Pipeline Posting Requirements Under Section 23 of the Natural Gas Act, 1116-1131 [E7-25435]
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Proposed Rules
Federal Register
Vol. 73, No. 4
Monday, January 7, 2008
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Part 284
[Docket No. RM08–2–000]
Pipeline Posting Requirements Under
Section 23 of the Natural Gas Act
December 21, 2007.
Federal Energy Regulatory
Commission.
ACTION: Notice of proposed rulemaking.
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AGENCY:
SUMMARY: In this Notice of Proposed
Rulemaking, the Commission proposes
to require both interstate and certain
major non-interstate pipelines to post
capacity, daily scheduled flow
information and daily actual flow
information. This proposal incorporates
one contained in an earlier Notice of
Proposed Rulemaking to require the
posting of capacity and daily actual flow
information by some intrastate
pipelines, with some changes. Under
this proposal, interstate pipelines would
be required to post daily actual flow
information in addition to their
currently required posting of capacity
and daily scheduling information. Noninterstate pipelines would be required
to post daily scheduled flow
information in addition to the earlier
Notice of Proposed Rulemaking
proposal to require posting capacity and
daily actual flow information. The
posting proposal would facilitate price
transparency in markets for the sale or
transportation of physical natural gas in
interstate commerce to implement
section 23 of the Natural Gas Act.
DATES: Comments are due February 21,
2008. Reply comments are due March
24, 2008.
ADDRESSES: You may submit comments,
identified by docket number by any of
the following methods:
• Agency Web Site: https://ferc.gov
Follow the instructions for submitting
comments via the eFiling link found in
the Comment Procedures section of the
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preamble. Documents created
electronically using word processing
software should be filed in native
applications or print-to-PDF format and
not in a scanned format.
• Mail/Hand Delivery: Commenters
unable to file comments electronically
must mail or hand deliver an original
and 14 copies of their comments to:
Federal Energy Regulatory Commission,
Secretary of the Commission, 888 First
Street, NE., Washington, DC 20426.
Please refer to the Comment Procedures
section of the preamble for additional
information on how to file paper
comments.
FOR FURTHER INFORMATION CONTACT:
Stephen J. Harvey (Technical), Office
of Enforcement, Federal Energy
Regulatory Commission, 888 First Street
NE., Washington, DC 20426, (202) 502–
6372, Stephen.Harvey@ferc.gov.
Charles Whitmore (Technical), Office
of Enforcement, Federal Energy
Regulatory Commission, 888 First Street
NE., Washington, DC 20426, (202) 502–
6256, Charles.Whitmore@ferc.gov.
Eric Ciccoretti (Legal), Office of
Enforcement, Federal Energy Regulatory
Commission, 888 First Street NE.,
Washington, DC 20426, (202) 502–8493,
Eric.Ciccoretti@ferc.gov.
SUPPLEMENTARY INFORMATION:
I. Introduction and Summary of
Proposal
1. On April 19, 2007, the Commission
issued a Notice of Proposed Rulemaking
(Initial NOPR) to implement section 23
of the Natural Gas Act, which was
added to the act by the Energy Policy
Act of 2005 (EPAct 2005).1 In the Initial
NOPR, the Commission proposed an
annual reporting requirement for certain
natural gas sellers and buyers and a
daily posting requirement for intrastate
pipelines.2 The Commission also asked
in the Initial NOPR whether posting
requirements for interstate pipeline
should be changed.3
2. Concurrently, the Commission is
issuing a Final Rule with respect to the
annual reporting requirement. With
respect to the pipeline posting proposal,
1 Transparency Provisions of Section 23 of the
Natural Gas Act, 72 FR 20791 (Apr. 26, 2007), FERC
Stats. and Regs. ¶ 32,614 (2007). Congress enacted
section 23 of the Natural Gas Act as part of the
Energy Policy Act of 2005. Energy Policy Act of
2005, Pub. L. No. 109–58, 119 Stat. 594 (2005).
2 Initial NOPR at P 1–2.
3 Initial NOPR at P 43.
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based on Staff experience as well as the
comments received, the Commission
has determined to issue the instant
notice of proposed rulemaking (NOPR)
to develop the record more fully with
respect to the posting proposal. The
Initial NOPR may not have given
sufficient notice to interstate pipelines
of changes that seem necessary to
implement adequately section 23 of the
Natural Gas Act. In addition, the
Commission believes that more
information regarding the technical
implementation of daily posting of
actual flow information by interstate
pipelines is required in order to
consider the costs and benefits of such
a regulatory change. For those purposes,
the Commission incorporates by
reference the Initial NOPR and all
comments filed in response to the Initial
NOPR in Docket No. RM07–10–000 with
respect to the pipeline posting proposal.
3. The Commission intends the
instant proposal to make available the
information needed to track daily flows
of natural gas adequately throughout the
United States. Specifically, the
Commission proposes to require both
interstate pipelines and major noninterstate pipelines 4 to post daily
information regarding their capacity,
scheduled flow volumes, and actual
flow volumes at major points and
mainline segments. The proposal would
result in both interstate and noninterstate pipelines posting the same
types of information.
4. For interstate pipelines, this
proposal would add to the existing
posting requirements in § 284.13(d) a
requirement to post daily actual flow
volume.5 To bring the requirements for
major non-interstate pipelines into
alignment with the existing and
proposed posting requirements for
interstate pipelines, this proposal adds
to the proposal in the Initial NOPR a
requirement that major non-interstate
pipelines post daily scheduled flow
volumes.6 For the purposes of this
NOPR, a ‘‘major non-interstate pipeline’’
is defined as one that is not a ‘‘natural
gas company’’ under section 1 of the
Natural Gas Act 7 and that flows greater
4 In the Initial NOPR, the Commission used the
term ‘‘intrastate pipeline;’’ herein, the Commission
uses the term ‘‘non-interstate pipeline’’—a point
explained further below.
5 Proposed 18 CFR 284.13(d).
6 Proposed 18 CFR 284.14(a).
7 15 U.S.C. 717.
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than 10 million (10,000,000) MMBtus of
natural gas per year, with two
exceptions.8 The first exception is noninterstate pipelines that fall entirely
upstream of a processing plant.9 The
second exception is non-interstate
pipelines that deliver more than ninetyfive percent (95%) of the natural gas
volumes they flow directly to endusers.10
5. With these proposed additions of
flow information from major noninterstate pipelines to the information
already available from interstate
pipelines, market observers, such as the
Commission, state commissions and
market participants, could develop a
better understanding of the supply and
demand conditions that directly affect
the U.S. wholesale natural gas markets.
Market participants would have a better
basis for evaluating the prices at which
they transact. Consequently, this
proposal to increase information from
non-interstate pipelines and from
interstate pipelines would directly
‘‘facilitate price transparency for the
sale * * * of physical natural gas in
interstate commerce’’ as authorized in
the natural gas transparency
provisions.11
6. The Commission’s proposal would
apply to major non-interstate pipelines
even though section 1 of the Natural Gas
Act 12 excludes them from the
Commission’s ratemaking authority
under sections 4 and 5 of the Natural
Gas Act 13 and the Commission’s
certificate authority under section 7 of
the Natural Gas Act.14 As discussed
below, Congress placed market
participants, which include noninterstate pipelines, within the
Commission’s transparency authority
under section 23 of the Natural Gas Act
to ensure ‘‘the dissemination, on a
timely basis, of information about the
availability and prices of natural gas
sold at wholesale and in interstate
commerce.’’ 15 Aware that the pre-EPAct
2005 limits on the Commission’s
authority would have left gaps in the
transparency of the wholesale, physical
natural gas markets, Congress did not
restrict the Commission’s transparency
authority to those same limits in
enacting section 23 of the Natural Gas
Act. As we stated in the Initial NOPR:
‘‘While distinctions between intrastate
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8 Proposed
18 CFR 284.1.
9 Proposed 18 CFR 284.14(b)(1).
10 Proposed 18 CFR 284.14(b)(2).
11 Section 23(a)(1) of the Natural Gas Act, 15
U.S.C. 717t–2(a)(1) (2000 & Supp. V 2005).
12 15 U.S.C. 717.
13 15 U.S.C. 717c; 15 U.S.C. 717d.
14 15 U.S.C. 717f.
15 Section 23(a)(2) of the Natural Gas Act, 15
U.S.C. 717t–2(a)(2) (2000 & Supp. V 2005).
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and interstate natural gas markets may
be meaningful from a legal perspective,
they are not meaningful from the
perspective of market price
formation.’’ 16 Congress was aware of the
legal distinctions between natural gas
markets in enacting EPAct 2005 and, in
choosing to use the term ‘‘any market
participant’’ indicated that these
distinctions should not apply to the
Commission’s transparency authority.
