Instead of trying to sift through all the issues relating to theshort-term and long-term transportation markets, Commissioner LindaBreathitt proposed that FERC first issue a limited rulemakingaddressing the less-controversial issues and save the more complexissues for later. “From what I’ve read in the comments [filed atFERC], the approach I am proposing appears to be one that many inthe market could support,” she said in a speech to the American GasAssociation Legal Forum in La Jolla, CA, last week.

“Overall, I believe that one reasonable approach would be toissue a final rule which promotes term-differentiated and seasonalrates. The rule could signal an increased willingness on theCommission’s part to allow new services which provide flexibilityneeded to respond to the changing pace and the changing faces inthe natural gas marketplace. The rule could also implement changesto enhance transparency and address the penalty issue. While thismay appear to some as merely a small step, I would disagree,”Breathitt noted.

She doesn’t believe the contentious proposals for dailyauctioning and negotiation of terms and conditions of pipelineservice should be included in the limited rulemaking. While “Icontinue to believe that they [daily auctions] are a fundamentallysound concept for the mitigation of market power,” Breathitt saidshe thinks the industry needs “more experience with longer termcapacity auctions before a daily auction would be viable.”

With respect to negotiated terms and conditions, she noted thatwhile she believes FERC should “encourage and promote” pipes toprovide flexible services, “I would prefer that the flexibility beimplemented through generally available rate schedules that permitother shippers who are similarly situated to avail themselves ofdeveloping services.”

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.