Changes

FERC reaffirmed most of its initial decisions in Order 637 onrehearing last week, making minor adjustments to theright-of-first-refusal (ROFR), penalty and posting provisions inthe major natural gas rule. “…[O]n balance this is a solid,well-reasoned [rehearing] order that retains the character of theoriginal order,” said Commissioner William Massey.

Twelve OCS producers last week accused FERC of illegallysubjecting offshore production and production-related facilities tothe reporting requirements in its final rule dealing with theregulation of gas transportation facilities on the OuterContinental Shelf (OCS). Interstate pipelines weren’t especiallyhappy with the final OCS rule either, saying it added another layerof unnecessary regulation.

Twelve OCS producers last week accused FERC of illegallysubjecting offshore production and production-related facilities tothe reporting requirements in its final rule dealing with theregulation of gas transportation facilities on the OuterContinental Shelf (OCS). Interstate pipelines weren’t especiallyhappy with the final OCS rule either, saying it added another layerof unnecessary regulation.

The April swing market started to level off for the most partTuesday as price changes were dominated by flatness and smallincreases. The May bidweek remained slow in developing and featuredsome index-plus trading starting to turn into index-slightly minusdeals.

The Midwest utility landscape should expect radical changessoon, as two major mergers have cleared all regulatory approvalsand are closing in on completion.

State regulators yesterday called on the Department ofTransportation (DOT) to put a hold on any proposed changes to aprogram that gives states authority to act as agents of the federalgovernment to conduct safety inspections of interstate pipelines intheir respective states.

Globalization hit the paper energy market yesterday with the bidby the U.S. investment subsidiary of a Dutch banking firm forMerrill Lynch’s energy futures, options and commodities business,and the takeover of Natsource LLC, a leading U.S. broker of naturalgas and electricity, by a London wholesale money broker.

Sabine Pipe Line Co. has gotten the go-ahead from FERC torestructure its business as a limited liability company to takeadvantage of certain state and franchise tax benefits and gaingreater flexibility to raise capital.

After grousing that it didn’t think any changes to its existingpro-rata capacity allocation procedures were “necessary orappropriate,” El Paso Natural Gas reluctantly last week compliedwith FERC’s order and submitted a proposal for a new allocationscheme that would assign “pathed” rights for delivery of a portionof the primary firm gas volumes transported over its system to theCalifornia border.