Electric Groups' Complaint Plan Comes Under Fire
Natural gas producers last week assailed an electric industry
proposal that, if approved by FERC, could require them and others
in the energy market to first try to resolve their commercial
disputes among themselves using mediation before being permitted to
file a formal complaint at the Commission. The aim of the proposed
plan is to cut down on the number of complaints requiring the
Commission's direct attention, with the result being a more
streamlined complaint system at FERC, electric officials say.
"We're glad to see the electric industry is also interested in
expediting complaints at FERC. However, we view a mandate to
mediate as adding new regulatory hurdles and additional cost, which
may keep smaller players, such as independent producers, from ever
using an expedited complaint process," said David Sweet, vice
president of natural gas for the Independent Petroleum Association
of America (IPAA).
Additional costs would be incurred if producers were forced to
hire outside mediators and/or lawyers, he noted. Moreover, since
"rate relief in the gas industry is prospective only, any delays
[in the complaint process, such as might occur with mediation]
would be costly."
Major gas producers agreed. The electrics' complaint-reform
proposal would mean "money down the drain" for producers and other
pipeline customers, said Charlotte LeGates, spokeswoman for the
Natural Gas Supply Association (NGSA). "In the electric industry,
you can get retroactive [rate] refunds so it doesn't matter how
long the dispute resolution takes. It doesn't matter to them if the
thing takes a century."
But the Natural Gas Act doesn't provide retroactive refunds for
the gas industry. Consequently, mandating resolution of complaints
via dispute resolution, which producers believe would unnecessarily
delay the process, is a "huge issue for us," noted LeGates.
The gas industry is concerned about the electric proposal
because FERC Chairman James Hoecker indicated last March that he
wanted a uniform, expedited complaint process in place for all the
energy companies subject to Commission regulation. The gas side
sees the electric proposal as a threat to its own complaint-reform
The Pipeline Customer Coalition (PCC), of which NGSA and IPAA
are members, and the interstate pipelines have come up with
separate plans to hasten FERC's complaint process. Specifically,
the PCC has proposed that the Commission act on various types of
complaints by specific deadlines in an effort to speed up the
process. The pipelines also favor an expedited system for resolving
complaints, but they are against imposing deadlines on the
The Electric Industry Dispute Resolution Working Group, which
developed the latest proposal, "met with some gas industry
representatives and heard some of their concerns and took some of
them into account" during its negotiations, said Christina C.
Forbes, director of federal commercial and regulatory policy at
Edison Electric Institute (EEI). "However, we didn't design it one
way or the other with regard to the gas industry. They have a
different statute...and they are at a different stage in their
commercial evolution." The proposal was primarily fashioned with
the electric industry in mind, noted electric representatives on
the working group. Forbes and officials from six other electric
organizations sat on the working group.
"The Commission staff was interested [in industry coming up
with] a way that it could go to work itself [to settle disputes]
before filing a complaint at the Commission," Forbes said. She
believes the electric industry working group achieved this with its
"It was pretty clear from the symposium [held by FERC in March]
and discussions with FERC staff that elements of ADR [alternative
dispute resolution] had to be worked into the proposal. We could
not set ADR over on a separate pedestal," said Kurt J. Conger of
the American Public Power Association (APPA).
The proposal was structured in such a way that "anybody at
anytime can call the [Enforcement] Hotline, anybody at anytime can
sit down and try to settle their differences," said EEI's Forbes.
But "if a party wants to file a complaint at FERC...we've provided
for a mediation process for what in essence are disputes that don't
fall into two other categories - if you are asking for expedited
relief on the grounds of irreparable harm, or if you're seeking to
change rates, terms and conditions of a filed rate or tariff. So
what in effect that leaves are the commercial disputes."