FERC's Breathitt Proposes Limited NOPR
Instead of trying to sift through all the issues relating to the
short-term and long-term transportation markets, Commissioner Linda
Breathitt proposed that FERC first issue a limited rulemaking
addressing the less-controversial issues and save the more complex
issues for later. "From what I've read in the comments [filed at
FERC], the approach I am proposing appears to be one that many in
the market could support," she said in a speech to the American Gas
Association Legal Forum in La Jolla, CA, last week.
"Overall, I believe that one reasonable approach would be to
issue a final rule which promotes term-differentiated and seasonal
rates. The rule could signal an increased willingness on the
Commission's part to allow new services which provide flexibility
needed to respond to the changing pace and the changing faces in
the natural gas marketplace. The rule could also implement changes
to enhance transparency and address the penalty issue. While this
may appear to some as merely a small step, I would disagree,"
She doesn't believe the contentious proposals for daily
auctioning and negotiation of terms and conditions of pipeline
service should be included in the limited rulemaking. While "I
continue to believe that they [daily auctions] are a fundamentally
sound concept for the mitigation of market power," Breathitt said
she thinks the industry needs "more experience with longer term
capacity auctions before a daily auction would be viable."
With respect to negotiated terms and conditions, she noted that
while she believes FERC should "encourage and promote" pipes to
provide flexible services, "I would prefer that the flexibility be
implemented through generally available rate schedules that permit
other shippers who are similarly situated to avail themselves of
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