At the same time, by not amending
section 1 of the Natural Gas Act,
Congress retained the legal distinctions
between intrastate and interstate
pipelines for the purposes of delineating
the entities subject to the Commission’s
authority over ratemaking in sections 4
and 5 and over certification of
construction and sales of new facilities
and transportation services in section 7
of the act.
7. The Commission issues this NOPR
in order to solicit further comment on
requiring actual flow information from
both interstate and non-interstate
pipelines and to consider whether the
posting requirements for both interstate
and non-interstate pipelines should be
similar. In the Initial NOPR, the
Commission did not propose to require
the posting of actual flow information
by interstate pipelines, but it did seek
comment on such posting.17 Further
comment in response to the instant
NOPR will allow the Commission to
give more consideration to requiring
actual flow information on interstate
pipelines, in particular the technical
issues associated with quick posting of
that information. In addition, the
Commission seeks further comment
regarding how the posting requirements
should apply to storage facilities and
regarding its daily pipeline posting
proposal for major non-interstate
pipelines.
8. To address implementation issues
associated with the posting proposal,
such as obtaining and posting actual
flow information and obtaining and
posting information from storage
facilities, the Commission directs Staff
to conduct a technical conference before
comments on this NOPR are due.
II. The Commission’s Transparency
Authority Over Non-Interstate Pipelines
Under Section 23 of the Natural Gas
Act
9. At the outset, the Commission
addresses the jurisdictional issues
raised by its proposal in the Initial
NOPR. In the Initial NOPR, the
Commission explained how section 23
of the Natural Gas Act authorizes the
16 Initial
17 Initial
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NOPR at P 43.
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1117
Commission to require an intrastate
pipeline to post information regarding
its transportation of natural gas, even
though section 1 of the Natural Gas Act
excludes such companies from the
Commission’s authority to regulate
transportation of natural gas under
sections 4, 5, and 7 of the Natural Gas
Act.18
A. Comments
1. Comments: Section 23 of the Natural
Gas Act
10. The Texas Pipeline Association
(TPA) 19 argued that, contrary to the
Commission’s explanation, the plain
language of section 23 of the Natural
Gas Act shows that the term ‘‘market
participant’’ is limited to those entities
that participate in wholesale interstate
natural gas markets and does not
include intrastate pipelines.20 TPA
concluded that the plain language of
section 23 of the Natural Gas Act does
not support the Commission’s assertion
of authority to collect information from
intrastate pipelines because they do not
participate in markets for the sale or
transportation of natural gas in
interstate commerce.21
11. Enterprise Products Partners L.P.
(Enterprise) also asserted that an entity
must be participating in the interstate
market to be a ‘‘market participant’’
under section 23 of the Natural Gas Act.
Enterprise reasoned that an entity
subject to the Commission’s authority
under section 23 but not to its authority
under other sections of the Natural Gas
Act is an entity that ‘‘participat[es] in
the interstate market (whether by
buying, selling, shipping or trading
physical natural gas) but not already
subject to [Natural Gas Act] jurisdiction
as natural gas companies.’’ 22 According
to Enterprise, the Commission’s
proposal to impose posting
requirements on intrastate pipelines
bears no relation to Congress’s intention
to restrict the Commission’s jurisdiction
to entities participating in the interstate
market.23
12. Similarly, the Railroad
Commission of Texas argued that the
term ‘‘market participant’’ does not
indicate that Congress contemplated the
expansion of Commission authority to
18 Initial
NOPR at P 11–18, 21–24, & 37.
entities expressed support for the Texas
Pipeline Association’s comments: Atmos Energy
Corporation, Copano Energy, L.L.C., Crosstex
Energy Services, LP, DCP Midstream, LLC, Enbridge
Energy Co., Inc., Gas Processors Association, Kinder
Morgan Texas Intrastate Pipeline Group, Targa
Resources, Inc.
20 Comments of TPA at 16–17.
21 Id.
22 Comments of Enterprise at 13.
23 Id.
19 Eight
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include intrastate pipelines as asserted
by the Commission.24 The Railroad
Commission of Texas explained that
there is no reference at all in the
relevant statutory provisions or
legislative history of EPAct 2005 to
intrastate pipelines, the intrastate
natural gas market or intrastate gas
flows and no express indication that the
Commission’s authority was being
extended in any manner over
‘‘intrastate’’ market participants.25
13. One commenter, Enterprise,
contended that the Commission does
not have the authority to require posting
of information by intrastate pipelines
because Congress limited the
information that may be collected from
market participants to ‘‘information
about natural gas sold at wholesale and
in interstate commerce.’’ 26 Enterprise
interpreted Congress’s use of the word
‘‘about’’ as limiting language and
asserted that Congress deliberately
chose the word ‘‘about’’ as opposed to
‘‘affect’’ or ‘‘at least impacts’’ in order to
stress that the Commission does not
have the authority to compel reporting
for any activity that might have some
impact on the interstate wholesale
natural gas markets.27
2. Comments: Section 1(b) of the Natural
Gas Act
14. TPA argued that section 1(b) of the
Natural Gas Act precludes the
Commission from prescribing rules
under its section 23 authority that apply
to intrastate transportation or sale of
natural gas.28 TPA asserted that
Congress has consistently respected the
distinction between interstate and
intrastate pipelines which first appeared
in section 1(b) of the Natural Gas Act
and was recognized by Congress in
amendments to the Natural Gas Act and
in the Natural Gas Policy Act of 1978.29
TPA referred to numerous appellate
court decisions that recognized this
distinction in reviewing the
Commission’s jurisdiction.30
15. Several commenters argued that if
Congress intended the transparency
provisions to cover intrastate pipelines,
it would have amended section 1 of the
Natural Gas Act.31 TPA argued that if
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24 Comments
of Railroad Commission of Texas at
6–7; see also Comments of Atmos Pipeline-Texas at
6–7.
25 Comments of Railroad Commission of Texas at
7.
26 Comments of Enterprise Products Partners, L.P.
at 11 (emphasis in original).
27 Id. at 11–12.
28 Comments of TPA at 7; see also Comments of
Louisiana Office of Conservation at 5.
29 Comments of TPA at 9.
30 Id. at 11 (citations omitted).
31 Comments of TPA at 10–11; Comments of
Enterprise at 15; Comments of Louisiana Office of
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Congress intended to expand the
Commission’s authority over intrastate
transportation of natural gas, it would
have amended section 1(b) to include
new posting obligations for intrastate
pipelines for all daily flows and
capacity at major points.32 TPA
explained that, in EPAct 2005, Congress
amended section 1(b) of the Natural Gas
Act to include application to the
importation or exportation of natural gas
in foreign commerce and to persons
engaged in such importation or
exportation.33 TPA contended that
without a similar amendment to section
1(b) to provide for the posting of
information Congress cannot ‘‘cross the
jurisdictional line’’ by imposing a
posting requirement on intrastate
pipelines.34
3. Comments: Section 1(c) of the Natural
Gas Act
16. Several commenters, such as the
Railroad Commission of Texas, asserted
that the Commission’s proposal to
require intrastate pipelines to post
information impermissibly intrudes on
states’ regulation of natural gas
transportation.35 Cranberry Pipeline
Corporation argued that the Commission
cannot have jurisdiction over intrastate
transactions when those transactions are
already subject to the jurisdiction of the
state regulatory commission.36
Similarly, DCP argued that the
Commission ignored section 1(c) of the
Natural Gas Act which exempts
intrastate transportation because it is
viewed as a matter of local concern
subject to regulation by the states.37
4. Comments: Other
17. TPA argued that there is no
indication in the legislative history of
section 23 that Congress intended to
modify the Commission’s jurisdiction to
include intrastate transportation.38
Atmos Energy Corporation (Atmos) and
the Railroad Commission of Texas
similarly stated that there is no
reference at all in the relevant statutory
provisions or legislative history of
EPAct 2005 to intrastate pipelines, the
intrastate natural gas market or
Conservation at 5; Comments of Railroad
Commission of Texas at 6–7.
32 Comments of TPA at 10–11.
33 Id. (citing EPAct 2005 section 311 (amending
section 1(b) of the Natural Gas Act)).
34 Comments of TPA at 11.
35 Comments of Railroad Commission of Texas at
8–9; see also Reply Comments of the RRC of Texas
at 8; Reply Comments of the Texas Pipeline
Association at 12.
36 Comments of Cranberry Pipeline Corporation at
8 (internal citations omitted).
37 Comments of DCP Midstream, LLC at 7
(internal citations omitted).
