FERC last Thursday proposed additional reporting requirements for nonjurisdictional intrastate and Hinshaw pipelines to "increase market transparency, without making it unduly burdensome" for the pipes to participate in interstate markets.
The Federal Energy Regulatory Commission (FERC) seeks to increase the availability and usefulness of the transactional data reported by intrastate and Hinshaw pipelines by requiring that: 1) the existing annual transactional reports be filed on a quarterly basis; 2) the quarterly reports include information on both storage and transportation transactions; 3) the quarterly reports be filed in a uniform electronic format and posted on the Commission's website; and 4) the reports be made public and not filed with information redacted as privileged [RM09-2].
The quarterly reports will be required to include the following information about transactions that is not currently made available: 1) the rate charged under each contract, including a separate statement of each rate component; 2) the duration of the contract; 3) the primary receipt and delivery points covered by the contract; 4) the quantity of natural gas the shipper is entitled to transport, store or deliver; and 5) whether there is an affiliate relationship between the pipeline and the shipper.
"The Commission is not proposing to impose on intrastate and Hinshaw pipelines the same reporting requirements as it imposes on interstate pipeline. For example, the Commission in this rulemaking will not require the intrastate and Hinshaw pipelines to make daily postings of transactional information on their own websites," the notice of proposed rulemaking (NOPR) said [RM09-2].
While not the same, FERC conceded that the proposed reporting requirements for intrastate and Hinshaw lines are "comparable" to the transactional posting requirements for interstate pipelines.
"The Commission believes that the revised reporting requirements proposed in this NOPR appropriately balance the need for increased transparency of intrastate and Hinshaw pipeline transactions, while avoiding unduly burdensome requirements that might discourage such pipelines from participating in the interstate market," it noted.
The NOPR applies to intrastate pipelines providing interstate transportation services under Section 311 of the Natural Gas Policy Act (NGPA), and Hinshaw pipelines. Under the NGPA, FERC can authorize an intrastate pipeline to transport natural gas "on behalf of" interstate pipelines or local distribution companies served by interstate pipelines under terms and conditions set by the Commission. A pipeline is deemed a Hinshaw line if the interstate gas its transports is received and consumed within the boundary of the same state.
In November 2008, FERC began an inquiry into whether the agency should require certain intrastate pipelines to post details of their transactions with individual shippers in a manner comparable to the reporting requirements that interstate gas pipeline must meet (see NGI, Nov. 24, 2008).
The inquiry arose from a request filed by SG Resources Mississippi LLC (SGRM), an interstate storage provider with market-based rates. SGRM sought a waiver of FERC's regulations that require interstate pipes to post the rates charged in firm and interruptible transactions by the first nomination for service. It also sought a similar waiver on behalf of all interstate storage providers with market-based rates.
SGRM argued the mandatory disclosure of commercially sensitive pricing information provides prospective customers and competitors, especially those intrastate pipelines providing service under Section 311 of the NGPA, with an unfair competitive advantage. FERC denied both of SGRM's requests.
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