The Federal Energy Regulatory Commission has scheduled on itsmeeting agenda for next week a policy statement initiative aimed attaking a realistic assessment of the future demand outlook fornatural gas in the eastern half of the United States.
Although placed on the agenda, Chairman James Hoecker said hewasn’t certain whether the Commission would act on the policystatement at the April 14th meeting. “We have to decide thatinternally. We got a place-holder there [on the agenda for theitem], and we’re going to try and figure…out between now and themeeting” whether to vote on it, he said Thursday following hisspeech to the Natural Gas Roundtable in Washington D.C.
“I think what we’re going to do is end up with fundamentally adata-collection exercise” to evaluate future gas demand, using theexpertise of the Energy Information Administration, the electricindustry and other gas customers, Hoecker noted. “But we haven’treally figured out what the scope of it’s going to be, and howwe’re going to run it.”
He said he didn’t “really want to say too much [about it]because it could go in a variety of different directions.”Personally, “I’m interested in finding out pretty much what’shappening east of the Mississippi. I don’t know if that’spossible.”
Hoecker noted that the Commission also was “talking about”holding a conference to get a better handle on future gas demand.Both the Interstate Natural Gas Association of America and theEdison Electric Institute have asked FERC to hold a conference tojudge the future level of gas demand in the Northeast, and theamount of new capacity needed.
The Commission’s decision to take a closer look at projected gasconsumption comes after it bypassed preliminary determinations(PDs) for four pipeline projects to the Northeast last month due toquestions about the “need’ for them. FERC was very divided on thePD issue, with Commissioners Vicky Bailey and Curt Hebert Jr.dissenting.
“But I think all of us [on the Commission] are very interestedin ascertaining the nature of growing natural gas demand not justin the Northeast, but in other growing markets-Florida, theAtlantic area, Wisconsin [and] other areas in the Midwest-to helpus inform ourselves about the need for capacity,” Hoecker said.Data culled from the policy statement initiative would be”complemented” by the gas industry’s comments on the notice ofproposed rulemaking, which also raised the ‘need’ issue. Industrycomments are due later this month at FERC.
“I think we’re going to have a lively internal discussion aboutit [gas demand], and hopefully [will] arrive at a consensusapproach to making these kinds of decisions in the future” withrespect to the need for new capacity, he told gas industryexecutives and trade group representatives.
On a related issue, an official of Columbia Energy, sponsor ofthe Millennium project, asked Hoecker whether he thought pipelineaffiliate contracts and third-party contracts should be viewedsimilarly or differently when judging the ‘need’ for a project.
“Whether we ought to make a distinction is a fair question.Frankly, I think a contract’s a contract,” Hoecker said, but headded it also “depends on the circumstances surrounding it and theterms of the contract.” He conceded that FERC Commissioners “havenot put our heads together and come to a common understanding [on]exactly how to interpret” the issue.
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