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Kinder Morgan to Pay $25 Million to Settle U.S. Civil Claims
2007-11-28 18:23 (New York)

By Robert Schmidt
Nov. 28 (Bloomberg) — Kinder Morgan Energy Partners LP, the
second-biggest publicly traded pipeline partnership, agreed to
pay $25 million to settle U.S. allegations it improperly sold
coal meant for the government and other clients.
The government alleged that Kinder Morgan, which contracted
with the Tennessee Valley Authority to store coal at terminals in
Illinois and Kentucky, used two different weighing methods that
allowed it to ship out less coal than it received. The
difference, which could be between 2 percent and 3 percent, was
then sold by Kinder Morgan as its own “Red Lightning” brand
coal between 1997 and 2001, the Justice Department said.
The agreement was announced today by the U.S. attorney’s
office in Fairview Heights, Illinois. The company will pay $19.8
million to the U.S. and $5.2 million to its private customers,
the Justice Department said.
Kinder Morgan, based in Houston, said in a statement that it
believed the coal sales were proper under its contracts. The
company said it “agreed to the settlement in order to avoid the
costs of litigation and to maintain a positive relationship with
significant customers.”

–Editors: Laurie Asseo, Robin Meszoly.

To contact the reporter on this story:
Robert Schmidt in Washington at +1-202-624-1853 or
rschmidt5@bloomberg.net.

To contact the editor responsible for this story:
Michael Forsythe at +1-202-624-1940 or
mforsythe@bloomberg.net

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KINDER MORGAN ENERGY PARTNERS ANNOUNCES COAL SETTLEMENT
2007-11-28 17:41 (New York)
(The following is a reformatted version of a press release issued by
Kinder Morgan Energy Partners, received via electronic mail.)

KINDER MORGAN ENERGY PARTNERS ANNOUNCES COAL SETTLEMENT
HOUSTON, Nov. 28, 2007 - Kinder Morgan Energy Partners, L.P. (NYSE: KMP)
today announced it has reached a civil settlement with the U.S. Attorney’s
office for the Southern District of Illinois involving certain coal sales
that occurred at its Cora, Ill., and Grand Rivers, Ky., terminals between
1997 and 2001. Through 1999, KMP collected and, through 2001,
subsequently sold excess coal (gain in coal resulting from moisture
absorption or scale inaccuracies) as it believed it was entitled to do
under then-existing contracts. Likewise, under the terms of those
contracts, KMP bore the risk of coal losses resulting from moisture loss
and scale inaccuracies. During the period of time in question, each
customer at the terminals received at least as much coal back from each
terminal as it delivered to the terminal for storage and handling.

To settle the matter, KMP will pay approximately $25 million to the
Tennessee Valley Authority and other customers of the two terminals from
1997 through 1999. The company initially announced this matter was under
investigation in June 2005. KMP further disclosed in its recently filed
quarterly report on Form 10-Q that it had reached an agreement in
principle to settle this matter and that it had recorded an expense in the
third quarter of approximately $25 million to reflect the liability
associated with the settlement. KMP’s internal investigation of the
matter did not reveal inappropriate actions and, accordingly, KMP made no
admission or acknowledgement of improper conduct as part of the
settlement. Nonetheless, KMP agreed to the settlement in order to avoid
the costs of litigation and to maintain a positive relationship with
significant customers.

Kinder Morgan Energy Partners, L.P. (NYSE: KMP) is a leading pipeline
transportation and energy storage company in North America. KMP owns an
interest in or operates more than 24,000 miles of pipelines and 150
terminals. Its pipelines transport natural gas, gasoline, crude oil, CO2
and other products, and its terminals store petroleum products and
chemicals and handle bulk materials like coal and petroleum coke. KMP is
also the leading provider of CO2 for enhanced oil recovery projects in
North America. One of the largest publicly traded pipeline limited
partnerships in America, KMP has an enterprise value of approximately $20
billion. The general partner of KMP is owned by Knight Inc. (formerly
Kinder Morgan, Inc.), a private company.

This news release includes forward-looking statements. Although Kinder
Morgan believes that its expectations are based on reasonable assumptions,
it can give no assurance that such assumptions will materialize.
Important factors that could cause actual results to differ materially
from those in the forward-looking statements herein are enumerated in
Kinder Morgan’s Forms 10-K and 10-Q as filed with the Securities and
Exchange Commission.

Larry Pierce Mindy Mills
Media Relations Investor Relations
(713) 369-9407 (713) 369-9490
http://www.kindermorgan.com
(jkt)NY

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