38 Comments of TPA at 21.
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intrastate gas flows and certainly no
express indication that the FERC’s
authority was being extended in any
manner over ‘‘intrastate’’ market
participants.39
18. DCP Midstream, LLC argued that
intrastate pipelines should not be held
to the same reporting burden as
interstate pipelines because intrastate
pipelines have not submitted to the
jurisdiction of the Commission. The
burdens that an interstate pipeline
assumes, DCP contended, accompany a
certificate of public convenience and
necessity and should not be imposed on
an intrastate pipeline. DCP asserted that
the Commission’s policy historically has
been that only gas pipelines that
affirmatively accepted a jurisdictional
certificate to provide transportation in
interstate commerce would be subject to
Commission regulation, such as daily
scheduled volume or pipeline capacity
reporting.40
19. Atmos argued that the
Commission’s interpretation of Natural
Gas Act section 23 is inconsistent with
the Commission’s prior analysis of its
own jurisdiction in Order No. 670 41 and
Order No. 636.42 Atmos pointed to
Order No. 670, in which the
Commission interpreted the phrase ‘‘any
entity’’ from section 4A of the Natural
Gas Act to encompass any person or
form of organization, regardless of its
legal status, function or activities, and
further concluded that this language did
not specifically exclude entities engaged
in non-jurisdictional activities.43 Atmos
also described the Commission
interpreting the phrase ‘‘in connection
with’’ from section 4A so as to conclude
that not every common-law fraud that
touches a jurisdictional transaction
would constitute market
manipulation.44 According to Atmos, in
Order No. 670, the Commission further
determined, that had Congress intended
to expand the Commission’s jurisdiction
39 Comments of Atmos at 12 (internal citations
omitted); Comments of the Railroad Commission of
Texas at 6–7 (internal citations omitted).
40 Comments of DCP Midstream, LLC at 9–10.
41 Prohibition of Energy Market Manipulation,
Order No. 670, 71 FR 4244 (Jan. 26, 2006), FERC
Stats. & Regs. ¶ 31,202 (2006) (Order No. 670).
42 Pipeline Service Obligations and Revisions to
Regulations Governing Self-Implementing
Transportation; and Regulation of Natural Gas
Pipelines After Partial Wellhead Decontrol, Order
No. 636, 57 FR 13267 (Apr. 16, 1992), FERC Stats.
& Regs. ¶ 30,939 (1992), order on reh’g, Order No.
636–A, 57 FR 36128 (Aug. 12, 1992), FERC Stats.
& Regs. ¶ 30,950 (1992), order on reh’g, Order No.
636–B, 61 FERC ¶ 61,272 (1992), order on reh’g, 62
FERC ¶ 61,007 (1993), aff’d in part and remanded
in part sub nom, United Distribution Cos. v. FERC,
88 F.3d 1105 (D.C. Cir. 1996), order on remand,
Order No. 636–C, 78 FERC ¶ 61,186 (1997) (Order
No. 636).
43 Comments of Atmos at 9.
44 Id. at 9–10.
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so significantly as to give it antimanipulation authority over nonjurisdictional transactions such as first
sales of natural gas, sales of imported
natural gas, sales of imported liquefied
natural gas, or sales and transportation
by entities exempt from Commission
regulation under Natural Gas Act
section 1(b), then it would have done so
explicitly.45
20. As to Order No. 636, Atmos
argued that the Commission’s assertion
of transparency authority over intrastate
pipelines is contrary to its holdings in
that order, in which the Commission
held that a non-interstate pipeline
‘‘providing service under section 311 of
the [Natural Gas Policy Act of 1978] is
not required to meet the service
requirements of the Commission’s Order
No. 636 such as offering firm service,
having a capacity release program,
posting available capacity
electronically, offering flexible receipt
and delivery points, or unbundling
distinct services.’’ 46 By contrast, the
pipeline posting proposal, asserted
Atmos, would not only extend daily
posting requirements to section 311
transportation by intrastate pipelines,
but also to transportation that is purely
intrastate in nature.47
21. Some commenters, such as the
Railroad Commission of Texas,
expressed concern that a requirement
for intrastate pipelines to post
information would lead to further
regulation of those intrastate
pipelines.48
B. Discussion
22. The Commission proposes here to
require major non-interstate pipelines to
post information regarding capacity,
scheduled flow volumes, and actual
flow volumes.49 This proposal would
impose posting requirements on major
non-interstate pipelines in a limited
way. The Commission does not intend
to regulate the intrastate operations of
those non-interstate pipelines; nor do
we intend to regulate the rates or terms
and conditions of intrastate service for
those non-interstate pipelines. The
Commission proposes to require those
non-interstate pipelines only to post
information.
23. In the Initial NOPR, the
Commission used the term ‘‘intrastate
45 Id.
at 9 (internal citations omitted).
at 15 (emphasis in original).
47 Id. at 12 (internal citations omitted). Atmos
stated that it would not object if the Commission
limits the posting requirements applicable to
intrastate pipelines to section 311 transportation or
other activity regulated under the Natural Gas
Policy Act of 1978. Id.
48 Comments of the Railroad Commission of
Texas at 8–9.
49 Proposed 18 CFR 284.14(a).
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46 Id.
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pipeline.’’ In this proposal, the
Commission uses the term ‘‘noninterstate pipeline.’’ The latter term
more accurately describes the scope of
the proposed rule, which is issued
pursuant to section 23 of the Natural
Gas Act.50 This section applies to both
interstate and non-interstate pipelines, a
point explained further below, and does
not use the term ‘‘intrastate pipeline.’’
In this NOPR, the Commission proposes
to collect important information about
the physical, natural gas market from
certain pipelines in the continental
United States regardless of whether the
pipeline is an intrastate pipeline, a
Hinshaw pipeline, or any other type of
pipeline that is not an interstate
pipeline under the Natural Gas Act. The
subjects of the posting requirement
proposed herein are set by their
participation in the physical, natural gas
market not by their legal status under
section 1 of the Natural Gas Act.51
24. The proposed posting
requirements for non-interstate
pipelines are consistent with Congress’s
intent as expressed in section 23 of the
Natural Gas Act. There, Congress
permitted the Commission to impose on
a broad set of market participants
requirements for a limited purpose, i.e.,
to obtain and disseminate ‘‘information
about the availability and prices of
natural gas at wholesale and in
interstate commerce.’’ 52 At the same
time, as the Commission explicitly
acknowledges, Congress did not expand
the Commission’s authority to impose
on the same set of market participants
requirements related to the
Commission’s traditional regulatory
activities, e.g., ratemaking under
sections 4 and 5 of the Natural Gas Act
and certification of construction and
sales and transportation services under
section 7 of the Natural Gas Act.
25. Congress placed non-interstate
pipelines within the Commission’s
transparency authority under section 23
of the Natural Gas Act in order to
ensure—for the entirety of the
wholesale, physical natural gas
market—transparency of price and
availability, including transparency of
market price formation. Aware that the
pre-EPAct 2005 limits on the
Commission’s authority would have left
gaps in the transparency of the
wholesale, physical natural gas markets,
Congress did not restrict the
Commission’s transparency authority to
those same limits in enacting section 23
of the Natural Gas Act. As we stated in
the Initial NOPR, ‘‘While distinctions
between intrastate and interstate
markets may be meaningful from a legal
perspective, they are not meaningful
from the perspective of market price
formation.’’ 53 Congress was aware of the
legal distinctions between non-interstate
and interstate natural gas markets in
enacting EPAct 2005. In choosing to use
the term ‘‘any market participant’’ and
focusing section 23 on ‘‘information
about the availability and prices of
natural gas at wholesale and in
interstate commerce,’’ Congress
indicated that these distinctions should
not apply to the Commission’s
transparency authority. At the same
time, by not amending section 1,
Congress retained the legal distinctions
between intrastate and interstate
markets for the purposes of delineating
the entities subject to the Commission’s
authority over ratemaking in sections 4
and 5 and over construction of natural
gas facilities in section 7 of the Natural
Gas Act.
1. Discussion: Section 23 of the Natural
Gas Act
26. The language in section 23 of the
Natural Gas Act supports the
Commission’s authority to require noninterstate pipelines to post information
about capacity, scheduled flow volumes
and actual flow volumes. In section
23(a)(1), Congress directed the
Commission to ‘‘facilitate price
transparency in markets for the sale or
transportation of physical natural gas in
interstate commerce * * *.’’ 54 In
section 23(a)(2), Congress authorized the
Commission to ‘‘provide for the
dissemination, on a timely basis, of
information about the availability and
prices of natural gas sold at wholesale
and in interstate commerce * * *.’’ 55
Congress expressly delegated to the
Commission the task of adopting rules
to give life to this provision 56 and, in
section 23(a)(3), provided that the
Commission may ‘‘obtain the
information’’ about the availability and
prices of natural gas sold at wholesale
and in interstate commerce from ‘‘any
market participant.’’ 57
27. Congress could have limited the
Commission’s transparency authority to
obtaining information from any ‘‘natural
gas company’’ subject to the
Commission’s traditional regulatory
authority. It did not do so. Instead, in
using the broad new term ‘‘any market
participant,’’ Congress deliberately
53 Initial
50 15
U.S.C. 717t–2 (2000 & Supp. V 2005).
