Rep. Joe Barton (R-TX) promised a fellow lawmaker on Wednesday that he would work to tackle the issue of creating transparency in natural gas price reporting beyond simply calling for a study in pending energy legislation when the bill reaches the Energy and Commerce Committee in the House of Representatives.

Reporting of natural gas prices to energy trade publications has drawn scrutiny from Congress, federal regulators and government agencies in the wake of indictments of energy traders accused of attempting to manipulate natural gas markets. Barton chairs the Energy and Air Quality Subcommittee.

At Wednesday’s mark up session, Rep. Ed Markey (D-MA) introduced an amendment that would give FERC the authority “to determine which prices would in fact be most helpful in creating a transparent marketplace.”

Markey said that the goal of his amendment “is to remove the disparity which exists between insiders and outsiders in this natural gas marketplace, so that the other customers — whether it be munis, or co-ops or just individual wholesale customers — can have the same information that power marketers and dealers have.”

Rep. Billy Tauzin (R-LA) noted that there are several different organizations currently “making proposals on the way to address that issue,” Tauzin added. “The Committee of Chief Risk Officers, Platts, the Natural Gas Supply Association, the Coalition for Energy Market Integrity and Transparency and the Federal Energy Regulatory Commission all have plans…all aimed at the same goal of creating as much market transparency as possible.”

He noted that FERC has scheduled a technical conference at the end of next month related to this issue (see Daily GPI, March 17). “So we’re going to get a lot of good information by April regarding how technically to achieve market transparency in this issue,” Tauzin said.

“We agree that the issue that this amendment attempts to address is an issue that needs to be addressed,” Barton told Markey. “We’ve attempted to do that in the pending bill by requiring a study of this very issue,” he noted.

“Your amendment, as I understand it, goes further than a study and it just says that the Commission shall establish rules,” Barton said. “So you feel comfortable telling them they should go ahead and do something as opposed to ‘let’s study it and find out what needs to be done.'”

Markey said that FERC has already produced two reports on this issue, one of which was released in August 2002 and the other one this year. “And each one of them reached the same conclusion with regard to the shaken confidence in the gas marketplace and the continued potential for manipulation,” Markey said.

“Since we’ve already had two studies from the FERC identifying the identical problems in the gas marketplace as exist in the electricity marketplace, we don’t need anymore studies from the FERC. They’re already in. I just think we should act. There really is a problem out there that has already been clearly identified.”

Barton queried Markey as to what specific price the Massachusetts lawmaker is seeking to get transparency on. “Is that a wholesale wellhead price, is that a transmission price, is that a citygate price or is it all of the above?”

In response, Markey said that he “chose not to micromanage the system” in his proposed amendment “in the same way that when we did the futures marketplace — coordinated it with the equities or the NASDAQ — we just gave it over to the agency of expertise, but told them ‘You have to do something to increase the transparency.”

Barton asked Markey whether he would be willing to withdraw his amendment “with the understanding that we will make a personal, good faith effort to put something in at full committee that is stronger than a study.”

Barton said, “I just don’t know that I’m educated enough to accept this right now. I agree with the intent. I think we need more transparency in natural gas markets. I don’t want to do something that leads to even inadvertently reregulation of wholesale prices at the wellhead. I don’t think it does that, but I do have a concern.”

“There’s no intent at all to regulate any prices,” Markey responded. “All we’re looking for is the information about the prices so that it’s not just insiders but the whole marketplace that can see everything that’s going on at all times.”

Markey agreed to withdraw his amendment. “I will, in fact, be specific in ensuring that there’s language that says it is not intended to regulate any price.”

“If the gentleman would do that, I will promise that we will put something stronger in at full committee than what’s in the bill,” Barton said. Barton said he would work with Markey and Tauzin “on what that is.”

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