The U.S. Federal Energy Regulatory Commission has issued a proposed rule amending existing regulations governing the secondary market for interstate capacity on gas pipelines.
FERC wants to require pipelines to have comparable procedures for capacity release transactions and interruptible transportation services.
It would make capacity releases more flexible by allowing replacement shippers to release capacity in segments and change primary receipt and delivery points.
The proposed rule would end the requirement to bid on release transactions. And it would remove the price cap for released capacity, pipeline-interruptible, and short-term firm capacity in markets where the shipper or the pipeline demonstrate a lack of market power.
Pilot programs
While it reviews comments on the proposed rulemaking, FERC will allow pilot programs to implement the proposed revisions during the coming winter heating season and is inviting local distribution companies and pipelines to apply.
Under the pilot programs, FERC will lift the price cap in designated geographic areas.
The Natural Gas Supply Association was skeptical of the proposed rule, saying it would not work if introduced into markets that are not competitive.
It said, "Producers are concerned about the sweep of the proposed changes, the speed at which the pilot program will be set up, and the limited opportunity for extensive before-the-fact public discussion and comment on these pilot programs."
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