Nick Snow
Washington Correspondent
WASHINGTON, DC, Oct. 16 -- Mandatory reporting of fixed-price gas transactions to the US Federal Energy Regulatory Commission remains an unsettled issue.
A technical conference on the subject at FERC headquarters Oct. 13 revealed lingering disagreement in the gas industry over reporting requirements discussed at a similar conference 2 years earlier.
The most significant change from 2004 came from the American Gas Association, whose members now believe mandatory reports to FERC are needed to provide a more representative market picture than exists with the current voluntary reporting to private entities that gather prices and sell the information to subscribers.
Jane R. Lewis-Raymond, vice-president, general counsel, corporate secretary, and chief compliance officer at Piedmont Natural Gas Co., said many of the 197 local energy utilities in AGA's membership believe that gas markets, while more transparent than 4 years ago, still need to be improved.
"The shift in policy occurred because we're still getting questions about confidence in prices from our customers, which suggests that the only way to increase that is to make reporting mandatory," Lewis-Raymond told commissioners and others at FERC's recent conference on markets and prices.
Chris Conway, chairman of the Natural Gas Supply Association, who also testified on behalf of the Independent Petroleum Association of America, said a 60% decline in gas prices this year shows the market is transparent and robust.
"It would be a serious miscalculation to assume that seasonal price swings and volatility indicate a lack of transparency or some other dysfunction in the marketplace," said Conway, president of the gas and power division at ConocoPhillips. "Most often, it signifies quite the opposite, sending accurate information that allows for an appropriate supply response."
Donald F. Santa, president of the Interstate Natural Gas Association of America, said that, while interstate gas pipelines have not been major gas market participants since FERC unbundled their services, "there already is tremendous transparency in the natural gas pricing transaction because of existing posting requirements for pipelines."
While the Energy Policy Act of 2005 gave FERC clear jurisdiction over commodity price reporting, he continued, the commission "should think long and hard before it crosses the threshold and uses its new authority." Santa said, noting, "Once regulation begins, it is hard to step back from it."
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