An analysis of information collected from natural gas publishers, electronic exchanges, voice brokers, and companies reporting prices produces estimates that price index publishers captured nearly 75% of reportable fixed price transactions for the January 2004 bidweek (for February flow) and 70% of daily transactions during January.

That was the conclusion of a data task force made up of members of the Market Price Reporting Action Committee (MPRAC), a 40-member coalition of the natural gas industry, its customers and brokers, publishers and exchanges. In a filing with the Federal Energy Regulatory Commission Friday, the task force report outlined two different methodologies it used to reach its conclusions.

It said the work was intended to supplement FERC’s own second survey of index price reporting. The Commission is expected to issue the results of its survey at its regular meeting Wednesday.

Since the industry task force had only partial information available as to the actual size of the market or the actual number of reportable transactions (fixed price with non-affiliates during a specified time frame), it used mathematical formulas to deduce the universe from data provided by companies, by voice brokers and by electronic exchanges. This was then compared to the aggregated data of index publishers, Natural Gas Intelligence and Platts.

Similar methods were used to assess reporting on the daily power market with the conclusion that about 50% of reportable transactions were received by power survey publishers.

“While uncertainties remain around these estimates, a sensitivity analysis indicates a high degree of confidence that, for the two natural gas markets, the percent reported by the publishers during the January time period exceeded 60%,” the task force said.

Contributing information for the “baseline extrapolation” calculation method were The IntercontinentalExchange (ICE) and voice brokers Amerex, ICAP Energy and Prebon Energy, company members of the Committee of Chief Risk Officers and other trading companies.

The second method of calculation, the “binomial distribution” method, relied on an algebraic formula.

The calculations were made using 16 market locations. The total January bidweek market for those locations was estimated at an average of 11,946,000 MMBtu/d with the publications capturing about 73%. The January daily market averaged 11,490,000 MMBtu/d, of which the publications captured 70%.

The MPRAC coalition filed a report with FERC in March showing marked increases in reporting to the index publishers in February and March over January (see Daily GPI, March 11).

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.