The Federal Energy Regulatory Commission said it plans to hold a public workshop on Nov. 4 to “develop a basis for evaluating [the] adequacy of liquidity” and reliability of published index natural gas prices referenced by interstate gas pipelines in their tariffs.

At the day-long workshop, FERC staff “will seek information as to what factors must be considered to evaluate available data sources of market activity at reference points” in pipelines’ tariffs, providing it with a “better understanding of standard measurements of market activity and the reliability of price indicators,” according to an agency notice [AD03-7-002].

The Commission noted it already has directed staff to assess whether the index gas prices proposed to be used by two pipelines in their tariffs — Northern Natural Gas Co. RP03-533) and Natural Gas Pipeline Company of America (RP99-176-089) — reflect a level of liquidity that is sufficient to assure reliability.

The workshop is an off-shoot of FERC’s policy statement on price discovery that was issued in late July. It called for the index prices used by pipelines to “reflect adequate liquidity” at the points referenced in their tariffs.

Staff is expected to explore a number of issues at the workshop — “How should the Commission decide if a particular market (or index point) represents sufficient activity to provide a reliable price? How can and should minimum levels of market activity required to support a reliable index be measured? [And] what alternatives can be used in the event the underlying data is deemed inadequate?”

The workshop will have a roundtable format, the agency said, and it encourages anyone with “direct knowledge of evaluating liquidity and measuring market activity to participate actively.” This would include traders, risk managers, and purchasers and sellers of gas and electricity.

FERC said a supplemental notice identifying “key discussion questions” will be issued later.

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