[Federal Register Volume 69, Number 151 (Friday, August 6, 2004)]
[Notices]
[Pages 47922-47924]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-1735]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. AD04-10-000]


Enhanced Reporting of Natural Gas Storage Inventory Information; 
Notice of Technical Conference and Request for Written Comments on 
Enhanced Reporting of Natural Gas Storage Inventory Information

August 2, 2004.
    The Federal Energy Regulatory Commission (Commission) will hold a 
technical conference to explore whether the Commission should institute 
a generic rulemaking to consider whether the Commission should require 
interstate natural gas pipeline companies and other owners and 
operators of natural gas storage facilities to electronically post each 
day actual natural gas storage inventory levels on their systems for 
the preceding day. Specifically, the technical conference will explore 
the feasibility, usefulness and appropriateness of requiring posting on 
a standardized basis for the previous gas day (1) Net aggregate actual 
injection or withdrawal data; (2) actual total available working gas; 
and (3) actual total storage inventory volume. The conference will take 
place on September 28, 2004, at 9:30 a.m. (e.s.t.) in the Commission 
Meeting Room at the Commission's headquarters, 888 First Street, NE., 
Washington, DC. The Commission's staff will conduct the conference and 
members of the Commission may attend it. In preparation for the 
technical conference, the Commission invites all interested parties to 
submit written comments, addressing the subject and questions discussed 
below, on or before September 10, 2004.\1\
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    \1\ The Commission issued an order today, in Docket No. IN04-2-
000, approving three Stipulation and Consent Agreements 
(Agreements). These Agreements state that the two interstate natural 
gas pipeline companies and one local distribution company that 
signed the Agreements communicated their respective non-public 
storage inventory information to customers or industry participants.
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Background

    Every Thursday at 10:30 a.m. (e.s.t.), the United States Department 
of Energy's Energy Information Administration (EIA) releases a report 
of natural gas storage inventory levels for the United States, 
including for Eastern, Western and Producing regions. The EIA compiles 
this report based on information provided to it by a sampling of 
storage owners and operators, usually on the Monday that precedes the 
Thursday report. The reporting companies provide weekly net aggregate 
storage inventory information for the week that ended with the gas day 
that ended on the preceding Friday. The EIA's release of its weekly 
report is a regularly watched event in the natural gas industry because 
changes in natural gas storage inventory levels can affect commodity 
prices, the price of NYMEX natural gas futures contracts, other 
physical and financial transactions, and a variety of transportation 
and storage transactions. Increased volatility observed in the trading 
of NYMEX natural gas futures contracts immediately following the EIA's 
release of its weekly storage report suggests the importance to many 
industry participants of information related to natural gas storage 
inventory levels. In addition, the order the Commission is issuing 
today approving Stipulation and Consent Agreements (Agreements) in 
Docket No. IN04-2-000, indicates that some market participants obtained 
non-public storage inventory information sourced from interstate 
pipelines, or in one case, a local distribution company (LDC), because 
of the perceived market value of this information.
    The Commission currently requires interstate pipelines that provide 
service under blanket certificates pursuant to subparts B and G of part 
284 of the Commission's regulations, to post the availability of all 
transportation services whenever capacity is scheduled at receipt 
points, on the mainline, at delivery points and at storage fields. 18 
CFR 284.13(d)(1). This regulation does not address storage activity 
that is not subject to daily nomination and scheduling, such as no-
notice storage and transportation services. Accordingly, pipelines have 
reported storage activities in different ways.
    The interstate pipeline companies that executed the Agreements in 
Docket No. IN04-2-000 have indicated that they are, or soon will be, 
posting weekly net aggregate storage inventory information. Other 
interstate natural gas pipelines post storage inventory information on 
a daily basis, but may post injections and withdrawals attributable to 
no-notice contractual service on a weekly basis. Alternatively, storage 
activities attributable to no-notice contractual service may be 
partially posted, depending on whether customers make nominations at 
the pipeline's storage points for this service.
    Inconsistent posting of storage activities and inventories hinders 
efforts to compare and make sense of this information, leading to less 
efficient market outcomes. Current posting

