FERC said Thursday it has completed audits of three energy companies’ practices for the reporting of wholesale energy prices to price index publishers, finding some noncompliance areas that the companies have agreed to correct.
FERC’s Division of Audits within the Office of Enforcement conducted audits of Marathon Oil Co., Anadarko Energy Services Co. and BG Energy Merchants LLC for transactions reported for the period of Jan. 1, 2005 through Dec. 31, 2006. The purpose of the audits was to determine whether the companies’ reporting of transactions to price index publishers complied with the Federal Energy Regulatory Commission’s policy statement addressing natural gas and electric price indexes, which was issued in 2003 and later clarified in 2005.
With respect to Marathon Oil, FERC’s audit staff identified one area of noncompliance with the code of conduct standard of the agency’s policy statement. The two codes of conduct (Code of Business Conduct and Code of Conduct for Blanket Marketing Certificate Holders) maintained by Marathon did not provide details about the company’s price index reporting processes, procedures and activities, FERC said. It noted that neither document served as a “clear code of conduct” for employees to follow in buying or selling natural gas, and in reporting data from such transactions to price index developers.
While the Code of Business Conduct was posted on Marathon’s website, FERC said the Code of Conduct for Blanket Marketing Certificate Holders was not available on the company’s website.
Marathon has agreed to create a new code of conduct that “clearly discusses” the procedures its employees will follow in buying or selling natural gas, and in reporting data from such transactions to price index developers, the FERC order said [PA06-13]. In addition, the company said it will make the new code of conduct available on its website within 30 days of the issuance of the final audit report.
Anadarko Energy got a clean bill of health from FERC, with the agency saying “there are no audit findings or recommendations that require Anadarko to take corrective action at this time [PA06-11].”
However, FERC found three areas of noncompliance with BG Energy’s price reporting. For starters, it admonished the company for failing to notify the Commission that it began reporting transactions to Platt’s monthly survey within 15 days of doing so. Moreover, BG Energy did not have an annual review of its data-gathering and submission process conducted by an independent auditor, the order said [PA06-12].
Lastly, the Commission said the company failed to make its code of conduct for price index reporting available to the public on its corporate website or by any other means. BG Energy has agreed to make the necessary changes to comply with FERC rules, the agency said.
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