Hoecker Gives Counsel to NOPR, NOI Negotiators
In an unusual step last week, FERC Chairman James Hoecker
offered some advice to the industry negotiators who have been
meeting in closed-door sessions to craft an agreement on the major
natural gas initiatives contained in the notice of proposed
rulemaking (NOPR) and notice of inquiry (NOI).
Speaking at a conference of The Energy Council last Monday, he
said that while consensus on the major initiatives would be "very
helpful," industry negotiators shouldn't focus on "agreement for
its own sake but [rather] on learning from each segment of business
how [they] can benefit from further evolution in FERC's policies,
and craft common objectives and fair-market mechanisms that will be
the most useful to the industry as a whole."
Moreover, he warned the gas industry not to "bring us
lowest-common-denominator answers to our proposals in the hopes
that we will take what we can get." Instead, Hoecker called on
negotiators to give the Federal Energy Regulatory Commission "solid
agreement where it exists and frank, solid analysis where it does
not." Also, "bring alternatives if you can," he said.
Furthermore, "tell us how the short-term issues of the NOPR
relate to the long-term objectives of the NOI and how we ought to
view them together. Tell us how we can find practical approaches
that will, to the extent possible in the market, stand the test of
time and delay the need for another mega-proceeding of this kind in
the future." Hoecker offered the suggestions after receiving a
"personal update on the tenor" of the industry talks.
He reminded industry negotiators that the Commission's interest
in NOI issues, such as straight fixed variable rate design, will
continue after April 22, when industry comments are due on the NOPR
and NOI initiatives. "To continue the process, however, the
Commission needs ideas it can act on, procedural proposals that
will be helpful and not merely tactical, and a willingness on the
part of the industry to stay at the table on the issues it
continues to deem important enough for further development."
He noted that generic review of the gas issues was much
preferable to the "awfully slow and uncertain" case-by-case
resolution. "...[I]f the gas industry tells us not to change the
current rules - which were written for a far different marketplace
[than today] - the consequences of that choice are something it
will have to live with."
Although the proposed gas initiatives in the NOPR and NOI have
created considerable controversy within the industry, Hoecker said
"we cannot let controversy deter us from making progress."
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