In a very terse order, the Federal Energy Regulatory Commissiondenied producers’ request to stay the waiver of the price caps onshort-term capacity release transactions in time for the scheduledlifting of the price ceiling over the weekend.

The experimental waiver — which removes the price caps onshort-term release transportation deals (less than one year) forthe next two and a half years — went into effect Sunday, despitethe attempt by the Independent Petroleum Association of America(IPAA) and Indicated Shippers to block it until Order 637 underwentfull rehearing at FERC.

The Commission’s decision to lift the price ceiling was thecornerstone of its massive, ground-breaking Order 637, which wasissued in February. This made the producers’ request for the stay avery tall order. “The Commission finds that justice does notrequire the issuance of a stay, and denies [producers’] motion,”the order said.

In the event the stay was refused, Indicated Shippers, an ad hocgroup of major gas producers, and the IPAA, which representsindependent producers, had urged the Commission to consider analternative. They suggested that FERC proceed with removal of theprice cap as scheduled, but require releasing shippers to refundall capacity-release revenues collected above the lawful maximumrates of interstate pipelines. The Commission didn’t address thisoption.

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