OCC Nearing Decision on Gathering Rulemaking
As expected, there still is nearly complete disagreement among
Oklahoma gatherers and producers over the fairness of current rates
and service treatment. Responses to a recent Oklahoma Corporation
Commission (OCC) questionnaire reveal that nearly half of producer
respondents felt similarly situated producers on the same gathering
system received higher or lower prices than they received. Also,
79% said this was unduly discriminatory.
"A large number of producers reported perceived unfair or
unethical treatment by gas gatherers. Seventy-two percent of
respondents reported this problem," according to a report to
commissioners on questionnaire responses. "It should be noted that
in each category, such as threats of increased gathering rates in
order to purchase gas, high rate and low price in non-competitive
situations, inducing long-term commitments by threats of
curtailment, etc. that the respondents reporting no problems in
that area approximately equaled those reporting unfair treatment."
Gatherers who responded to the commission questionnaire declined
to disclose whether similarly situated producers received higher or
lower prices for gas/rates for gathering. However, gatherers
"universally felt such practices were not unduly discriminatory."
Gatherers also were in near complete agreement opposing public
disclosure of rates, terms and conditions. "The gatherers cited
competitive reasons as the rationale for their position. About
two-thirds of the gatherers offer the same terms to all parties at
the wellhead. One-third do not."
The OCC is in the midst of considering whether to begin a
rulemaking on gathering regulation and an informal gathering
complaint mediation procedure that does not require parties to hire
legal representation. Here, according to questionnaire responses,
gatherers and producers seem to be united in their distaste for
hiring lawyers. Combined, 140 respondents favor an informal
mediation procedure, and only 14 oppose such a measure.
Following a veto of gathering legislation in the last session of
the Oklahoma legislature, the governor issued an executive order to
the OCC to review gathering rules and regulations to determine
whether revision or update was necessary. The OCC held its first
hearing session Oct. 19 in a notice of inquiry for a possible
rulemaking on gathering. That hearing is to resume Wednesday.
Previously, technical conferences were held at the OCC Aug. 14 and
Sept. 14. A decision on whether the commission will proceed with a
rulemaking should come shortly after this week's resumption of the
hearing, according to Larry Lago, an aide to OCC Commissioner Bob
Joe Fisher, Houston
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