[Federal Register Volume 65, Number 233 (Monday, December 4, 2000)]
[Rules and Regulations]
[Pages 75627-75628]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-30595]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 284

[Docket No. PL00-1-000]


Dialog Concerning Natural Gas Transportation Policies Needed to 
Facilitate Development of Competitive Natural Gas Markets

November 22, 2000.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule; notice of staff conference.

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SUMMARY: In Order No. 637, issued on February 9, 2000,the Federal 
Energy Regulatory Commission (Commission) revised its regulatory 
policies, amended its regulations, and established new procedures to 
enhance the competitiveness and efficiency of markets for the 
transportation of natural gas in interstate commerce. This document 
establishes the second of three public staff conferences in a dialog 
between the industry and Commission staff. This conference focuses on 
affiliate issues.

DATES: The conference will take place on January 31, 2001, starting at 
1:00 p.m. Comments and requests to participate are due by January 5, 
2001.

ADDRESSES: Federal Energy Regulatory Commission, 888 First Street, 
N.E., Washington, D.C. 20426.

FOR FURTHER INFORMATION CONTACT: Robert A. Flanders, Office of Markets, 
Tariffs and Rates, Federal Energy Regulatory Commission, 888 First 
Street, N.E., Washington, D.C. 20426. (202) 208-2084, e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION: Take notice that on January 31, 2001, the 
Staff of the Federal Energy Regulatory Commission will hold a public 
conference, as contemplated by Order No. 637, \1\ to discuss how the 
changes in the natural gas market affect the way in which the 
Commission should regulate transportation transactions between 
pipelines and their affiliates, as well as between pipeline capacity 
holders and their affiliates, capacity managers and agents. The 
conference will begin at 1:00 p.m. in the Commission's Meeting Room at 
888 First Street, N.E., Washington, D.C. All interested persons are 
invited to attend.
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    \1\ Regulation of Short-Term Natural Gas Transportation 
Services, Order No. 637, Final Rule, 65 FR 10156 (Feb. 25, 2000), 
FERC Stats. & Regs. Regulations Preambles [Jan. 2000-June 2000] 
para.31,091 (Feb. 9, 2000), Order No. 637-A, Order on Rehearing, 65 
FR 35705 (June 5, 2000) FERC Stats. & Regs. para.31,099 (May 19, 
2000).
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    This conference is part of the continuing process established in 
Order No. 637, \2\ to enable the industry and market participants to 
discuss with staff, and each other, issues relating to the development 
of Commission policy and regulatory responses so that Commission staff 
can develop ``a better understanding of industry trends and regulatory 
changes that better meet the changing character of the industry.'' \3\ 
This is the second of three conferences to discuss these issues.
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    \2\ Id., FERC Stats. & Regs. para.31,091 at pp. 31,268-69.
    \3\ Id., FERC Stats. & Regs. para.31,091 at p. 31,268.
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    As stated in Order No. 637, this conference will focus on ``whether 
the regulatory policy with respect to pipeline affiliates and non-
affiliates, as well as asset managers and agents, should be revised to 
reflect the changing nature of the gas market'' and ``whether there 
needs to be revisions to the regulations relating to pipeline 
affiliates.'' \4\ Currently, the relationship between a pipeline and 
its marketing affiliate(s) is governed by the standards of conduct. \5\ 
Market participants are also able to monitor pipeline/marketing 
affiliate relationships and capacity holder/affiliate relationships by 
obtaining specific information through various posting and reporting 
requirements. This conference is intended to open a dialog concerning 
the market consequences of transactions

[[Page 75628]]

