Topping the first Federal Energy Regulatory Commission meeting in the new year on Jan. 19 is the Commission’s proposed anti-market manipulation rule (RM06-03) initiated last fall using the broader authority provided by the Energy Policy Act of 2005. Also on the published agenda are potential rehearing orders on two northeastern LNG projects, and a look at the Commission’s negotiated rate policy (PL02-6).

The Commission issued the proposed anti-market manipulation rule, along with a policy statement last fall (see Daily GPI, Oct. 21, 2005). It includes broad prohibitions on energy market manipulation by any entity and outlines its policy on assessing civil penalties. The comment and reply comment period was completed last month. Some comments have been critical of the fact the Commission’s proposal for the natural gas and electricity markets mimics nearly word-for-word the Securities and Exchange Commission’s (SEC) Rule 10b-5 that prohibits manipulation and fraud in the securities industry. The commenters claim it applies to a totally different market and the rules do not translate.

On the LNG front the Commission last July approved Weaver’s Cove LNG project in Fall River, MA and turned down KeySpan Energy’s proposal to expand a peak-shaving LNG facility into an import terminal near Providence, RI (see Daily GPI, July 1, 2005). Both decisions have been contested.

After the Weaver’s Cove project was approved, the U. S. Navy belatedly discovered the LNG ships going to the proposed terminal would be traversing its torpedo testing grounds and feared there could be some problems (see Daily GPI, Aug. 18, 2005).

KeySpan LNG claims FERC’s assessment and rejection of its project as “new” construction subject to new, stricter safety requirements was in error (see Daily GPI, Aug. 5, 2005).

On negotiated rates, observers speculate the Commission will reconsider a proposal that has been batted back and forth over the last three years to allow pipelines to index transportation rates between points to the basis differential or difference between the published spot price indexes for those points.

In its last iteration, now Chairman Joe Kelliher and Commissioner Nora Brownell voted for a proposal to allow transportation pricing that tracks the basis differential, but then-Chairman Pat Wood and Commissioner Suedeen Kelly disagreed, for a tie vote that left the measure in the dust. Since the current Commission is made up of Kelliher, Brownell and Kelly, it is possible the measure might carry.

The restrictions on basis differential pricing for transportation were part of the fallout from the 2000-2001 California crisis and the basis blowout or huge price difference between California points and the rest of the country.

©Copyright 2006Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.