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NGSA Seeks 'Sole-Feed' Exclusion to FERC Posting Requirements

A major producer group last Thursday asked FERC to make a "small" alteration to its final rule on flow posting requirements, saying that the requested change would reduce the burden and cost of compliance without "materially changing the information that is made available to the market."

The Natural Gas Supply Association (NGSA) urged the Federal Energy Regulatory Commission (FERC) to consider adopting a "sole-feed" exclusion, which would exempt major noninterstate natural gas pipelines from reporting operational information if the pipeline has no or very small volume end-users with total receipts of less than 15,000 MMBtu/d and feeds into another major pipeline.

"To the extent a 'major noninterstate pipeline' is upstream of another 'major noninterstate pipeline,' and delivers solely into a single noninterstate pipeline, it can be exempted because its volume will be reported by the downstream pipeline. Without the added cost, the market will have the same information it would have had without the exemption," NGSA said.

"We believe FERC got the new reporting process about 98% right last year when it made changes to the pipeline reporting requirements. Our 'sole-feed' proposal would further simplify the process and capture the same data, just a few miles further downstream," said Jenny Fordham, director of energy markets and government affairs for NGSA.

"A sole-feed exclusion is consistent with the Commission's desire to establish rules that will improve transparency without unnecessary cost," she said.

Last November FERC issued the final rule that required all interstate gas pipelines and certain noninterstate pipes to post operational information on their websites in an attempt to further boost the price transparency of gas markets (see NGI, Nov. 24, 2008).

The final rule established new positing requirements under Section 23 of the Natural Gas Act (NGA) that called for all interstate and certain major noninterstate pipelines to post on their publicly accessible websites daily operational information, such as scheduled volume information and design capacity for certain receipt and delivery points.

Major noninterstate pipelines were defined as a pipes that are not classified as a natural gas companies under the NGA and deliver on average more than 50 Bcf/year during a three-year period. Noninterstate pipes with deliveries at this level contribute to price formation, FERC said. These pipes are now subject to the transparency regulations under NGA Section 23, which allows FERC to assert jurisdiction over any market participant for the purposes of enhancing market transparency.

The rule requires major noninterstate pipelines to post scheduled flow information at each receipt and delivery point with a design capacity greater than 15,000 MMBtu/d.

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