51 15 U.S.C. 717.
52 Section 23(a)(2) of the Natural Gas Act, 15
U.S.C. 717t–2(a)(2) (2000 & Supp. V 2005).
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1119
NOPR at P 20.
U.S.C. 717t–2(a)(1) (2000 & Supp. V 2005).
55 15 U.S.C. 717t–2(a)(2) (2000 & Supp. V 2005).
56 Id.
57 15 U.S.C. 717t–2(a)(3) (2000 & Supp. V 2005).
54 15
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expanded the universe subject to the
Commission’s transparency authority
beyond ‘‘natural gas compan[ies].’’ 58
The term ‘‘any market participant’’ is
not defined in the Natural Gas Act;
however, it is not on its face limited to
entities made subject to the Natural Gas
Act under section 1.59 Indeed, the
language of section 23 indicates that
entities excluded from the
Commission’s authority under section 1
of the Natural Gas Act would be
included in section 23. First, in section
23, Congress did not reference the
limitations of section 1 explicitly
(discussed further below).
Second, in section 23, Congress did
not use the term ‘‘natural gas company’’
from section 2(6), which is defined as ‘‘a
person engaged in the transportation of
natural gas in interstate commerce, or
the sale in interstate commerce of such
gas for resale.’’ 60 This limiting term is
used in section 1 of the Natural Gas Act
to limit the Commission’s authority, for
instance, under sections 4, 5, and 7 of
the Natural Gas Act.61 These approaches
would have been the simplest ways for
Congress to have indicated an intent to
limit the Commission’s transparency
authority in the same manner it limited
the Commission’s comprehensive
regulatory authority in other sections of
the Natural Gas Act. Thus, commenters’
arguments that the Commission has
authority to obtain information only
from those subject to the Commission’s
authority under section 1 of the Natural
Gas Act are inconsistent with the
language of the statute.
28. In granting the Commission broad
authority to obtain information, the
Congress not only used the new term
‘‘market participant’’ but it also
specifically referred to ‘‘any’’ market
participant, instead of limiting the
Commission’s authority to obtain
information from market participants
subject to the Commission’s traditional
Natural Gas Act jurisdiction. The word
‘‘any’’ gives the term it modifies (in this
case, ‘‘market participant’’) an
expansive meaning.62
58 Contrary to the assertions of Bridgeline
Holdings, L.P. (Bridgeline), Comments of Bridgeline
at 6, this grant of transparency authority is not an
implied grant.
59 Initial NOPR at P 12.
60 15 U.S.C. 717a(6).
61 15 U.S.C. 717c, 717d & 717f.
62 Norfolk S. Rwy. Co. v. Kirby, 543 U.S. 14, 31–
32 (2004) (the word ‘‘any’’ gives the word it
modifies an expansive reading); Department of
Housing and Urban Dev. v. Rucker, 535 U.S. 125,
130–31 (2002); TRW Inc. v. Andrews, 534 U.S. 19,
31 (2001) (one must give effect to each word in a
statute so that none is rendered superfluous);
United States v. Gonzales, 520 U.S. 1, 5 (1997)
(‘‘any’’ is an expansive term, meaning ‘‘one or some
indiscriminately of whatever kind,’’); New York v.
EPA, 443 F.3d 880, 885–87 (D.C. Cir. 2006) (the
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29. In addition, in section 23(d)(2),
Congress created a de minimis
exception to the other provisions in
section 23. Specifically, Congress
instructed the Commission to create a
de minimis exception for gatherers and
producers, which section 1(b) of the
Natural Gas Act explicitly excludes
from Commission’s traditional
regulation. If, as some commenters
asserted, Congress did not intend to give
the Commission authority over any
entity excluded by section 1(b) of the
Natural Gas Act, a de minimis exception
would have been unnecessary; in other
words, section 23(d)(2) would have been
surplusage. Congress is not presumed to
enact surplus language.63 To avoid this
improper result, the Commission
interprets section 23 of the Natural Gas
Act to give effect to the de minimis
language by interpreting the term ‘‘any
market participant’’ to include those
entities otherwise excluded from the
Commission’s Natural Gas Act
jurisdiction by section 1(b) of the act.
30. The Commission disagrees that
the term ‘‘about’’ in section 23 is a
limiting term as asserted by Enterprise.
In the Initial NOPR, the Commission
described the information proposed to
be collected from intrastate pipelines as
information ‘‘about’’ interstate,
wholesale natural gas markets because
the flows on intrastate pipelines affect
interstate, wholesale natural gas
markets.64 The Commission used the
term ‘‘pertains’’ as a synonym for
‘‘about.’’ Indeed, contrary to Enterprise’s
reading, we read the term ‘‘about’’ as
broader than the terms ‘‘affect’’ or
‘‘impacts.’’ Information may be ‘‘about’’
a subject without ‘‘affecting’’ it; hence,
flow information may be ‘‘about natural
gas sold at wholesale and in interstate
commerce’’ even if it does not ‘‘affect’’
such natural gas (even though it
normally does).
31. More specifically, as explained
below, the information that would be
posted by major non-interstate pipelines
is ‘‘information about the availability
and prices of natural gas sold at
wholesale and in interstate
commerce.’’ 65 There is a relationship
between capacity and flow information
on non-interstate pipelines and the
interstate, natural gas market because
word ‘‘any’’ is broadly construed to reflect
Congress’ intent that all types of physical changes
are subject to the Clean Air Act’s New Source
Review program).
63 City of Roseville v. Norton, 348 F.3d 1020, 1028
(D.C. Cir. 2003) (citing Babbitt v. Sweet Home
Chapter of Community for a Great Oregon, 515 U.S.
687, 698 (1995)).
64 Initial NOPR at P 15.
65 Section 23(a)(2) of the Natural Gas Act, 15
U.S.C. 717t–2(a)(2) (2000 & Supp. V 2005).
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non-interstate flows affect the supply
and demand fundamentals that underlie
the market. As explained below, posted
flow information from only interstate
pipelines cannot provide a complete
picture of natural gas flows in the
United States—or even of those flows
directly relevant to the pricing of
natural gas flowing in interstate
commerce.66 To avoid such
incompleteness, the Commission sets
forth the proposal to require major noninterstate pipelines to post flow
information. This proposal would
provide a complete picture of natural
gas supply and demand fundamentals
without the gaps that would appear
were the non-interstate pipelines
excluded by section 1 of the Natural Gas
Act also excluded by section 23 of the
Natural Gas Act. In enacting section 23
of the Natural Gas Act, Congress sought
to avoid any such gaps in the
transparency of the physical natural gas
markets by avoiding the legal
distinctions set forth in section 1 of the
Natural Gas Act.
2. Discussion: Section 1(b) of the
Natural Gas Act
32. The Commission disagrees with
commenters who argued that section
1(b) of the Natural Gas Act precludes
the Commission from imposing the
daily posting requirement on intrastate
pipelines. Section 1(b) of the Natural
Gas Act provides that the ‘‘provisions of
this chapter * * * shall apply to the
transportation of natural gas in
interstate commerce, to the sale in
interstate commerce of natural gas for
resale * * *’’ and that such provisions
‘‘shall not apply to any other
transportation or sale of natural gas.’’ 67
These arguments ignore the fact that, in
section 23, Congress provided the
Commission a new and broad grant of
authority that goes beyond prior
Commission jurisdiction over natural
gas companies to facilitate transparency
in the wholesale natural gas markets.
33. In stating that the Commission
may obtain information from ‘‘any
market participant,’’ 68 Congress
contemplated that the transparency
provisions would differ from other
provisions of the Natural Gas Act as to
the entities covered by the
Commission’s authority. Commenters’
reliance on section 1 of the Natural Gas
Act, therefore, improperly ignores the
intent of Congress to subject a different
set of entities to the Commission’s
66 See
below at P 50–59.
1(b) of the Natural Gas Act, 15 U.S.C.
67 Section
717(b).
68 Section 23(a)(3) of the Natural Gas Act, 15
U.S.C. 717t–2(a)(3) (2000 & Supp. V 2005).
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transparency authority as evidenced by
Congress’s use of the term ‘‘any market
participant.’’ In light of this intent,
commenters’ reliance on case law
setting forth the limits on the
Commission’s authority under section 1
of the Natural Gas Act is misplaced.
34. The Commission does not find
persuasive the argument that Congress
could have expressed its intent to
subject intrastate pipelines to the
Commission’s transparency authority
only by amending section 1 of the
Natural Gas Act. First, altering the
exceptions in section 1, as commenters
suggested, is not the only way to alter
the statute to give the Commission
transparency authority. Indeed, it would
have been more cumbersome for the
Congress to take that approach. Instead
of that approach, the Commission
interprets the addition of section 23 as
providing the Commission transparency
authority over non-interstate pipelines.