[[Page 47923]]

practices impair the value of this information as a useful tool to 
understand and anticipate demand and other relevant industry trends. 
For example, traders who seek to determine optimal hedging strategies 
during peak periods or pipeline customers who seek to anticipate 
whether nominations to secondary points will likely be honored would 
benefit from more consistent and timely storage inventory information.
    In addition, although section 284.13(d)(1) mandates reporting of 
scheduled volumes, actual volumes can be a superior indicator of 
inventory activity. Actual volumes can deviate significantly from 
scheduled volumes, particularly during periods of high demand.
    Electronic metering permits natural gas pipeline companies to 
rapidly post net aggregate storage information on a daily basis. 
Actual, daily posting of day-before injection or withdrawal activity 
would speed communication of storage data to the public and provide 
nearer-in-time information than is provided in the EIA's weekly report. 
Increased transparency promotes efficiency and could deter abuses 
associated with non-public storage inventory information.
    LDCs and intrastate pipelines that provide service pursuant to 
subpart C of part 284 of the Commission's regulations often own and 
operate substantial storage capacity. Many of these entities do not 
post storage inventory information. Posting such information would 
contribute to the goals of market transparency and abuse deterrence. 
However, posting of uniform storage inventory information could affect 
the often differing obligations and business purposes of these entities 
relative to interstate pipeline companies. Further, the Commission's 
jurisdiction over these entities is more limited than it is over 
interstate pipeline companies. The technical conference will seek to 
explore the feasibility and usefulness of requiring LDCs and intrastate 
pipelines that provide service pursuant to subpart C of part 284 of the 
Commission's regulations to post storage inventory information.

Questions for Comment

    The Commission seeks comments on the following questions:

I.Questions for Interstate Natural Gas Pipeline Companies, Their 
Customers and Other Industry Participants

    A. How would standardized, daily posting of actual storage 
injection or withdrawal activity contribute to market transparency? 
What are the specific efficiencies that would result from such posting?
    B. What costs and inefficiencies does the industry (or any parts of 
it) experience because of the current inconsistency of storage 
inventory reporting?
    C. Are participants in physical and financial commodity markets 
concerned with price volatility following the release of the EIA's 
weekly storage report? Would improved posting of storage information be 
likely to reduce price volatility?
    D. How important is posted storage inventory information to buying 
and selling gas and executing financial transactions?
    E. How do pipeline customers use posted storage information to make 
decisions regarding nominations, the purchase of storage capacity, the 
purchase of gas, and other commodity and operational decisions?
    F. How important is the timeliness of posting storage inventory 
information? Specifically, to what extent would daily reporting benefit 
the industry relative to the current daily and weekly posting of 
storage-related information by pipelines and the EIA?
    G. In what ways and to what extent would posting of actual 
injection or withdrawal volumes be superior to posting scheduled 
injection or withdrawal volumes?
    H. Could posting be fully consistent with the data that reporting 
pipelines provide the EIA on a weekly basis? What could be the cause 
for any differences and how significant would they be?
    I. What costs would pipelines expect to incur to post standardized, 
daily actual injection or withdrawal volumes on a day-after basis? What 
concerns, if any, do pipelines have regarding the feasibility from a 
technical perspective of accurate storage inventory posting?
    J. How should pipeline companies address the posting of inaccurate 
information and information that needs to be subsequently adjusted?

II. Questions for Intrastate Pipeline Companies and LDCs That Provide 
Service Pursuant to Subpart C of Part 284 of the Commission's 
Regulations, Their Customers and Other Industry Participants

