[Federal Register Volume 68, Number 175 (Wednesday, September 10, 2003)]
[Notices]
[Pages 53359-53362]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-23158]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. PL03-3-000]


Proposed Information Collection and Request for Comments

September 5, 2003.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Request for Office of Management and Budget Emergency 
Processing of proposed information collection and request for comments.

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SUMMARY: In compliance with the requirements of Section 3507(j)(1) of 
the Paperwork Reduction Act of 1995 (Pub. L. 104-13), and 5 CFR 1320.13 
of the Office of Management and Budget (OMB) regulations, the Federal 
Energy Regulatory (Commission) is providing notice of its request to 
OMB for emergency processing of a proposed collection of information in 
connection with the ``Policy Statement on Natural Gas and Electric 
Price Indices'' issued in Docket No. PL03-3-000. The Commission is 
soliciting public comment on the specific aspects of the information 
collection described below.

DATES: The Commission and OMB must receive comments on or before 
September 17, 2003. Because the Commission has requested OMB to process 
the proposed collection of information in Docket No. PL03-3-000 on an 
emergency basis, comments on this collection of information should be 
filed with OMB, attention FERC Desk

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Officer, as soon as possible. The Commission is requesting that OMB 
make a determination on this information collection requirement by 
September 19, 2003.

ADDRESSES: Comments may be filed electronically via the eFiling link on 
the Commission's Web site at http://www.ferc.gov . Commenters unable to 
file comments electronically must send an original and 14 copies of 
their comments to: Federal Energy Regulatory Commission, Office of the 
Secretary, 888 First Street, NE., Washington, DC 20426. A copy of the 
comments should also be served on OMB: FERC Desk Officer, Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Room 10202 NEOB, 725 17th Street, NW., Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Ted Gerarden, Office of Market 
Oversight and Investigations, Federal Energy Regulatory Commission, 888 
First Street, NE., Washington, DC 20426, [email protected] or (202) 
502-6187; Rafael Martinez, Office of Market Oversight and 
Investigations, Federal Energy Regulatory Commission, 888 First Street, 
NE., Washington, DC 20426, [email protected] or (202) 502-6336.