This latter interpretation is the more
reasonable interpretation of section 23
and reflects Congress’s intent to subject
non-interstate pipelines to only the
Commission’s transparency authority.
Second, it could be stated equally that
if Congress intended to exclude
intrastate (or non-interstate) pipelines
from the Commission’s authority under
section 23 of the Natural Gas Act, it
would have used the term ‘‘natural gas
company’’ in section 23, instead of the
term ‘‘any market participant.’’
35. Commenters’ arguments that
section 23 should be interpreted
consistent with pre-EPAct 2005 case law
are likewise misplaced. Those cases
apply the jurisdictional limits set forth
in section 1 of the Natural Gas Act.
These arguments run afoul of the
principle of statutory construction that
‘‘Congress is presumed to be aware of an
administrative or judicial interpretation
of a statute.’’ 69 Thus, Congress was
presumably aware that prior to the
enactment of section 23, the Natural Gas
Act, as explained by TPA, ‘‘limit[ed] the
gathering of intrastate data to gathering
it from companies falling under the
Commission’s jurisdiction.’’ 70 In using
the term ‘‘any market participant,’’
Congress signaled its intent to expand
the Commission’s transparency
authority beyond the universe of natural
69Lorillard v. Pons, 434 U.S. 575, 580 (1978)
(internal citations omitted); accord 2A Norman J.
Singer, Sutherland Statutory Construction sec.
45.12 (5th ed. 1992) (‘‘legislative language will be
interpreted on the assumption that the legislature
was aware of * * * judicial decisions’’).
70 Comments of Texas Pipeline Association at 13
(citing Union Oil v. FPC, 542 F.2d 1036, 1039 (9th
Cir. 1976)).
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gas companies to which it would
otherwise be limited.71
3. Discussion: Section 1(c) of the
Natural Gas Act
36. Several commenters, including a
state commission, contended that the
pipeline posting proposal as applied to
intrastate pipelines would improperly
interfere with states’ regulation of
intrastate pipelines as set forth in
section 1(c) of the Natural Gas Act,
commonly known as the Hinshaw
amendment. Section 1(c) of the Natural
Gas Act reads:
The provisions of this chapter shall not
apply to any person engaged in or legally
authorized to engage in the transportation in
interstate commerce or the sale in interstate
commerce for resale, of natural gas received
by such person from another person within
or at the boundary of a State if all the natural
gas so received is ultimately consumed
within such State, or to any facilities used by
such person for such transportation or sale,
provided that the rates and service of such
person and facilities be subject to regulation
by a State commission.72
The Commission’s proposal does not
impermissibly interfere with states’
regulation of Hinshaw pipelines. Under
the Commission’s proposal, states will
continue to regulate the rates and
services of those companies. As stated,
section 23 of the Natural Gas Act does
not authorize the Commission to
undertake such comprehensive
regulation and the Commission does not
propose to do so. The Commission
would require only that non-interstate
pipelines, including Hinshaw pipelines,
post information regarding their flows.
Section 1(c) of the Natural Gas Act, in
light of the later enacted EPAct 2005,
does not preclude such a posting
requirement.
4. Discussion: Other
37. The Commission disagrees with
DCP’s argument that the burden of a
posting requirement is related to the
Commission’s grant of a certificate of
convenience and necessity under
section 7 of the Natural Gas Act. DCP’s
argument ignores the mandate Congress
set forth in the transparency provisions
for the Commission to facilitate
transparency. Nothing in section 23
indicates or even implies that the
71 TPA observed that courts have held that the
Commission cannot exceed its statutory authority.
Reply Comments of TPA at 16–17 (citing
Transmission Agency of Northern California v.
FERC, 495 F.3d 663 (D.C. Cir. 2007) and United
Distribution Cos. v. FERC, 88 F.3d 1105 (D.C. Cir.
1996)). This is an unremarkable and unassailable
conclusion, but one that provides no guidance
where the issue is not whether the Commission may
exceed its statutory authority but what is the extent
of the Commission’s transparency authority.
72 15 U.S.C. 717(c).
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1121
Commission’s transparency authority
depends on whether a market
participant has a certificate of public
convenience and necessity. Indeed, the
use of the modifier ‘‘any,’’ as discussed
above, demonstrates that Congress had
no intention to limit the Commission
authority to disseminate adequate
information about the natural gas
market.
38. Contrary to commenters’
assertions, the Commission’s
interpretation of section 23 is consistent
with the Commission’s interpretation of
section 4A of the Natural Gas Act,
which Congress also enacted in EPAct
2005. In Order No. 670, the Commission
stated that Congress chose the
undefined term ‘‘any entity’’ in section
4A as a broader term than the existing
defined term of ‘‘natural gas
company.’’ 73 Similarly, in interpreting
section 23, Congress chose the
undefined term ‘‘any market
participant’’ in section 23 as a broader
term than the existing defined term
‘‘natural gas company.’’ Also, in Order
No. 670, to determine the transactions
subject to the Commission’s market
manipulation authority, the
Commission interpreted the section 4A
phrase ‘‘in connection with’’ broadly.74
To delineate what type of information
the Commission could obtain and
disseminate, in section 23 of the Natural
Gas Act, Congress used the term
‘‘about,’’ which is a concept similarly as
broad as the concept described by the
phrase ‘‘in connection with.’’
39. The Commission’s interpretation
of section 23 is also consistent with its
holdings in Order No. 636.75 As
described in subsequent orders, the
Commission has not ‘‘requir[ed]
intrastate pipelines to introduce all the
73 Order
No. 670 at P 18.
4A of the Natural Gas Act reads:
It shall be unlawful for any entity, directly or
indirectly, to use or employ, in connection with the
purchase or sale of natural gas or the purchase or
sale of transportation services subject to the
jurisdiction of the Commission, any manipulative
or deceptive device or contrivance * * * in
contravention of [Commission] rules and
regulations.
15 U.S.C. 717t–2c–1 (2000 & Supp. V 2005). In
Order No. 670, the Commission observed that the
Supreme Court interpreted the phrase ‘‘in
connection with’’ broadly in interpreting section
10(b) of the Securities Exchange Act. As noted in
that order, section 4A ‘‘closely track[s] the
prohibited conduct language in section 10(b) of the
Securities Exchange Act of 1934, Securities
Exchange Act of 1934, 15 U.S.C. 78j(b), and
specifically dictate[s] that the terms ‘manipulative
or deceptive device or contrivance’ ’’ are to be used
‘‘as those terms are used in section 10(b) of the
Securities Exchange Act of 1934.’’ Order No. 670 at
P 6.
75 See, e.g., Order No. 636, FERC Stats. & Regs.
¶ 30,939, at 30,406 (permitting, but not requiring
intrastate pipelines, to offer open-access, contract
storage).
74 Section
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features of open-access service that we
have required of interstate pipelines’’
because requiring intrastate pipelines to
do so ‘‘could make it unduly
burdensome to participate in interstate
markets, contrary to the intent of the
[Natural Gas Policy Act of 1978].’’ 76
Here, the Commission proposes to
impose only a posting burden on noninterstate pipelines that is equivalent to
the posting requirements of interstate
pipelines. In other respects, the burden
on non-interstate pipelines remains far
less than that on interstate pipelines in
keeping with the Natural Gas Policy Act
of 1978. While in the past, the
Commission exempted intrastate
pipelines from open-access
requirements, such as electronic
bulletin boards,77 any change in that
exemption would be justified in order to
further the Commission’s transparency
goals as set forth in section 23 of the
Natural Gas Act.
40. Finally, the Commission
recognizes commenters’ concern that
the Commission’s proposal could
appear to lead to further regulation. As
explained above, however, the
Commission’s transparency authority
over non-interstate pipelines is limited
to obtaining and disseminating
information. The Commission has no
interest in comprehensive regulation of
non-interstate pipelines. The
Commission reiterates, section 1 of the
Natural Gas Act continues to exclude
non-interstate pipelines from such
comprehensive regulation.78
jlentini on PROD1PC65 with PROPOSALS
III. Interstate Pipeline Posting
Requirements
41. In the Initial NOPR, the
Commission sought comment on
whether it should revise its posting
requirements applicable to interstate
pipelines to require posting actual flow
information.79 The Commission raised
the question because we proposed to
require intrastate pipelines to post
actual flow information, a requirement
beyond that applied to interstate
pipelines under § 284.13(d)(1) of the
Commission’s regulations, and because
posting of actual flow information could
provide useful information regarding
actual capacity use, for instance, by
giving insight into the use of no-notice
service.80 In this regard, Commission
Staff observed that its ability to monitor
76 EPGT Texas Pipeline, L.P., 99 FERC ¶ 61,295,
at 62,252 (2002).
77 Order No. 636–B, 61 FERC ¶ 61,272, at 61,992,
n.26.
78 15 U.S.C. 717.
