FERC Chairman James Hoecker said this week he would prefer thatthe gas industry reserve any arguments opposing the Commission’sdaily auction proposal for written comments that are due Nov., 9th,and use the workshop to be held on Oct. 20th to focus on thedetails of how an auction could be put into practice.

“Clearly, the comment period is there for you to argue” againstthe proposed auction, he told industry executives and stateregulators at the Seventh Annual DOE-NARUC Natural Gas Conferencein Pittsburgh, PA. “I think that’s any important question. Shouldwe have an auction at all? Should we have an auction that’sstructured a particular way? Should we have one for intra-daymarkets or should we have it only for transactions that are longerthan a day?”

However before addressing those issues, “we think there aresignificant questions…about how this ought to work in practice.And I think the conference is provided as a forum for us to[specifically] discuss the mechanics” of an auction process, henoted.

“…I guess you could argue that there’s no way on earth thesethings [auctions] could be made to work particularly in ashort-term market,” Hoecker said, but he added that he didn’t thinkthese “broader arguments” were appropriate for the workshop. Henoted he would like to “reserve [that] one day to discuss thedetails of how auctions can be structured and how they ought tooperate.”

The auction is the centerpiece of a notice of proposedrulemaking (NOPR) that the Commission issued in late July. In it,FERC proposes to lift the price caps on short-term capacity (oneyear or less) in return for interstate pipeline conducting dailyauctions of that capacity. The proposal has come under fire fromnearly all sectors of the gas industry because of the Commission’sfailure to provide any details on how the auction would work.

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