SUPPLEMENTARY INFORMATION: This reporting requirement is intended to 
determine whether the Policy Statement on Natural Gas and Electric 
Indices, 104 FERC ] 61,121 (July 24, 2003), is having the desired 
effect of encouraging more voluntary reporting of energy trade data to 
support the formation of accurate, reliable and transparent prices for 
natural gas and electricity.
    Price indices are widely used in bilateral natural gas and electric 
commodity markets to track spot and forward prices. Uncertainty over 
industry expectations and government regulatory guidelines, however, 
has inhibited the number of transactions voluntarily reported to index 
developers, resulting in a lack of confidence in the reliability of 
energy price indices. The Commission determined that steps were needed 
to strengthen confidence in the day-ahead, month-ahead and forward 
natural gas markets and the day-ahead and forward electricity markets 
by encouraging comprehensive reporting of energy transactions to price 
index developers and by encouraging price index developers to provide 
useful information about liquidity to the industry.
    The Policy Statement provided the industry with the Commission's 
views on desirable characteristics of a price index and the standards 
companies should use when reporting energy transactions to index 
developers. In addition, the Commission adopted a ``safe harbor'' 
provision for market participants. If the market participants adopt and 
follow the standards set out in the Policy Statement, the Commission 
will presume that transaction data submitted to index developers is 
accurate, timely and submitted in good faith, and the Commission will 
not penalize inadvertent errors.
    The Policy Statement is intended to increase voluntary 
participation in the price formation process, with the expectation that 
greater participation in turn will give all industry participants more 
confidence in the liquidity and transparency of reported prices.
    The Commission will monitor developments under the Policy Statement 
closely over the next several months and assess the degree to which 
voluntary reporting increases, as well as how index developers and data 
providers implement the Commission's recommended standards. If 
voluntary reporting does not increase to the point that indices are 
sufficiently robust to support a healthy market, or if the standards 
recommended by the Commission herein are not widely adopted, the 
Commission will consider further action to ensure accurate, dependable, 
and trustworthy wholesale price information.
    The information collection will help the Commission understand 
whether the Policy Statement standards are being adopted by the 
industry and whether market participants are reporting bilateral energy 
transactions to any greater degree than before the Policy Statement was 
issued. The information reported will be of a general nature, 
concerning each respondent's practices with respect to reporting energy 
trade information. The survey will not seek specific trade data.
    The information to be collected will assist the Commission to 
determine whether the Policy Statement is having a beneficial effect 
and, if not, what further steps the Commission can take to encourage 
voluntary participation in price formation or to mandate price 
reporting. This information will enable Commission staff to carry out 
the mandate of the Policy Statement to monitor price formation for 
natural gas and electricity.
    The Commission needs to gauge reaction to the Policy Statement more 
quickly than this in order to determine whether further steps are 
needed to increase the accuracy, reliability and transparency of price 
indices before the winter heating season. The industry has made it 
clear to the Commission that the issue of price formation is of 
critical importance and that time is of the essence in providing 
administrative guidance that will improve the current situation.
    Nature of Information Collection: The survey will be sent to no 
more than 300 market participants. The participants selected will 
include producers, generators, marketers, industrial users, and 
commercial customers for natural gas and/or electricity. The companies 
will be sellers or purchasers of large quantities of energy likely to 
engage in multiple transactions at different locations to market 
natural gas and/or electricity or to serve their energy needs. The 
companies will be ones that engage in bilateral arm's length energy 
trades in the physical (cash) markets. Entities that trade in financial 
instruments only will not be included in the survey.
    The survey consists of 20 questions, ten concerning current 
activity since issuance of the Policy Statement and ten parallel 
questions concerning activity before the Policy Statement. The survey 
seeks information about whether the participant engaged in bilateral 
energy trades and, if so, whether the participant trades in natural gas 
or electricity (or both). The survey asks the participant whether it is 
currently reporting trade data and, if not, why not, and whether few, 
some, many, or all trades were reported.
    The survey asks how the participant reports trade data and what 
elements of trade information are reported. The survey asks the 
participant if they have adopted the guidelines for trade data 
reporters in the Policy Statement and, if so, to provide information to 
the Commission about the standards of conduct adopted. The survey 
consists primarily of ``yes/no'' questions or multiple choice 
questions, but respondents may also provide a narrative response to any 
question.
    The Commission proposes to collect information from the surveyed 
market participants two times: an initial response due October 1, 2003 
and a supplemental response due March 1, 2004. The supplemental 
response is to determine whether there have been any changes from the 
initial response. This followup is necessary to determine whether the 
Policy Statement is having the desired effect of encouraging more 
voluntary reporting of price information to price index developers.
    Background: The Commission's statutory obligations under the 
Natural Gas Act (NGA), 15 U.S.C. 717, the Natural Gas Policy Act 
(NGPA), 15 U.S.C. 3301, and the Federal Power Act,

