FERC’s conference on the status of price reporting produced a face-off Friday between price index publishers and the director of enforcement for the Commodity Futures Trading Commission (CFTC), a confrontation indicative of the intensity of the behind-the-scenes legal battles being fought by the publishers to maintain confidentiality of their sources.

The CFTC’s Gregory Mocek sat in with FERC staff during questioning of publishers and demanded to know what made publishers think they could deny “unfettered access” to all their survey information by CFTC investigators, saying First Amendment protections to freedom of speech “should not outweigh the integrity of the marketplace.”

Without confidentiality for companies’ proprietary data in the voluntary surveys, “there would be no data and there would be no surveys,” Dexter Steis, NGI’s executive publisher, shot back. Larry Foster, Platts’ global editorial director for power, said Mocek was well aware that Platts had cooperated where it was appropriate with many information requests from the CFTC, FERC and in legal proceedings. But, McGraw-Hill, Platts’ parent company, was first and foremost a publisher with a duty to uphold publishers’ confidentiality rights for sources under the Constitution.

Steis earlier testified that NGI was willing to explore procedures for allowing the federal agencies access to data where there is evidence of a crime, as long as those procedures do not contravene confidentiality agreements the publisher has signed, based on First Amendment protections, with survey participants. NGI also has been in several courts defending against wide-ranging “fishing expeditions” by federal officials for information in the 2000-2002 time period.

Foster said the CFTC should be able to get the information they wanted from the companies involved and shouldn’t have to rely on the publishers. However, Mocek said that in the CFTC’s previous investigations, there was a lot of evidence that was missing or deleted from companies’ records and it would have been easier to get it from the publishers. Without the publishers’ cooperation, the CFTC efforts to obtain information took much longer at an additional cost to taxpayers.

“Just because you can get it easier from us” is not a valid rationale for attempting to get publishers’ information that is protected by the First Amendment, Foster said.

Publishers maintain they cannot be used as government agents to monitor the overall market. FERC has said publishers should affirm they will provide the Commission with access to relevant data in the event of an appropriate request in connection with an investigation into possible false price reporting or price manipulation.

For now it appears it is a moot point. Since the recent scandals and investigations and FERC’s ensuing policy statement, the whole reporting process has improved immeasurably and most companies have been excruciatingly precise in complying with Commission guidelines, industry and publisher representatives said. The CFTC has said its investigations are 90% complete.

In other testimony during FERC’s fourth day-long conference on price discovery in natural gas and power markets, industry representatives generally said they used the natural gas price indexes and had confidence in them, and they recommended the Commission continue to actively monitor publishers’ levels of reported trading activity and pursue compliance with its policy statement by publishers and market participants (see Daily GPI, June 28). Only two out of 26 witnesses said there should be mandatory price reporting.

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