between pipelines and their affiliates as well as transactions between 
non-pipeline capacity holders and their affiliates.
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    \4\ Id., FERC Stats. & Regs. para.31,091 at pp. 31,268-69.
    \5\ 18 CFR Part 161 (2000).
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    This conference will be structured as a roundtable debate with 
staff as moderator. Panel participants will be selected after the 
submission of comments and will be announced in a subsequent notice. 
The debate roundtable format is intended to encourage a discussion of 
the issues, and, accordingly, participants will not be afforded the 
opportunity to make oral presentations at the conference. Parties are 
therefore encouraged to submit written comments by January 5, 2001 to: 
(1) provide input on how to structure the discussion; (2) identify 
issues and examples to foster a meaningful dialog; and (3) suggest 
questions the staff moderator may wish to pose to the panel.
    Comments should include a one-page single spaced position summary. 
Each comment should indicate whether the party is interested in 
participating in the roundtable. To limit the number of panelists, 
parties with common positions are encouraged to select an appropriate 
spokesperson to allow balanced representation of each industry segment, 
such as pipelines, local distribution companies, producers, industrial 
end-users, electric utilities, marketer groups, state regulatory 
bodies, consumer groups, or other recognized industry trade 
organizations or groups. Comments should be addressed to the Secretary, 
Federal Energy Regulatory Commission, 888 First Street, NE, Washington, 
D.C. 20426, and should refer to Docket No. PL00-1-000. Each request to 
participate must include a contact person, telephone number and e-mail 
address.
    Commenters are encouraged to address the following areas:
    Current Regulatory Approach: Comments should address the 
effectiveness of the current standards of conduct under Part 161 of the 
Commission's regulations, 18 CFR part 161 (2000), including a 
discussion of experiences in which the rules have been successful or 
unsuccessful, and whether the costs imposed by the current rules exceed 
the benefits. Comments should also address whether the affiliate 
transaction and index of customer reporting under sections 
284.13(b)(1)(ix) and 284.13(c)(1)(ix), respectively, are effective in 
monitoring affiliate market activity.
    Potential Affiliate Concerns: Comments should discuss whether, and 
in what circumstances, affiliate transactions pose the potential for 
anticompetitive or discriminatory effects or explain why such effects 
are not likely. Comments asserting that affiliate transactions do pose 
anticompetitive/discriminatory risks should provide examples or 
scenarios in which there is the potential for such effects. Comments 
also should address whether the same or different risks apply depending 
on the nature of the affiliate, gas or power marketer, asset manager, 
electric generator, or local distribution company. Comments should 
explore the impact of the changing market conditions on the potential, 
if any, for a pipeline or capacity holder, to give preferential 
treatment to an affiliate. Comments may also consider the potential 
market or consumer benefits of permitting affiliate transactions. 
Comments should focus on whether the problem or benefit relates to the 
ability to acquire services, construction of facilities, the rates at 
which services are acquired, the quality of that service, or other 
factors.
    Potential Approaches for Dealing with Affiliates: Comments should 
address whether there may be better methods of regulating affiliate 
transactions that should be used in lieu of the current standards of 
conduct and reporting requirements. Some alternatives that could be 
considered are: maintaining open and fair bidding procedures; 
prohibitions on affiliates holding capacity on the affiliated pipeline; 
limitations on an affiliate's capacity market share; changes in open-
season bidding evaluations to break-up large capacity packages; or 
divestiture of affiliates. Similar approaches could be considered for 
affiliates of non-pipeline capacity holders. Comments need to address 
the costs and benefits of adopting these approaches and whether there 
is a potential adverse impact on the market, such as the risk of 
unsubscribed pipeline capacity, potential cost shifts, or difficulties 
in planning new pipeline construction without reliance on affiliate 
contracts.
    Comments should consider whether changes to the current standards 
of conduct approach should be made in light of the current operation 
and changing nature of the industry. Specifically, comments should 
discuss the options of eliminating, expanding or modifying the 
standards of conduct, whether there is a need for uniform standards of 
conduct for all sellers or holders of jurisdictional capacity, and 
whether there should continue to be distinctions in the treatment of 
affiliate relationships, and ownership rules, between the gas and 
electric industries.
    The Capitol Connection may broadcast this conference in the 
Washington, D.C. area if there is sufficient interest. For those 
interested persons outside the Washington, D.C. area, the Capitol 
Connection may broadcast the conference via live satellite for a fee if 
there is sufficient interest to justify the cost. To indicate interest 
in either the local or national broadcast, please call David Reininger 
or Julia Morelli at the Capitol Connection at 703-993-3100 as soon as 
possible.
    In addition, National Narrowcast Network's Hearing-On-The-Line 
service covers all FERC meetings live by telephone so that interested 
persons can listen at their desks, from their homes, or from any phone, 
without special equipment. Billing is based on time on-line. Call 202-
966-2211 for further details. Anyone interested in purchasing 
videotapes of the meeting should call VISCOM at 703-715-7999.
    Questions about the conference should be directed to: Robert A. 
Flanders, Office of Markets Tariffs and Rates, Federal Energy 
Regulatory Commission, 888 First Street, N.E., Washington, D.C. 20426, 
202-208-2084. e-mail: [email protected].

David P. Boergers,
Secretary.
[FR Doc. 00-30595 Filed 12-1-00; 8:45 am]
BILLING CODE 6717-01-M