As part of its ongoing quest to comprehensively reform thenatural gas industry, FERC last week announced that it is planninga series of conferences to tackle issues ranging from its proposedcapacity auction to state unbundling to a pre-filing collaborativeprocess for gas pipeline projects.

Foremost, the full Commission plans to convene a broad-based”policy” conference to discuss short-term issues in the gasindustry, with the focus to be on the July notice of proposedrulemaking (NOPR) and notice of inquiry (NOI).

Chairman James Hoecker said FERC wants to discuss certain,unspecified issues with market participants after “areas ofparticular interest and concerns” are identified in industrywritten comments that are due in late January.The date and scopeof the planned conference, which will be presided over bycommissioners, will be disclosed after the comments have beensummarized at FERC.

“That’s very encouraging,” said a pipeline industryrepresentative, adding that maybe FERC will address policy issuesthat the Commission staff refused to respond to at the workshop onshort-term capacity auctions two weeks ago. Just the fact that theCommission will be presiding is “really good and exciting news,”she said.

FERC-State Relations

Hoecker last week also said the Commission will hold aconference on Feb. 25 to take a closer look at the relationshipbetween federal regulation of interstate gas pipelines and retailunbundling at the state level.

“…[O]ur policies here at the Commission on the gas sideclearly affect state retail-access programs, and increasingly thereverse is the case. So we need to understand the goals of thestates and they need to understand ours to get regulatory andoperational regimes to operate in sync in the gas delivery system,”he said at the bi-weekly meeting. LDCs are particularly concernedthat FERC’s auction proposal may thwart state unbundling efforts.

“I think we share [with] our colleagues at the state level adesire to encourage a vibrant natural gas market that will workwell.” Since FERC currently is engaged in a “comprehensivere-examination” of its gas policies, now is the appropriate time toexamine the relationship between the Commission’s policies andproposals and the state retail policies, according to the notice ofconference issued last Wednesday {PL99-1]

The Commission said it wants to determine the scope and statusof gas retail unbundling, such as the number of states that alreadyhave implemented retail unbundling programs, how they are doing itand what are the chief benefits. In addition, FERC noted it wantsto know what steps the Commission, or the states, can take toencourage the development of state retail unbundling, while at thesame time maintaining the benefits of a restructured interstate gasmarket.

Houston, Chicago

Moreover, FERC plans to hold two technical conferences thismonth – one in Houston and one in Chicago – to discuss its proposalfor a pre-filing collaborative process that would bring partiesaffected by new pipeline projects together to work out major issuesprior to the filing of applications.

The Commission’s proposal would offer prospective pipelineapplicants seeking to “construct, operate or abandon natural gasfacilities” the opportunity to use a collaborative process toresolve major differences early on. In addition, a significantportion of the environmental review process could be completed aswell.

The first conference is scheduled for 9 a.m. on Nov. 10 at theHouston Airport Marriott in Houston, TX. This would be followed bya Nov. 18 conference at the Chicago Marriott Downtown in Chicago,IL. The Commission staff will present information and answerquestions to help industry develop written comments in response tothe NOPR on this subject that was issued in late September.

Susan Parker

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