The major natural gas and oil associations, price publishers NGI and Platts, the Intercontinental Exchange and the New York Mercantile Exchange joined Tuesday in one last plea to Congress — to the conferees on the energy bill — to take note of the progress made over the last three years in voluntary price reporting and not impose a new mandatory system.

“…we believe a new mandated and subsidized reporting system is not now the best approach to addressing this issue, and could, in fact, prove to be counterproductive,” the group said. In addition to those named above, the letter was signed by the American Gas Association, American Petroleum Institute, Electric Power Supply Association, Natural Gas Supply Association, and the Process Gas Consumers Group.

The letter was directed to the conference committee leaders and staff, who are currently attempting to meld the Senate and House versions of the bill before it is presented to the conferees for amendment or vote. The price transparency language in the House version mandates that the Federal Energy Regulatory Commission set up its own price survey system. The Senate version says FERC “may” go into the price information business.

The letter asks the legislators to “take note of the truly unique cooperative industry and government price reporting system that has been developed over the last three years, which has brought a 400% increase in price survey participation and reestablished confidence in natural gas and electric market transparency.

“Since the market crisis of 2000-2001, FERC, the Commodity Futures Trading Commission (CFTC), New York Mercantile Exchange (NYMEX), the IntercontinentalExchange (ICE), Platts, Natural Gas Intelligence, the entire energy industry and others all have been actively working to restore confidence in wholesale prices, as well as to increase transparency and liquidity.”

The group pointed to the positive landmarks on the market’s road back from the brink, including: FERC’s policy statement setting guidelines for publishers and market participants, and enforcement of the law through the prosecution of individuals and companies for fraudulent reporting.

Companies are following the guidelines and reporting transaction specific information from back offices to price publishers, and senior company personnel are certifying the accuracy and completeness of the data (similar to the Sarbanes-Oxley requirements).

Confidence in the marketplace has increased, the group said, citing a 2004 FERC survey reporting more than 90% of respondents indicated they now rely on the natural gas indices for physical transactions. FERC also tallied a positive confidence “composite” of 7 on a scale of 1-10.

And in a November 2004 market review, FERC found “a steady increase in the number of companies reporting their transactions, and a substantial improvement in the systems by which prices are reported.” The Commission also said it would take no action toward a mandatory price reporting system or centralized data collection, but instead would continue to monitor the voluntary reporting system.

And new FERC Chairman Joseph T. Kelliher stated just this month he felt “‘[b]y and large, voluntary price reporting is working,’ . . . and he did not ‘see a need to go beyond that and mandate price reporting.’ The Chairman also noted that he sees little value in the creation of a data hub,” the letter to Congress said.

Observers note that while price transparency is not an issue that is on the radar of a large number of congressmen, there are some powerful hard-liners who believe government should be more involved in controlling market volatility. It is impossible to tell in the midst of the cutting, shaping, trading and dealmaking that is going on now over various provisions of the bill, how controversial provisions will fare.

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