The shorter, and some believe unrealistic, response timesimposed by FERC in its final rule to expedite resolution ofindustry disputes will place an inordinate burden on interstatepipelines and other regulated companies that are likely to betargets of customer complaints, pipelines and power utilitiescontend. In fact, some believe the accelerated response deadlinesunfairly weight the process in favor of the complaining parties.Even natural gas producers – who helped spearhead the drive forthe faster complaint process – expressed some concerns, albeit morelimited, about the compressed deadlines.

Aside from the deadline issues, major producers said theygenerally agreed with the “fundamental feature[s]” of the finalrule, while the Interstate Natural Gas Association of America(INGAA) and individual pipelines challenged an aspect of the rulethat provides for preliminary relief to complaining parties pendingthe final outcome of their cases. In separate rehearing requests,INGAA and the pipelines argued that such interim relief was outsidethe scope of FERC’s authority under the Section 5 complaintregulations of the Natural Gas Act (NGA).

The Commission provided for preliminary relief in the finalcomplaint rule based on a standard developed in a 1958 court case,which permits interim action if a requesting party can demonstratethat, among other things, it “likely” will prevail on the merits ofits case. But this “likely” standard doesn’t satisfy the legalrequirements of the NGA’s Section 5, the Enron Interstate Pipelinessaid. That section specifically requires FERC “to find that achallenged action is unjust, unreasonable, unduly discriminatory orpreferential prior to granting relief.”

Elsewhere in the rule, pipelines and electric utilities wereespecially troubled by the 20-day deadline that the Commissionallotted for parties to respond to standard or routine complaints,and the even shorter response deadline for more time-sensitivedisputes that become eligible for “fast-track” processing. “A 20calendar day response period…does not permit sufficient time inwhich to research the facts and issues raised by a complexcomplaint and prepare a written response,” noted Chevron Pipe Line,owner and operator of both gas and oil pipelines. It recommendedthat FERC set the response deadline at 30 calendar days from thetime a complaint is filed, while the Williams Cos. suggested simplyclarifying the final rule to allow for “extensions of time for goodcause shown.”

Chevron sees the compressed 20-day deadline for standardcomplaints as unnecessary in light of the “fast-track” proceduresthat were created in the final rule to address disputes requiringimmediate FERC action. The Commission has pledged to resolvedisputes that qualify for fast-track processing within 20 daysafter a response is filed. It has set a target of up to 60 days forresolving standard complaints [RM98-13].

The 20-day response deadline illustrates the “disparatetreatment” by FERC of complainants and respondents, said theSouthern Companies, a group of five public utilities. Thecomplainants, on one hand, are being given “unlimited time [toprepare] a detailed complaint,” while respondents have only 20 daysto “investigate the facts, perform any needed research and preparean answer.” To even the score, the utilities asked FERC to requirecomplainants to file their grievances within 20 days after theoccurrence of the alleged infraction. Parties that fail to meetthis deadline shouldn’t be eligible for fast-track processing oftheir complaints, they said.

Additionally, Chevron took issue with FERC’s requirement thatparties include “all” documents, as well as testimony, in theirresponses. “Aside from the question of whether large amounts ofdata should be provided with an answer, a respondent may simply notbe able to identify, locate and produce all relevant documents inthe time provided for filing its answer.” The requirement raises”serious due process issues,” the pipeline said.

Indicated Shippers, which include mostly major producers, calledon the Commission to establish on rehearing specific deadlines forinterventions and responses to fast-track complaints. FERC didn’tdo this in the final rule, but simply said the response deadlineswould be shorter than the 20 calendar days allotted for standardcomplaints. The producers cautioned against making “any significantreduction” to the 20-day response timeframe for fast-track cases,saying this would make things “very tight.” The deadline shouldn’tbe any shorter than 10 days, and may need to be longer in casesinvolving confidential material, they said.

In addition, producers want FERC to promptly issue notices onwhether individual complaint cases will receive fast-trackprocessing. “Ideally, such notice should be provided by the closeof business on the first business day following the filing of thecomplaint. In that way, the respondent and intervenors will havecertainty quickly as to 1) whether the Commission will shorten theanswer and intervention deadline; and 2) what the new deadline willbe.”

To eliminate late responses and interventions, which “may bogcomplaint proceedings down,” the producers asked the Commission toconsider creating a centralized listing of all pending complaintcases to be posted on its web site. In the alternative, FERC shoulddirect regulated parties involved in complaint proceedings to postnotices of the complaints on their electronic bulletin boards (EBB)or web sites, they said.

On a separate issue, Williams assailed FERC’s decision toestablish a simplified procedure to expeditiously resolvecomplaints that involve less than $100,000. It called theCommission’s action “discriminatory, special treatment for ‘small’controversies…”

Williams raised questions about how the dollar amount of agrievance claim would be assessed, pointing out that the value isoften viewed differently by complainants and respondents. “Forexample, a controversy that is worth $50,000 to the complainant maybe worth millions of dollars to the respondent after a precedent isset and others avail themselves of that precedent.”

Susan Parker

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