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Response Deadlines for Complaints Under Fire

Response Deadlines for Complaints Under Fire

The shorter response times imposed by FERC in its final rule to expedite resolution of industry disputes will place an inordinate burden on interstate pipelines and other regulated companies that are likely to be targets of customer complaints, pipelines and power utilities contend. Even natural gas producers - the biggest proponents of a faster complaint process - expressed some concern about the compressed deadlines.

Major producers, however, generally agreed with the "fundamental feature[s]" of the final rule, while interstate pipelines challenged it on substantive grounds. The Interstate Natural Gas Association of America (INGAA) and individual pipelines argued that FERC overstepped its authority under the Section 5 complaint regulations when it said it would act on complainants' requests for preliminary relief pending a final decision.

The Commission has "blurred the distinctions" between two different statutory provisions of the Natural Gas Act (NGA), INGAA said. Section 4 gives it permission to take interim actions, but "Section 5...contains no such similar grant of authority to issue preliminary relief prior to completion of a hearing or corresponding refund protection."

Separately, pipelines and electric utilities were especially troubled by the 20-day deadline that the Commission allotted for parties to respond to standard complaints, and the even shorter response deadline for complaints that are eligible for "fast-track" processing. "A 20 calendar day response period...does not permit sufficient time in which to research the facts and issues raised by a complex complaint and prepare a written response," noted Chevron Pipe Line, an owner and operator of both natural gas and oil pipelines. It urged FERC to lengthen the deadline for responses to 30 calendar days from when a complaint is filed at the Commission.

The 20-day response deadline was illustrative of the "disparate treatment" by FERC of complainants and respondents, said the Southern Companies, a group of five public utilities. The complainants, on one hand, are being given "unlimited time [to prepare] a detailed complaint," while respondents have only 20 days to "investigate the facts, perform any needed research and prepare an answer." To even the score, the utilities insist complainants should be required to file their grievances within 20 days after the occurrence of the alleged infraction. Parties that fail to meet this deadline shouldn't be eligible for fast-track processing of their complaint, they propose.

Chevron further took issue with FERC's requirement that parties include "all" documents, as well as testimony, in their responses. "Aside from the question of whether large amounts of data should be provided with an answer, a respondent may simply not be able to identify, locate and produce all relevant documents in the time provided for filing its answer." The requirement also raises "serious due process issues," the pipeline said.

Indicated Shippers, which include mostly major producers, called on the Commission to set specific deadlines for interventions and responses to fast-track complaints. FERC didn't do this in the final rule but simply said the response deadlines would be shorter than the 20 calendar days allotted for standard complaints. The producers cautioned FERC against making "any significant reduction" to the 20-day timeframe for fast-track cases, saying this would make things "very tight." Specifically, they said the response deadline shouldn't be shorter than 10 days.

In addition, producers asked the Commission to promptly issue notices as to whether complaint cases will receive fast-track processing. "Ideally, such notice should be provided by the close of business on the first business day following the filing of the complaint. In that way, the respondent and intervenors will have certainty quickly as to 1) whether the Commission will shorten the answer and intervention deadline; and 2) what the new deadline will be.

They also called on FERC to eliminate the compressed window of opportunity - within five days after a complaint is filed - in which interested parties have to seek confidential materials from the complainant, and to amend the final rule requiring a complainant to disclose confidential materials to a non-party in the case.

To eliminate late responses and interventions, which "may bog complaint proceedings down," the producers proposed that the Commission - at a minimum - created a centralized listing of all pending complaint cases to be posted on its web site. In the alternative, FERC should direct regulated parties involved in complaint proceedings to post notices of the complaints on their electronic bulletin boards (EBB) or web sites, they said.

Ideally, the producers would prefer that regulated companies be required to post full-text copies of their complaints on FERC's web site, but the Commission deferred action on this in the final rule until it completes an internal review of its information technology capabilities under its FERCFirst initiative.

If all else fails, pipelines and other regulated entities could post similar information on their EBBs or web sites, producers added. "Posting of pending complaints involving a particular pipeline, or, at least, a listing of such complaints, on that pipeline's interactive web page can be implemented by the pipeline as part of the required web site implementation, at a minimal cost to the pipeline, and [at] no cost to the Commission."

On a separate issue, The Williams Cos. urged FERC to eliminate the provision that establishes a simplified procedure for expeditiously resolving complaints that involve less than $100,000. It said this was "discriminatory, special treatment for 'small' controversies..."

Williams argues that the value placed on a claim by a complainant might not accurately reflect the ultimate impact of the entire complaint proceeding. "For example, a controversy that is worth $50,000 to the complainant may be worth millions of dollars to the respondent after a precedent is set and others avail themselves of that precedent. Further, issues that involve matters of policy, even if the amount in controversy is small, must be given full and adequate consideration."

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ISSN © 2577-9877 | ISSN © 1532-1231
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