Clarification

In a major clarification of policy, the Federal EnergyRegulatory Commission last week decided it wasn’t necessary toaddress the merits of each objection before approving contestedpipeline rate settlements. Instead, it said settlements could becertified based on the reasonableness of the overall package.

In a major clarification of policy, FERC decided it wasn’tnecessary to address the merits of each objection before approvingcontested pipeline rate settlements. Instead, it said settlementscould be ratified based on the reasonableness of the overallpackage. The policy adjustment was reflected in a rehearing orderthat approved a rate settlement between Trailblazer Pipeline andits customers as being “reasonable as a package” for consentingparties, yet at the same time severed contesting parties, AmocoProduction and Amoco Energy. The action cleared the way forconsenting parties to maintain the benefits of their settlementbargain while giving the Amoco affiliates a chance to litigate the”complex factual issues” that they raised [RP97-408-006].

The following is a clarification of a story titled “NGC’sCapacity Posting,” which ran in Daily GPI, April 22: Thecalculations and conclusions described in the story were totallythose of Michael J. Harris of the Reed Consulting Group ascontained in a FERC filing made by the producers protesting the NGCcapacity contracts on El Paso. The Prebon Energy brokerage housemade no predictions. A footnote to the filing says Prebon, whichhas offices in Jersey City, NJ, and Houston, supplied futurequotes at a specific time – 11:30 a.m. on March 30 – of the SanJuan Basin-California border basis differential. The quoted remarksregarding the expected San Juan-SoCal basis differential for thefuture and the attractiveness of the NGC capacity to other shipperswere those of Harris and the Reed Consulting group. Further Prebonsays it did not give basis information to Mr. Harris or the ReedConsulting Group but that the basis information attributed toPrebon was supplied by one of the parties to the filing. NGIregrets the error.