The Process Gas Consumers (PGC), representing end users whose processes require the use of natural gas, has advised FERC Chairman Pat Wood it is “strongly” opposed to the federal government taking a hand in the price reporting process for natural gas, which is currently performed by independent publishers (such as NGI).
“We share the concern that efforts to manipulate these indices should be stopped and those who attempted to engage in such actions should be punished. However, consistent with the policies we have advocated for more than two decades, PGC believes that appropriate market solutions can be and will be developed to address the current concerns.”
PGC’s stance was similar to that of the Natural Gas Supply Association (NGSA), which also opposed a government role in price collection or supervision, endorsing the surveys conducted by journalists for pricing publications as “fundamentally sound” (see Daily GPI, March 5). NGSA’s statement was directed in opposition to the campaign being conducted in recent months by an independent producer. “The views of Apache Corporation are not shared by the Natural Gas Supply Association.”
The PGC letter was in response to a statement by the Industrial Energy Consumers of America (IECA), calling on the Federal Energy Regulatory Commission to collect daily gas prices or delegate the Energy Information Administration to do so (see Daily GPI, March 13). IECA had a number of other requirements, such as FERC ordering current contracts signed by end users (but not utilities) abrogated so new contracts may be signed and changing monthly price indexes to the sum of the previous month’s daily prices.
“Although we do not purport to respond to each point in IECA’s letter, for example, we see no reasons to either enact new legislation or possibly amend the Natural Gas Act in order to give FERC or another agency the authority to dictate the terms of private contractual arrangements as an avenue to address the current concerns with gas pirce indices.”
“Private contracts are the heart of the natural gas business and we continue to believe in the sanctity of these contracts.”
The PGC also continues “to believe in the continued confidentiality of the counterparty information underlying these contracts. Finally, and perhaps most importantly, PGC most emphatically opposes any effort to provide parties to gas sales contracts the unilateral right to abrogate or modify these contracts.”
PGC said it has joined in efforts to improve the quality of the data reported to the published indices. This improvement can be achieved “without new legislation, without modifying the Natural Gas Act, without disclosing counter party information, without unnecessary government intrusion into natural gas sales arrangements and without granting parties a government-sanctioned right to abrogate or modify natural gas sales contracts.”
The letter was signed by PGC’s general counsel, Dena Wiggins. Copies were addressed to the other FERC commissioners and to various House and Senate committees and congressmen.
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