Reforms

An administrative law judge (ALJ) recommended that FERC adopt a number of reforms to ANR Pipeline’s existing cash-out mechanism, putting an end to a way of dealing with shipper imbalances that has “perplexed” the agency and the pipeline’s shippers “for many years.”

Energy market reforms, more complex supply chains and the growing share of international trade in global energy supply pose increasing risks to investors in the natural gas industry, according to the International Energy Agency (IEA), which on Tuesday issued the “World Energy Investment Outlook 2003.”

The House Financial Services Committee last week approved a bill that would provide the Securities and Exchange Commission (SEC) with expanded authority, create a new public regulatory board to oversee accountants, and require greater corporate disclosures.

Taking its cue from FERC’s Dec. 15 ruling on reforms in theCalifornia power markets, a national group of municipal gasdistributors last week called on the Commission to immediatelyissue an order that would set $2.74/Mcf as the benchmark price fornatural gas over the next three years, and would provide forcustomer refunds for any sales above that level.

Responding to a California power market gone haywire andteetering on the brink of operational and financial disaster, FERCFriday issued a series of remedial measures, virtually strippingthe Cal-PX and Cal-ISO of their control of the market and callingmarket stakeholders together to negotiate bilateral forwardcontracts.

“The new market structure is broken and must be discarded,” saidEdison International Chairman John E. Bryson yesterday, in astatement warning that his company soon will be “compelled to takedrastic measures,” including “rationing” electricity. He called fora return to regulation, where needed.

As part of its ongoing quest to comprehensively reform thenatural gas industry, FERC last week announced that it is planninga series of conferences to tackle issues ranging from its proposedcapacity auction to state unbundling to a pre-filing collaborativeprocess for gas pipeline projects.