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Natural's Negotiated-Rate Plan Called 'Premature'

Natural's Negotiated-Rate Plan Called 'Premature'

FERC last week rejected Natural Gas Pipeline Company of America's (NGPL) proposal to implement negotiated rates on its system, saying that such a move would be "premature" until it could act on the pipeline's proposed auction procedures that are pending as part of a comprehensive settlement.

The complexity of merging the two proposals demands that the Commission put the proposed capacity-allocation procedures [RP97-431] in place ahead of proposed negotiated rates on Natural's system, the Commission said. Only then will it be in a position to judge the appropriateness of the negotiated-rate proposal [RP98-362], and order the elimination of any discrepancies between the two. The Commission said Natural could re-file its negotiated-rate plan after it issues an order on the settlement package that calls for the new auction procedures.

"We want to get their primary way of allocating capacity, which is their auction process, squared away first. And once they get that in, then they can integrate negotiated rates into that process," said a FERC staff member. "[I]t did not appear that Natural itself had integrated their negotiated-rate process into their auction process, and they need to do that," he told NGI.

Susan Parker

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