Natural gas producers sharply criticized an electric industryproposal that seeks to resolve commercial disputes through disputeresolution as a precursor to them being filed at FERC. The aim ofthe proposed plan is to streamline the complaint process at theCommission, electric officials say.

But the proposal would mean “money down the drain” for gasproducers and other pipeline customers, said Charlotte LeGates,spokeswoman for the Natural Gas Supply Association (NGSA). “In theelectric industry, you can get retroactive refunds so it doesn’tmatter how long the dispute resolution takes. It doesn’t matter tothem if the thing takes a century.” But the Natural Gas Act doesn’tprovide retroactive refunds for the gas industry. Consequently, theproposed addition of dispute resolution, which could be aprotracted process in some cases, to FERC’s complaint procedures isa “huge issue for us,” said LeGates.

The gas industry is concerned about the electric proposalbecause FERC Chairman James Hoecker indicated last March that hewould prefer to have a uniform, expedited complaint process inplace for all the energy companies subject to regulation at theCommission. The gas side sees the electric proposal as competitionto its own complaint reform measures. The Pipeline CustomerCoalition, of which NGSA is a member, and interstate pipelines haveproposed separate plans to hasten FERC’s complaint process.

The Electric Industry Dispute Resolution Working Group, whichdeveloped the latest proposal, “met with some gas industryrepresentatives and heard some of their concerns and took some ofthem into account,” said Christina C. Forbes, director of federalcommercial and regulatory policy at Edison Electric Institute(EEI). “However, we didn’t design it one way or the other withregard to the gas industry. They have a different statute…andthey are at a different stage in their commercial evolution.” Forbes and officials from six other electric organizations made upthe working group.

Responding to gas critics, she said, “I don’t think we’relooking at [dispute resolution] as adding another layer” to FERC’scomplaint process. “We looking at it as a way of winnowing outcases, and winnowing down cases. If you can solve the dispute priorto a complaint being filed, then that’s good. If you can narrowdown the number of issues that you’re fighting over, then that’sgood. It’s not necessarily an additional layer. It may mean thatyou may have saved a whole lot of layers…”

The working group proposes that the Commission set up a 15-monthpilot during which a complainant would submit a commercial disputeto mediation prior to filing a complaint. The dispute could bemediated by either a FERC mediator or an outside mediator. Thetypes of issues subject to mediation would be commercial disputesonly, such as a marketer being denied access to transmissionservices. Disputes involving filed rates, terms and conditions ofservice would be excluded. Parties would have a maximum of 30 daysto resolve their disputes. If still not settled, a party can thenfile its complaint at FERC. The Division of Dispute Resolution,which would be created at FERC, would decide the best way toresolve the issues raised by the complaint: assign the case to theOffice Director who would prepare a Letter Order; assign toalternative dispute resolution (ADR) procedures; assign to anadministrative law judge; or refer to the Commission.

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