On a day of giving that included certificates for multiple pipeline expansions (see related stories), FERC also showed it can taketh away. The Commission said Wednesday it will let the price-cap waiver expire Sept. 30 in its pilot program on short-term capacity release transactions.

In June, staff of the Federal Energy Regulatory Commission noted in a 16-page white paper that it appeared that the waiver of the price cap for short-term releases (less than one year) did not result in a large increase of capacity releases or release volumes over the price cap, except during peak periods (see Daily GPI, June 3). At that time, staff said it was seeking public comment for 30 days on whether FERC should continue the program.

In the white paper, staff said it reviewed the capacity-release activity on 34 pipelines during a 22-month period from March 2000 to December 2001. It found a total of 713 releases were transacted at above-cap prices, which represented only 2% of all releases, and that the average total released gas volume at above-cap prices was 4,316 BBtu/d. This accounted for only 2% of all release volumes during the period.

During the time frame, FERC staff reported the average unadjusted rate for all releases (both short and long term) was $0.19 per MMBtu/d, or six cents below the associated $0.26 per MMBtu/d maximum rate. This was only $0.01 per MMBtu/d, or 5.5%, higher than the $0.18 per MMBtu/d shippers would have paid if the cap had still been in place.

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