    A. To what extent do such intrastate pipeline companies and LDCs 
post storage inventory information? What storage information do they 
post?
    B. What concerns would such intrastate pipeline companies and LDCs 
have with respect to posting their daily actual injection orwithdrawal 
activity on a day-after basis?
    C. Does the Commission have the authority under Subpart C of 284 of 
its regulations, or under other statutory or regulatory authority, to 
require intrastate pipeline companies or LDCs to post storage inventory 
information?
    D. What contribution to market transparency and efficiency would 
posting daily actual injection or withdrawal activity on a day-after 
basis have for natural gas markets and for customers of such intrastate 
pipeline companies and LDCs?
    E. What costs would such intrastate pipeline companies and LDCs 
expect to incur to post standardized, daily actual injection or 
withdrawal volumes on a day-after basis? What concerns, if any, do 
intrastate pipeline companies and LDCs have regarding the feasibility 
from a technical perspective of such posting?
    F. How should intrastate pipeline companies and LDCs address the 
posting of inaccurate information and information that needs to be 
subsequently adjusted?

Public Comment Information

    As noted above, in preparation for the technical conference, the 
Commission invites interested persons to submit written comments on the 
matters raised in this notice, including any related matters or 
alternative proposals that commenters may wish to discuss. All written 
comments should be submitted on or before September 10, 2004. We are 
hereby establishing a proceeding, Docket No. AD04-10-000, to provide an 
opportunity for all interested persons to submit comments, and all 
future actions with respect to the technical conference will also be 
taken under this docket number.
    All comments should include an executive summary that does not 
exceed two pages. Comments should not exceed 15 pages. In addition, if 
answering a specific question, please identify the question. To 
conserve time and avoid unnecessary expense, persons with common 
interests or views are encouraged to submit joint comments. Comments 
related to this proceeding may be filed in paper format or 
electronically. However, the Commission strongly encourages electronic 
filings. Those filing electronically do not need to make a paper 
filing.
    Documents filed electronically via the Internet can be prepared in 
a variety of formats, including MS Word, Portable Document Format, Real 
Text Format, or ASCII format, as listed on the Commission's Web site at 
http://www.ferc.gov, under the e-Filing link. The e-Filing link 
provides instructions for how to Login and complete an electronic 
filing. First time users will have to establish a user name and

[[Page 47924]]

password. The Commission will send an automatic acknowledgement to the 
sender's e-mail address upon receipt of comments.
    For paper filings, the original and 14 copies of such comments 
should be submitted to the Office of the Secretary, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426.
    All comments will be placed in the Commission's public files and 
will be available for inspection in the Commission's Public Reference 
Room at 888 First Street, NE., Washington, DC 20426, during regular 
business hours. In addition, all comments may be viewed, printed, or 
downloaded remotely via the Internet through FERC's Homepage using the 
eLibrary link.

Conference Information

    As noted above, upon evaluation of the comments requested herein, 
the Commission will hold a technical conference open to all interested 
persons. The technical conference will be held on September 28, 2004, 
at 9:30 a.m. (e.s.t.) in the Commission Meeting Room at the Federal 
Energy Regulatory Commission, 888 First Street, NE., Washington, DC.
    There is no charge to attend the conference and no requirement to 
register in advance for the conference. The conference will be 
transcribed. Those interested in acquiring the transcript should 
contact Ace Reporters at (202) 347-3700 or (800) 336-6646. Transcripts 
will be placed in the public record ten days after the Commission 
receives them.
    Capitol Connection offers the opportunity for remote listening and 
viewing of the conference. It is available for a fee, live over the 
Internet, by phone or via satellite. Persons interested in receiving 
the broadcast or who need information on making arrangements should 
contact David Reininger or Julia Morelli at Capitol Connection at (703) 
993-3100 as soon as possible or visit the Capitol Connection Web site 
at http://www.capitolconnection.org and click on ``FERC.''
    Interested parties are urged to watch for further notices providing 
more information on the conference. You may register online at http://www.ferc.gov/docs-filing/esubscriptions.asp to be notified via email of 
new issuances and filings related to this docket. For additional 
information please contact John Kroeger at (202) 502-8177 or by e-mail 
at [email protected], or Thomas Pinkston at (202) 502-6335 or by e-
mail at [email protected].

    By direction of the Commission.
Linda Mitry,
Acting Secretary.
 [FR Doc. E4-1735 Filed 8-5-04; 8:45 am]
BILLING CODE 6717-01-P