79 Initial NOPR at P 43.
80 Initial NOPR at P 43.
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flows in the interstate pipeline system is
limited in certain locations, by the lack
of actual flow information. In the case
of ‘‘no-notice’’ service,81 specifically,
interstate pipeline schedules do not
reflect actual flows. Consequently,
information about interstate flows in
areas using no-notice service is less
useful. In its comments on the Initial
NOPR, the Natural Gas Supply
Association (NGSA) observed that, ‘‘[o]n
heating season peak days or days with
wide intra-day weather swings, nonotice volumes can be significant;
therefore, scheduled flow volumes are
not a proxy for physical flow and, thus,
do not necessarily provide an accurate
picture of underlying market
fundamentals.’’ 82 Similarly,
Commission Staff observed that the gap
between scheduled and actual flows
occurs most commonly in the northern
tier of the country, particularly where a
pipeline serves a local distribution
company with significant space heating
demand. In such circumstances, market
observers find it more difficult to
ascribe price behavior to physical
changes in flows.
42. Public posting of information
reflecting no-notice service could also
prevent other forms of misconduct with
direct effects on natural gas in interstate
commerce. Commission investigations
of interstate and intrastate pipeline
activity resulted in two settlements in
which the settling party admitted it
sought to obtain and exploit non-public
storage inventory information to gain a
competitive advantage in wholesale gas
markets.83 Though this proposal would
make public flow information, not
storage information, the importance of
the non-public information is
analogous. These admissions indicate
that the lack of public flow information
provides the opportunity for parties to
engage in manipulative or unduly
discriminatory behavior. By making
major non-interstate pipeline flow
information public, such transparency
could discourage market participants
from engaging in such manipulative or
unduly discriminatory activity.
43. In this NOPR, the Commission
proposes to require interstate pipelines
to post actual flow information in
addition to the capacity and scheduled
flow information that interstate
81 See
18 CFR 284.7(a)(4).
Comments at 10.
83 Dominion Resources, Inc., 108 FERC ¶ 61,110
(2004) (Dominion Resources, DTI and DEC admit
that DTI violated section 161.3(f) of the
Commission’s regulations, former 18 CFR 161.3(f)
(2003)); The Williams Companies, Inc., 111 FERC
¶ 61,392 (2005) (Transco admits that it violated
section 161.3(f) of the Commission’s regulations,
former 18 CFR 161.3(f) (2002)).
pipelines are currently required to post.
Accordingly, the Commission proposes
adding to § 284.13(d) this requirement:
‘‘An interstate pipeline must also
provide in the same manner [as other
information is provided] access to
information on actual flowing volumes
at receipt points, on the mainline, at
delivery points, and in storage fields.’’ 84
44. In response to the Initial NOPR,
several commenters supported requiring
interstate pipelines to post actual flow
volumes.85 The NGSA asserted that
posting of actual flow data ‘‘could lead
to even more accurate and near realtime indication of underlying market
supply and demand fundamentals’’ 86
The National Association of Royalty
Owners (NARO) contended that
requiring interstate pipelines to post
actual flow volumes would allow an
‘‘apples to apples’’ comparison with the
postings of intrastate pipelines.87
45. The Interstate Natural Gas
Association of America (INGAA)
opposed any proposal for interstate
pipelines to post actual flows. INGAA
contended that: (1) Scheduled flows are
adequate for market participants to
estimate demand and supply conditions
in order to price market transactions; (2)
actual flows include operational data
that is not relevant and may be
counterproductive, such as flows
reflecting maintenance activities,
storage injection and withdrawal
schedules, line pack management,
balancing at interconnects, and blending
to meet quality specifications not
related to commercial flows and (3) the
no-notice activity that would be
captured by posting actual flows does
not reflect trading activity, but rather
reflects storage withdrawals.88 Williston
Basin Interstate Pipeline Company
(Williston) indicated that scheduled
flow volumes were adequate and actual
volumes not necessary.89
46. In order to effectively balance the
benefits of the additional flow
information with the costs of such a
requirement, the Commission seeks
further information regarding both the
benefits of the additional information
available if actual flow volumes were
posted by interstate pipelines, and the
costs imposed on interstate pipelines to
develop and post that information. In
providing comments on this proposal,
the Commission encourages
82 NGSA
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84 Proposed
85 See,
18 CFR 284.13(d).
e.g., NGSA at 10; and Apache Corp. at
8–9.
86 NGSA
Comments at 10.
Comments at 4.
88 INGAA Comments at 3–4.
89 Williston Reply Comments at 4.
87 NARO
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commenters to support their comments
by providing specific examples.
47. Regarding benefits, is information
lost by not providing actual flows? What
is the extent of any such lost
information? How extensive is the use
of no-notice service? Is information
regarding operational flows, such as
flows reflecting maintenance activities,
storage injection and withdrawal
schedules, line pack management,
balancing at interconnects, and blending
to meet quality specifications, useful to
understand supply and demand
fundamentals? Does the no-notice
activity that would be captured by
posting actual flows reflect trading
activity or does it reflect storage
withdrawals? Can trading activity and
storage withdrawals be considered as
separate activities? How?
48. Regarding costs, how is actual
flow information collected today for
operational, balancing, billing or other
purposes? What process changes, if any,
would be required for interstate
pipelines to post actual flow
information? How much time after flow
would be required before such
information would be available for
posting? Would posting actual volumes
reveal any information that might be
harmful to any competitive interests?
How could it be harmful?
jlentini on PROD1PC65 with PROPOSALS
IV. Postings by Non-Interstate Pipelines
49. In the Initial NOPR, the
Commission proposed to require certain
intrastate pipelines to post daily
information regarding the capacity and
actual flows at major receipt and
delivery points and mainline segments.
In the instant NOPR, the Commission
proposes to require non-interstate
pipelines to post scheduled flow
information in addition to capacity and
actual flow information.90 Only a
‘‘major non-interstate pipeline’’ would
be required to post information. For the
purposes of this NOPR, a ‘‘major noninterstate pipeline’’ is defined as one
that is not a ‘‘natural gas company’’
under section 1 of the Natural Gas Act
and that flows greater than 10 billion
cubic feet of natural gas per year, with
two exceptions.91 The first exception is
non-interstate pipelines that fall entirely
upstream of a processing plant.92 The
second exception is non-interstate
pipelines that deliver more than ninetyfive percent (95%) of the natural gas
volumes they flow directly to endusers.93
90 Proposed
18 CFR 284.14(a).
18 CFR 284.1.
92 Proposed 18 CFR 284.14(b)(1).
93 Proposed 18 CFR 284.14(b)(2).
91 Proposed
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A. Rationale
50. Through the information that
would be obtained from the daily
posting requirement on major noninterstate pipelines, the Commission,
market participants, and the public
could obtain a picture of daily supply
and demand conditions that directly
affect U.S. wholesale natural gas
markets—a picture that is currently
incomplete without information from
major non-interstate pipelines.94
Consequently, this proposal to increase
information from certain major noninterstate pipelines would directly
‘‘facilitate price transparency for the
sale * * * of physical natural gas in
interstate commerce’’ as authorized in
the natural gas transparency
provisions.95
51. The posted information from
major non-interstate pipelines would
qualify as, in the words of the
transparency provisions, ‘‘information
about the availability and prices of
natural gas sold at wholesale and in
interstate commerce.’’ 96
Notwithstanding their status under
section 1 of the Natural Gas Act, most
major non-interstate pipelines today
transport or buy and sell wholesale
natural gas that eventually enters or at
least impacts the interstate natural gas
market. Further, supply and demand in
non-interstate markets have a direct
effect on prices of gas destined for
interstate markets because both
intrastate and interstate consumers draw
on the same sources of supply. This is
the case because of the statutory,
regulatory and market changes that have
taken place in the last three decades.
52. In the Natural Gas Policy Act of
1978, Congress allowed an intrastate
pipeline to transport natural gas in
interstate commerce on behalf of any
interstate pipeline or local distribution
company served by an interstate
pipeline, without losing its intrastate
status.97 Congress likewise permitted an
intrastate pipeline to sell natural gas to
any interstate pipeline or any local
distribution company served by any
interstate pipeline, without losing its
intrastate status.98 In addition, at the
same time that the Commission issued
94 In this section, the Commission reiterates its
discussion from the Initial NOPR.
95 Section 23(a)(1) of the Natural Gas Act, 15
U.S.C. 717t–2(a)(1) (2000 & Supp. V 2005).
96 Section 23(a)(2) of the Natural Gas Act, 15
U.S.C.A. 717t–2(a)(2) (2000 & Supp. V 2005).
97 See section 311(a)(2) of the Natural Gas Policy
Act of 1978, 15 U.S.C. 3371(a)(2); see also 18 CFR
part 284, subpart C (Certain Transportation by
Intrastate Pipelines).
