Energy West ordered to pay Shelby Gas Association nearly $523K in contract dispute

Energy West to pay $523K in contract dispute

CHOTEAU, Mont. — A Teton County jury has determined that Energy West owes the Shelby Gas Association nearly $523,000 in a 2008 contract dispute.

Shelby Gas Association sued Energy West, accusing the Great Falls company of not meeting the terms of a natural gas supply contract.

The contract committed Shelby Gas to buying 550,000 BTUs of natural gas per day from Energy West. Shelby Gas stored the excess natural gas during the summer and used it to supplement its higher needs in the winter.

In January 2008, Energy West notified Shelby Gas that it would stop supplying the 550,000 BTUs of natural gas each day and would instead provide Shelby Gas with its daily requirement from the natural gas it had put in storage. After that inventory was depleted, Energy West began selling Shelby Gas the actual amount of gas it needed each day.

As a result, Shelby Gas did not have enough natural gas in storage for winter of 2008-09.

“We had to go onto the open market and buy gas,” said Dick Beatty, board member and president of Shelby Gas Association.

District Judge James A. Haynes ruled in favor of the Shelby Gas Association last September and ordered a jury trial to determine the damages.

“The jury’s award — $522,923.12 — covers our out-of-pocket costs” of buying gas on the open market, Beatty said.

“This case was a contract dispute stemming from a 15-year gas supply contract between Energy West Resources and Shelby Gas Association that expired in 2008,” said Kevin J. Degenstein, president and chief operating officer of Energy West. “The jury made an impartial decision based on the information provided in trial.”

Information from: Great Falls Tribune, www.greatfallstribune.com