Although the agenda for Wednesday’s FERC meeting — the last one of 2001 — is top-heavy in electricity, there are several key natural gas items slated for action, ranging from stepped-up reporting of derivatives and hedging activities to the El Paso Natural Gas complaint investigation, to two embattled gas pipeline projects that have been pending at the Commission for years.

In the wake of Enron Corp.’s financial breakdown, the agency is expected to consider a proposed rulemaking to change the Uniform System of Accounts’ reporting for public utilities, natural gas companies and natural gas and oil pipelines to recognize changes in the fair market value of securities and assets. Also, sources said, the Commission will propose adding a new balance sheet to the Uniform System of Accounts to record accounting and reporting of financial instruments, comprehensive income, derivatives and hedging activities. Reporting could be extended to marketers as well.

FERC had intended to propose the rule even prior to the emerging reports of Enron’s trading irregularities, but the recent events have hastened the agency’s timetable for unveiling the proposed rule (RM02-3).

The Commission also has scheduled for action the ongoing complaint case against El Paso Natural Gas and its affiliates, El Paso Merchant Energy Co. and El Paso Merchant Energy-Gas LP. It could act on one of three things: 1) a request of the FERC Office of General Counsel’s Market Oversight and Enforcement Section (MOE) for an expanded investigation into whether El Paso Natural Gas violated FERC’s open-access regulations by withholding interruptible transportation service to California last winter; or possibly 2) the certified decision of Chief Administrative Law Judge Curtis Wagner Jr., which cleared the El Paso pipeline of market-power abuse charges, but found it guilty of the bid-rigging offense; or 3) a request by the parties to make oral arguments in the case before the full Commission (RP00-241).

However the Commission acts, its ruling in the El Paso case will have far-reaching ramifications for both the natural gas and electricity markets.

In addition, the agency could decide once and for all the fates of the long-pending and troubled Millennium Pipeline and Independence Pipeline projects. The proposed pipelines have been before FERC for years, and have been the target of countless attacks from landowners and from Capitol Hill lawmakers (CP98-150, CP97-315).

Most recently, critics asked the Commission to cancel the Chicago-to-East Coast Independence project because of its failure to obtain adequate contract support, while Millennium’s routing in New York State has been the source of constant and heated dispute.

Rounding out the gas agenda is the Cove Point liquefied natural gas (LNG) terminal in Maryland. FERC is weighing whether, in light of the Sept. 11 terrorist attacks, to rescind an October certificate order in which it gave Williams the go-ahead to re-open and expand its import facilities (CP01-76). The Commission’s order came under attack from Maryland Sen. Barbara Mikulski because of the LNG plant’s close proximity to a nuclear site in her state.

But the Commission said Thursday that it won’t decide the fate of Williams’ certificate until late January 2002, which means that the agency either plans to pull Cove Point from the this week’s agenda or it will address some other aspect of the LNG project.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.