CapacityCenter.com —ÿa B2B e-commerce website — releasedresearch results yesterday that shows that the pipeline capacityrelease marketplace is responding positively to the price capremoval provisions of the Federal Energy Regulatory Commission’sOrder 637.

The Boston-based data company found that over the past fewmonths there has been a marked increase in the amount of naturalgas pipeline capacity traded, as well as the pricing of thetransportation-only deals.ÿ The provision of Order 637 lifting thecap was largely a response to the growing gray market. The orderheld expectations that with price caps removed, capacity could beallocated more efficiently and openly during peak periods.ÿ TheCapacityCenter.com research indicates that those expectations areon their way to being met.

Capacity release trading is starting to mirror the morecompetitive marketplace.ÿ A look at the past few months reveals anincrease of almost 500% in the number of over-max-rate deals sincethe early months after the ruling went into effect as traders andcontract owners alike take advantage of new opportunities, thecompany said.

“It should be very encouraging to the market participants to beable to add capacity to the menu of flexible tools required tostructure market driven deals,” said Peter Weigand, CapacityCenterCEO.ÿ “The positive impact of capacity pricing that actuallymirrors supply and demand for space will impact both wholesale andretail markets. FERC is to be commended for altering theartificial cap pricing constraints in favor of an approach thatreflects the true marketplace.ÿ While traditional gray-marketbundled gas deals may continue in the more conservative market forsome time to come, traders, retailers, and LDC’s wanting morecompetitive choices and flexibility are seeming to take advantageof the provisions granted by the FERC in order 637.”

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