The Federal Energy Regulatory Commission has upheld its earlier order imposing a heavy reporting requirement on transporters and sellers of natural gas into the California market.

The order, which requires pipelines, local distribution companies (LDCs) and other sellers that serve California to report prices and volumes, has come under widespread attack since it was adopted in late July. The Commission’s action, which the agency says is intended to protect the state’s customers from high gas prices, requires both regulated and unregulated companies to file monthly reports detailing their transactions for the six-month period between Aug. 1, 2001 and Jan. 31, 2002, with the first report to have been due Oct. 1.

Contrary to opponents’ arguments, “the Commission’s action is not a fishing expedition, but has been taken ‘for the purpose of investigating a specific problem that is a matter of urgent concern both to it and Congress,” the FERC order said [RM01-9].

Requests for rehearing or clarification were filed by e prime Inc., Tractebel Energy Marketing Inc. (TEMI), Enron North America, Enron Energy Services, the California Public Utilities Commission, Southern California Gas, and San Diego Gas & Electric. Both TEMI and e prime challenged whether FERC had the authority under the Natural Gas Act (NGA) to require the monthly reports from companies over which it lacks jurisdiction.

But FERC contends otherwise, saying that Sections 14 and 16 of the NGA specifically give it this authority. “Suffice it to say that without the [price and volume] information from non-jurisdictional parties, the Commission cannot determine whether it has the authority to meaningfully address the disparity in the price of natural gas in the California market. Further, the information is necessary for the Commission to advise Congress as to whether it should change the existing regulatory framework under which the Commission now operates.”

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