the retail affiliate neglected to send out a written confirmation of the alleged sale in a timely manner and in accordance with industry standards. A written contract was sent to the hospital system two months after the alleged agreement took place and the retail affiliate began billing the hospital system at the inflated two-year fixed price.   Had the affiliate sent the confirmation within the prescribed window, it would have allowed the hospital system to dispute the confirmation or begin action to mitigate possible damages to either party. Moreover, the natural gas buyer did not actively accept or agree to the proposal offered by the affiliate. In addition to opining on commercial standards regarding natural gas transactions, Accumyn’s expert also critiqued the opposing expert’ damage calculations and provided alternative estimation of damages based on natural gas forward price curves.