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FERC Auction Talk Leaves Visitors Perplexed
FERC staff intentionally avoided responding to technicalquestions about the proposed auction concept that were submitted byseveral gas industry groups prior to a workshop held earlier thisweek, a pipeline group representative charged.
Kevin Madden, director of the Office of Pipeline Regulation,noted at the outset of the workshop Tuesday that several of thewritten questions posed by industry would not be answered on thegrounds that they would require staff to comment on policy. Forexample, he said some asked whether an auction would affectpipeline cost recovery, whether and when reserve pricing would beallowed, and whether an auction would have a negative effect on thelong-term development of the pipeline grid. The questions weresubmitted by the Interstate Natural Gas Association of America(INGAA), the American Gas Association (AGA) and other groups.
“I thought that…truthfully the vast majority of the questionswere not policy questions. They were technical questions about themechanics of auctioning,” said Lorraine Cross, vice president ofregulatory affairs for INGAA. Her comments strongly suggested shebelieved FERC staff used “policy” as a blanket excuse to duck keytechnical questions.
“I don’t think the questions about how you would run a dailyauction were very well answered. We heard a lot about how you’might’ conduct an auction, but nothing about a specific proposal,[or about] one that is likely to be selected” by the Commission,she noted.
The “permutations” in the auction concept presented by FERCstaff at the workshop were endless, she said. “So which auction isit that we should comment on?” Written comments on the Commission’snotice of proposed rulemaking (NOPR), which raised the auctionconcept, are due in January.
Cross also agreed that Madden’s comments about FERC not beingwedded to the auction concept sent a somewhat confusing message.”If [the auction is] not really the direction that the Commissionis going to go, certainly the idea that we’re going to have aseries of technical conferences thereon seems strange,” she said.
“I don’t think that they [FERC staff] necessarily did answerpeoples’ questions” that were submitted in advance, said AGA seniorcounsel Jane Lewis, but she would not go as far as to say this wasdone intentionally. “I don’t know what their instructions were fromupstairs” at the Commission. “…I think it’s hard sometimes tocall what is policy and what is technical.”
Overall, “I think there are some fundamental problems with theauction itself,” Lewis said, adding that nothing presented at theworkshop changed her mind on this point.
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