Responding to the Energy Information Administration (EIA) request for comments on proposed changes to its procedures for making revisions to its weekly announcements of storage survey results (see Daily GPI, Jan. 10), the Federal Energy Regulatory Commission staff recommended that revisions of seven Bcf or more be announced as soon as possible during normal business hours.

The comments submitted by William F. Hederman, director of FERC’s Office of Market Oversight and Investigations (OMOI), said staff believed EIA’s proposal to post a notification of an upcoming revision on its website and send the same notification out to its e-mail list serve would be adequate to warn the market of a change. One of EIA’s proposed alternatives would have the agency making a change at any time after sending out a notification two hours in advance.

Currently EIA makes any changes to previous weeks’ results only on Thursday at the same time a new survey is announced. It had proposed changing this policy to either make changes of 15 Bcf or more immediately, with notification, or on the first federal workday in the week following an erroneous report. The FERC staff urged EIA to “be proactive in notifying markets when material data reporting errors cause the weekly natural gas storage report (WNGSR) to be inaccurate….Prompt and flexible notice that a material error has occurred, with a correction to follow in due course, could avoid trading based on inaccurate information.”

Noting that seven Bcf is the current threshold for any revisions, FERC suggested that be maintained, saying the 15 Bcf proposed trigger for expedited revisions is too high. “In some months, WNGSR postings that vary from market expectations by even half this amount can cause significant price movement for the NYMEX natural gas futures contract.”

An OMOI investigation into an erroneous storage report on Nov. 24, 2004 which led to a market spiral, concluded that the error increased costs to consumers through the month of December by between $200 million and $1 billion (see Daily GPI, Dec. 20, 2004). The Commission’s preliminary findings were that the erroneous report occurred because a clerk employed by one of the survey respondents sent in the wrong spreadsheet. That respondent, Dominion Energy, has since changed its procedures to give each of its weekly spreadsheets a different name to reduce the possibility of another mix-up.

The main suggestion coming from two veteran natural gas associations responding to EIA’s call for comments on its revision policy was for the agency to improve its procedures for collecting and vetting the data it receives from companies, so that after-the-fact revisions will be unnecessary (see Daily GPI, Feb. 8). The Natural Gas Supply Association proposed a 10 Bcf trigger for expedited revisions.

An EIA spokesman told NGI that the 15 Bcf had simply been a suggestion. He said he did not expect EIA would have a new policy determined until the spring, possibly in May.

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