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16 U.S.C. 791, are to maintain just and reasonable rates for 
jurisdictional sales of natural gas and electricity and for natural gas 
transportation and power transmission, to protect consumers of natural 
gas and electricity from the exercise of monopoly power, and to 
establish a regulatory framework that improves the competitive 
structure of the natural gas and electric power industries. The current 
regulatory model is a hybrid that has evolved from total regulatory 
control of monopoly interstate natural gas pipelines and electric 
transmission facilities to a regulatory environment that fosters 
competition.
    In this environment, the wholesale markets must be structured to 
promote competition. Robust price formation is a key element of such 
markets. Under market-based pricing, the Commission must ensure that 
wholesale prices for natural gas and electricity are formed in a robust 
market with sufficient information available to all participants to 
permit them to judge the liquidity of markets and accuracy of the 
prices reported.
    To enable the Commission to fulfill this duty, the NGA, the NGPA, 
and the FPA all authorize the Commission to conduct investigations and 
collect information. In this case, the information relates to whether 
market participants are helping in price formation. In other words, the 
survey asks market participants whether they are reporting their energy 
trades to a developer of commercially available price indices or 
trading or having trades confirmed on electronic exchanges that 
generate indices from such electronic trades or confirmations.
    Information Collection Statement: The Paperwork Reduction Act of 
1995, 44 U.S.C. 3507, and Office of Management and Budget (OMB) 
implementing regulations at 5 CFR 1320.10 require OMB to approve 
certain reporting and recordkeeping requirements (collections of 
information) imposed by a federal agency. Upon approval of a collection 
of information, OMB will assign an OMB control number and an expiration 
date.
    The proposed information collection request will be done in a two-
stage survey (OMB Control No. to be assigned). The respondents will 
include producers, generators, marketers, industrial users, and 
commercial customers. Responses to the information collection request 
will be voluntary.
    Burden Statement: The maximum public reporting burden for this 
collection is estimated as:

------------------------------------------------------------------------
                                                          Supplemental
         Information item            Initial response       response
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Number of respondents.............          300                300
Number of hours per respondent....            5                  2
                                   --------------------
      Total hours.................        1,500                600
                                   ====================
      Grand total hours...........  .................        2,100
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    Cost to respondents:

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                                      Person hours per year     Estimated salary per
Total hours burden all respondents             \1\                    year \2\                 Total cost
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2,100.............................                    1,040                  $117,041              $236,332.79
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\1\ Because this information collection has been submitted for approval under OMB's emergency processing
  procedures, the Commission will only collect data for a six month period. As a result, for computation of the
  work hours per year factor, the hours have been cut in half.
\2\ Because of the variation of salaries for professional and clerical staff among the respondents and in order
  to use an average, the Commission is assuming that the ``salary'' per employee within the energy industry is
  comparable to that of the Commission staff. This average takes into account the salaries and benefits of
  professional, clerical, and technical staff.


    The average cost per respondent is $787.77.
    Comments are invited on: (1) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the Commission, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility and clarity of the information to be collected; and (4) ways to 
minimize the burden of the collection of information on those who are 
to respond, including the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology e.g. permitting electronic submission of 
responses. Interested persons may send comments regarding these burden 
estimates or any other aspect on the proposed information collection, 
including suggestions for reductions of burden, to the FERC Desk 
Officer, Office of Information and Regulatory Affairs, Office of 
Management and Budget, Room 10202 NEOB, 725 17th Street, NW., 
Washington, DC 20503, phone (202) 395-7318 or by fax at (202) 395-7285. 
A copy of any comments filed with OMB should also be filed with the 
Commission. Comments may be filed electronically via the eFiling link 
on the Commission's Web site at http://www.ferc.gov . Commenters unable 
to file comments electronically must send an original and 14 copies of 
their comments to: Federal Energy Regulatory Commission, Office of the 
Secretary, 888 First Street, NE., Washington, DC 20426.
    Document Availability: In addition to publishing the full text of 
this document in the Federal Register, the Commission also provides 
interested persons an opportunity to inspect or copy contents of this 
document during normal business hours in the Public Reference Room at 
888 First Street, NE., Room 2A, Washington, DC 20426. Additionally, 
comments may be viewed and printed remotely via the Internet through 
FERC's home page, http//www.ferc.gov, and in FERC's Public Reference 
Room during normal business hours (8:30 a.m. to 5 p.m. Eastern time) at 
888 First

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Street, NE., Room 2A, Washington, DC 20426.

Magalie R. Salas,
Secretary.
[FR Doc. 03-23158 Filed 9-9-03; 8:45 am]
BILLING CODE 6717-01-U