98 See section 311(b) of the Natural Gas Policy Act
of 1978, 15 U.S.C. 3371(b); see also 18 CFR part 284,
subpart D (Certain Sales by Intrastate Pipelines).
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1123
Order No. 636 in 1992, it promulgated
a new subpart of Part 284 (revised
several times in the past 15 years) that
provides blanket authority to any person
who is not an interstate pipeline
(including intrastate pipelines) to make
sales for resale of natural gas in
interstate commerce.99 This
authorization is a limited jurisdiction
sales certificate, which means that the
holder does not become subject to the
panoply of Natural Gas Act regulation
by exercising its rights under the
certificate.100
53. The market understandably
reacted to these statutory and regulatory
changes since 1978. As relevant here,
natural gas sold at or destined to be sold
at wholesale in the interstate market is
frequently exchanged or the transactions
consummated at market hubs where
interstate and non-interstate pipelines
interconnect (e.g., Waha, Katy, Houston
Ship Channel, and Carthage in Texas
and at Henry Hub in Louisiana). Prices
formed at these hubs are, in effect,
prices for wholesale transactions in
interstate commerce, even if a portion of
the gas priced at each market hub is
consumed intrastate. In addition,
transfer of natural gas can take place
directly between parties who ship gas
on both interstate and non-interstate
pipelines at any pipeline
interconnection.
54. Currently, through the availability
of information regarding daily
scheduled flows of natural gas through
interstate pipelines, market participants
have an increased, daily understanding
of natural gas markets, including
regional conditions and the pipeline
capacity available to resolve different
geographic supply/demand balances.
This is due in part to Order No. 637,
where the Commission required posting
of capacity and scheduled volume
information on interstate pipelines with
the direct intention of allowing shippers
to monitor capacity availability.101
Accordingly, interstate pipelines must
99 Order No. 636 FERC Stats. & Regs. ¶ 30,939, at
30,391.
100 See 18 CFR part 284, subpart L (Certain Sales
for Resale by Non-interstate Pipelines).
101 Regulation of Short-Term Natural Gas
Transportation Services, and Regulation of
Interstate Natural Gas Transportation Services,
Order No. 637, 65 FR 10156, at 10204–10205, (Feb.
25, 2000), FERC Stats. & Regs. ¶ 31,091, at 31,320–
31,321 (2000); order on reh’g, Order No. 637–A, 65
FR 35706 (June 5, 2000), FERC Stats. & Regs.
¶ 31,099 (2000); order on reh’g, Order No. 637–B,
65 FR 47284 (Aug. 2, 2000), affirmed in relevant
part, Interstate Natural Gas Ass’n of America v.
FERC, 285 F.3d 18 (D.C. Cir. 2002), order on
remand, 101 FERC ¶ 61,127 (2002), order on reh’g,
106 FERC ¶ 61,088 (2004), aff’d sub nom.,
American Gas Ass’n v. FERC, 428 F.3d 255 (D.C.
Cir. 2005) (Order No. 637).
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post available capacity information,
specifically:
The availability of capacity at receipt
points, on the mainline, at delivery points,
and in storage fields, whether the capacity is
available directly from the pipeline or
through capacity release, the total design
capacity of each point or segment on the
system; the amount scheduled at each point
or segment whenever capacity is scheduled,
and all planned and actual service outages or
reductions in service capacity.102
In Order No. 637, the Commission
anticipated that such postings would
provide useful information regarding
supply and demand fundamentals: The
changes to the Commission’s reporting
requirements will enhance the
reliability of information about capacity
availability and price that shippers need
to make informed decisions in a
competitive market as well as improve
shippers’ and the Commission’s ability
to monitor marketplace behavior to
detect, and remedy anticompetitive
behavior.103
55. Today, interested market
participants as well as commercial
vendors retrieve this information from
the Web sites of interstate pipelines to
obtain schedule information that is then
used to estimate a variety of supply and
demand conditions including
geographic and industrial sector
consumption, storage injections and
withdrawals and regional production in
almost real-time.104 Market participants
have come to rely on this information to
help price transactions. Commission
Staff has also come to rely on this
information to perform its oversight and
enforcement functions. In fact, market
observers believe that posting of this
information contributes to market
transparency by revealing the
underlying volumetric (or availability)
drivers behind price movements.105
56. Notwithstanding the contribution
of posted interstate schedule
information to the transparency of price
and availability of natural gas, this
information cannot provide a complete
picture of natural gas flows in the
United States—or even those flows
directly relevant to the pricing of
natural gas flowing in interstate
commerce. Several major U.S. natural
gas pricing points sit at the confluence
of multiple interstate and non-interstate
pipelines. A recent study by the U.S.
Department of Energy’s Energy
Information Administration (EIA)
identified twenty-eight national market
centers or pricing hubs, of which
thirteen are served by a combination of
interstate and non-interstate
pipelines.106 The table below shows the
capacity of interstate and non-interstate
pipelines connected to each of these
thirteen hubs.
TABLE 1.—INTER- AND INTRASTATE PIPELINE DELIVERY CAPACITY AT SELECTED U.S. NATURAL GAS PRICING POINTS
Receipt and delivery
capacity
Hub name
State
Carthage ..........................................................................................................................................................
Henry Hub ........................................................................................................................................................
Katy—Enstor ....................................................................................................................................................
Katy—DEFS .....................................................................................................................................................
Mid Continent ...................................................................................................................................................
Moss Bluff ........................................................................................................................................................
Nautilus ............................................................................................................................................................
Perryville ..........................................................................................................................................................
Aqua Dulce ......................................................................................................................................................
Waha—Lone Star ............................................................................................................................................
Waha—Encina .................................................................................................................................................
Waha—El Paso ...............................................................................................................................................
Waha—DEFS ..................................................................................................................................................
TX
LA
TX
TX
KS
TX
LA
LA
TX
TX
TX
TX
TX
Interstate
pipelines
(MMcfd)
1,120
2,770
1,370
260
1,112
1,050
1,200
3,652
855
810
525
1,165
300
Non-interstate
pipelines
(MMcfd)
1,355
1,215
3,815
2,360
627
1,800
1,350
350
835
1,140
800
1,660
1,850
Source: Unpublished Energy Information Administration update to March 2005 of information presented in Natural Gas Market Centers and
Hubs: A 2003 Update, October 2003.
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57. Many of these pricing points are
closely connected to other regions of the
United States, influencing prices across
102 18
CFR 284.13(d).
No. 637, 65 FR at 10169.
104 See, e.g., Comments of Bentek Energy, LLC.,
Docket No. AD06–11–000 (filed Oct. 10, 2006).
103 Order
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the country. The figure below shows the
location and flow patterns of natural gas
moving between interstate and non-
interstate markets through several of
these pricing points.
105 See, e.g., Comments of Platt’s, at 11–13,
Docket No. AD06–11–000 (information regarding
the supply and demand of natural gas explains
prices and such information is available from
interstate pipelines, but not intrastate pipelines).
106 Department Of Energy, Energy Information
Administration, Natural Gas Market Centers And
Hubs: A 2003 Update, Oct. 2003, https://
www.eia.doe.gov/pub/ oil_gas/natural_gas/
feature_articles/2003/market_hubs/mkthubs03.pdf
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58. One pricing point directly
connected to both interstate and noninterstate pipelines is Henry Hub,
Louisiana, the location for delivery of
natural gas under the New York
Mercantile Exchange’s (NYMEX) futures
contract. Monthly settlement of
NYMEX’s Henry Hub natural gas future
contract has become important in
determining a variety of monthly index
prices used to set natural gas prices in
a variety of transactions, some in
interstate commerce, particularly along
the East Coast and Gulf Coast of the
United States. The nature of this
influence is detailed in Commission
Staff’s 2006 State of the Markets
Report.107
59. Further, purchasers of natural gas
in interstate commerce draw on the
same sources of supply as users and
buyers of natural gas in intrastate
commerce. For example, much of the
recent Barnett Shale development in the
107 Federal
Energy Regulatory Commission, 2006
State of the Markets Report at 48–50 (Jan. 2007),
https://www.ferc.gov/market-oversight/marketoversight.asp (follow link to the State of the Markets
Full Report).
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Fort Worth basin flows into intrastate
systems before moving into interstate
markets. In total, slightly more than
forty percent of total on-shore
production in Texas is connected to
interstate pipelines, less than sixty
percent in Louisiana and less than
eighty percent in Oklahoma.108 Though
daily volume flowing from noninterstate into interstate pipelines can
be estimated, the supply dynamics that
make these volumes available cannot.
