FERC staff is expected to release a paper on Friday that will lay out various options for the Commission to consider as it tries to improve the system for collecting and compiling index prices for natural gas.

“That’s going to set the stage” for the June 24 technical conference at FERC, said spokesman Bryan Lee. The conference, the second on the price-index issue, will explore the “merits of the various options” and try to arrive at a “consensus on the best near-term option.” Joining FERC at the gathering will be the Commodity Futures Trading Commission (CPUC) and the National Association of Regulatory Utility Commissioners (NARUC).

The staff paper basically will say “okay, we were here, we’re coming down the funnel here, what is it we need to do…[to] address the problem sufficiently and then move forward,” said FERC Chairman Pat Wood.

“I’ve got an open mind” when it comes to the proposed solutions, he noted, adding that the entire Commission will be going into the June 24 conference “without a specific remedy to try to sell.”

But “we do want to focus in particular on that SRO [self-regulating organization] idea that people came up with just because we aren’t as familiar with it in the energy side of the world as our colleagues over at the CFTC are,” Wood said.

The battle lines over how to improve the current system for reporting gas prices were clearly drawn at the first FERC conference on the issue in late April (see Daily GPI, April 25) . Index publishers, such as Natural Gas Intelligence and Inside FERC Gas Marketing Report, reported their indexes can and are being fixed to prevent further manipulation by gas traders. They argued that switching from published price indexes to another method of collecting and compiling gas prices would cause a major disruption to the industry.

Critics, however, have called for a major overhaul of the price-reporting system. Some have proposed that FERC favor the establishment of a third-party organization, such as an SRO, which would “substantiate” the pricing and other data provided by traders prior to it being disseminated to price-index publishers.

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