The shorter response times imposed by FERC in its final rule toexpedite resolution of industry disputes will place an inordinateburden on interstate pipelines and other regulated companies thatare likely to be targets of customer complaints, pipelines andpower utilities contend. Even natural gas producers – the biggestproponents of a faster complaint process – expressed some concernabout the compressed deadlines.
Major producers, however, generally agreed with the “fundamentalfeature[s]” of the final rule, while interstate pipelineschallenged it on substantive grounds. The Interstate Natural GasAssociation of America (INGAA) and individual pipelines argued thatFERC overstepped its authority under the Section 5 complaintregulations when it said it would act on complainants’ requests forpreliminary relief pending a final decision.
The Commission has “blurred the distinctions” between twodifferent statutory provisions of the Natural Gas Act (NGA), INGAAsaid. Section 4 gives it permission to take interim actions, but”Section 5…contains no such similar grant of authority to issuepreliminary relief prior to completion of a hearing orcorresponding refund protection.”
Separately, pipelines and electric utilities were especiallytroubled by the 20-day deadline that the Commission allotted forparties to respond to standard complaints, and the even shorterresponse deadline for complaints that are eligible for “fast-track”processing. “A 20 calendar day response period…does not permitsufficient time in which to research the facts and issues raised bya complex complaint and prepare a written response,” noted ChevronPipe Line, an owner and operator of both natural gas and oilpipelines. It urged FERC to lengthen the deadline for responses to30 calendar days from when a complaint is filed at the Commission.
The 20-day response deadline was illustrative of the “disparatetreatment” by FERC of complainants and respondents, said theSouthern Companies, a group of five public utilities. Thecomplainants, on one hand, are being given “unlimited time [toprepare] a detailed complaint,” while respondents have only 20 daysto “investigate the facts, perform any needed research and preparean answer.” To even the score, the utilities insist complainantsshould be required to file their grievances within 20 days afterthe occurrence of the alleged infraction. Parties that fail to meetthis deadline shouldn’t be eligible for fast-track processing oftheir complaint, they propose.
Chevron further took issue with FERC’s requirement that partiesinclude “all” documents, as well as testimony, in their responses.”Aside from the question of whether large amounts of data should beprovided with an answer, a respondent may simply not be able toidentify, locate and produce all relevant documents in the timeprovided for filing its answer.” The requirement also raises”serious due process issues,” the pipeline said.
Indicated Shippers, which include mostly major producers, calledon the Commission to set specific deadlines for interventions andresponses to fast-track complaints. FERC didn’t do this in thefinal rule but simply said the response deadlines would be shorterthan the 20 calendar days allotted for standard complaints. Theproducers cautioned FERC against making “any significant reduction”to the 20-day timeframe for fast-track cases, saying this wouldmake things “very tight.” Specifically, they said the responsedeadline shouldn’t be shorter than 10 days.
In addition, producers asked the Commission to promptly issuenotices as to whether complaint cases will receive fast-trackprocessing. “Ideally, such notice should be provided by the closeof business on the first business day following the filing of thecomplaint. In that way, the respondent and intervenors will havecertainty quickly as to 1) whether the Commission will shorten theanswer and intervention deadline; and 2) what the new deadline willbe.
They also called on FERC to eliminate the compressed window ofopportunity – within five days after a complaint is filed – inwhich interested parties have to seek confidential materials fromthe complainant, and to amend the final rule requiring acomplainant to disclose confidential materials to a non-party inthe case.
To eliminate late responses and interventions, which “may bogcomplaint proceedings down,” the producers proposed that theCommission – at a minimum – created a centralized listing of allpending complaint cases to be posted on its web site. In thealternative, FERC should direct regulated parties involved incomplaint proceedings to post notices of the complaints on theirelectronic bulletin boards (EBB) or web sites, they said.
Ideally, the producers would prefer that regulated companies berequired to post full-text copies of their complaints on FERC’s website, but the Commission deferred action on this in the final ruleuntil it completes an internal review of its information technologycapabilities under its FERCFirst initiative.
If all else fails, pipelines and other regulated entities couldpost similar information on their EBBs or web sites, producersadded. “Posting of pending complaints involving a particularpipeline, or, at least, a listing of such complaints, on thatpipeline’s interactive web page can be implemented by the pipelineas part of the required web site implementation, at a minimal costto the pipeline, and [at] no cost to the Commission.”
On a separate issue, The Williams Cos. urged FERC to eliminatethe provision that establishes a simplified procedure forexpeditiously resolving complaints that involve less than $100,000.It said this was “discriminatory, special treatment for ‘small’controversies…”
Williams argues that the value placed on a claim by acomplainant might not accurately reflect the ultimate impact of theentire complaint proceeding. “For example, a controversy that isworth $50,000 to the complainant may be worth millions of dollarsto the respondent after a precedent is set and others availthemselves of that precedent. Further, issues that involve mattersof policy, even if the amount in controversy is small, must begiven full and adequate consideration.”
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