FERC last week rejected Natural Gas Pipeline Company ofAmerica’s (NGPL) proposal to implement negotiated rates on itssystem, saying that such a move would be “premature” until it couldact on the pipeline’s proposed auction procedures that are pendingas part of a comprehensive settlement.

The complexity of merging the two proposals demands that theCommission put the proposed capacity-allocation procedures[RP97-431] in place ahead of proposed negotiated rates on Natural’ssystem, the Commission said. Only then will it be in a position tojudge the appropriateness of the negotiated-rate proposal[RP98-362], and order the elimination of any discrepancies betweenthe two. The Commission said Natural could re-file itsnegotiated-rate plan after it issues an order on the settlementpackage that calls for the new auction procedures.

“We want to get their primary way of allocating capacity, whichis their auction process, squared away first. And once they getthat in, then they can integrate negotiated rates into thatprocess,” said a FERC staff member. “[I]t did not appear thatNatural itself had integrated their negotiated-rate process intotheir auction process, and they need to do that,” he told NGI.

Susan Parker

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