60. The daily posting of flow
information by major non-interstate
pipelines would provide several
benefits to the functioning of natural gas
markets in ways that would protect the
integrity of physical, interstate natural
gas markets, protect fair competition in
those markets and consequently serve
the public interest by better protecting
consumers. First, by providing a more
complete picture of supply and demand
fundamentals, these postings would
108 Bentek Energy, LLC analysis of supply
scheduled into interstate pipelines compared with
EIA data from its table Natural Gas Gross
Withdrawals and Production for Texas and
Oklahoma available at https://tonto.eia.doe.gov/
dnav/ng/ng_prod_sum_dcu_NUS_m.htm.
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1125
improve market participants’ ability to
assess supply and demand and to price
physical natural gas transactions.
Second, during periods when the U.S.
natural gas delivery system is disturbed,
for instance due to hurricane damage to
facilities in the Gulf of Mexico, these
postings would provide market
participants a clearer view of the effects
on infrastructure, the industry, and the
economy as a whole. Finallly, these
postings would allow the Commission
and other market observers to identify
and remedy potentially manipulative
activity. we discuss each of these points
in turn.
61. First, the proposed daily capacity
and volume postings by major noninterstate pipelines would improve
market participants’ ability to assess
supply and demand and price physical
natural gas transactions by providing a
more complete picture of supply and
demand fundamentals.109 As discussed
109 See, e.g., Comments of Platt’s at 11, Docket No.
AD06–11–000 (filed Nov. 1, 2006) (explaining that,
to understand prices, ‘‘the marketplace must look
to * * * information on [the] availability of and
demand for natural gas * * *’’).
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above and noted in comments filed in
these proceedings, interstate pipeline
information does not provide a
complete picture of the supply and
demand fundamentals that apply to
interstate commerce because much of
the natural gas in the U.S. is moved
through the non-interstate pipeline
system.110
62. Second, the proposed daily noninterstate pipeline capacity and volume
postings would provide market
participants—and the Commission in its
market oversight efforts—a clearer view
of the effects on infrastructure, the
industry, and the economy as a whole
during periods when the U.S. natural
gas delivery system is disturbed. For
example, after landfall of hurricanes
Katrina and Rita in late 2005, even the
most interested of governmental and
commercial market observers were not
able to obtain complete information
regarding the output by potentiallydamaged production facilities.111 By
monitoring receipt and delivery points
for production facilities on interstate
pipelines, market observers were able to
obtain only a limited sense of
production facility output.112 Similarly,
market participants, state commissions
and other market observers were unable
to assess effects on natural gas
consumption in the Gulf Coast,
including consumption by the
petrochemical industry, for some
period. The significance and duration of
these effects on this industry—
vulnerable to energy price and
availability disruptions—remain
unclear. This proposal would allow
interested governmental and private
parties to gain a much better picture of
disruptions in natural gas flows in the
case of future hurricanes in the Gulf
region.113
110 See Comments of Platt’s at 13, Docket No.
AD06–11–000 (filed Nov. 1, 2006) (stating that
much of the fundaamental supply and demand data
is missing from natural gas markets and advocating
for reporting by intrastate pipelines).
111 See, e.g., Comments of Public Service
Commission of New York (NYPSC) at 2; Comments
of Bentek Energy LLC at 15–16 21–22; Comments
of APGA at 3–4; Comments of NARO at 2;
Transcript of the Oct. 13, 2006 Technical
Conference (Tr.), at 25, Transparency Provisions of
the Energy Policy Act of 2005, Docket No. AD06–
11–000 (Comments of Sheila Rappazzo, Chief of
Policy Section of the Office of Gas and Water of the
New York State Department of Public Service).
112 Tr. 25 (Comments of Sheila Rappazzo)
(describing how after the 2005 hurricanes data
availability differed widely).
113 Along these lines, this proposal is consistent
with a recent Commission final rule and a proposed
survey by EIA. On August 23, 2006, the
Commission revised its reporting regulations to
require jurisdictional natural gas companies to
report damage to facilities due to a natural disaster
or terrorist activity that results in a reduction in
pipeline throughput or storage deliverability.
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63. Third, the proposed daily noninterstate pipeline capacity and volume
postings would allow the Commission
and other market observers to identify
and remedy potentially manipulative
activity more actively by tracking price
movement in the context of natural gas
flows.114 In particular, information
regarding availability on non-interstate
pipelines could be used to track
manipulative or unduly discriminatory
behavior intended to cause harm to
consumers by distorting market prices
in interstate commerce. For example,
Commission Staff overseeing markets
routinely check for unused interstate
pipeline capacity between
geographically distinct markets with
substantially different prices as a sign
that flows may be managed to
manipulate prices. Given the
importance of non-interstate pipeline
connections to thirteen major pricing
hubs, including Henry Hub, as
discussed above, the lack of flow
information on non-interstate pipelines
hinders the Commission’s market
oversight and enforcement efforts.
64. This benefit comports with EPAct
2005, in which Congress directed the
Commission to facilitate price
transparency in physical, interstate
natural gas markets ‘‘with due regard for
the public interest, the integrity of those
markets, fair competition, and the
protection of consumers.’’ 115 By this
language, Congress intended that the
improvement of Commission market
oversight activities is a legitimate
justification for proposing rules under
the natural gas transparency provisions.
Monitoring and preventing
manipulative or unduly discriminatory
activity would meet the Commission’s
responsibility for ensuring the integrity
of the physical interstate natural gas
markets. The proposal to make noninterstate pipeline information available
to the public would assist the
Commission in fulfilling that
responsibility.
Revision of Regulations to Require Reporting of
Damage to Natural Gas Pipeline Facilities, Order
No. 682, 71 FR 51098 (Aug. 29, 2006), FERC Stats.
and Regs. ¶ 31,227 (2006), order on reh’g, 118 FERC
¶ 61,118 (2007). On January 30, 2007, EIA proposed
to survey natural gas processing plants ‘‘to monitor
their operational status and assess operations of
processing plants during a period when natural gas
supplies are disrupted.’’ Agency Information
Collection Activities, 72 FR 4248 (Jan. 30, 2007).
The purpose of the survey would be to ‘‘inform the
public, industry, and the government about the
status of supply and delivery activities in the area
affected by the disruption.’’ Id.
114 See Comments of NGSA at 8–10.
115 Section 23(a)(1) of the Natural Gas Act, 15
U.S.C. 717t–2(a)(1) (2000 & Supp. V 2005).
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B. Revisions to the Proposal Set Forth in
the Initial NOPR
65. The Commission has developed a
more particular definition of the types
of non-interstate pipelines that would
be required to post. The Commission is
not interested in burdening smaller noninterstate pipelines like gathering
systems, or individual consumers to
post daily information regarding
capacity, scheduled flow volumes, and
actual flow volumes at major points and
mainline segments. Consequently, the
Commission has altered its proposal
from the initial NOPR that used the term
‘‘intrastate pipeline’’ to the current
proposal which defines ‘‘major noninterstate pipeline’’ to capture directly
U.S. wholesale natural gas
transportation systems of significant
size and contribution to overall
wholesale gas flows across the United
States. The Commission seeks comment
on this proposal. In providing
comments, again, the Commission
encourages commenters to support their
comments by providing specific
examples.
66. The Commission also proposes to
limit the daily posting requirement by
limiting the definition of ‘‘major noninterstate pipeline’’ based on whether
the non-interstate pipeline flows more
than 10 million MMBtus of natural gas
per year. The intention is to focus on
non-interstate pipelines of significant
size and that consequently make a
significant contribution to wholesale
U.S. natural gas flows. Too low a limit
would pick up non-interstate pipelines
too small to contribute to wholesale
market flows of natural gas. Too high a
limit would lose information about
flows that affect wholesale pricing,
either directly by losing information at
major hubs, or less directly by missing
important components of wholesale
demand or supply not attached to
interstate pipelines. By way of contrast,
Platts reports that total reporting for its
next-month indices at all geographical
locations across the country over the
past 12 months (November 2006
through October 2007) totaled only a
little more than 8 billion cubic feet last
year.116 Thus, by rough comparison,
movements of that size on a pipeline
could easily affect wholesale prices in
any particular location. According to
EIA statistics from its 2005 Form 176
filings by companies that do business (at
least in part) as intrastate pipelines, the
10 million MMBtu threshold would
116 As reported on the natural gas.org
informational Web site, maintained by the Natural
Gas Supply Association, https://www.naturalgas.org/
business/marketactivity.asp (as of November 29,
2007).
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capture 102 pipelines.117 The number of
these non-interstate pipelines qualifying
as major non-interstate pipelines
required to post information would be
further reduced by the other criteria,
such as excluding non-interstate
pipelines that fall entirely upstream of
processing plants and those that deliver
more than ninety-five percent (95%) of
the natural gas volumes they flow
directly to end-users.
67. The Commission seeks comment
on these criteria. For the volume
criterion, are average flows of 10 billion
cubic feet of natural gas per year too low
a threshold for non-interstate pipelines
to require posting at major points and
mainline segments? Too high?
68. The Commission would exempt
from the daily posting requirement two
types of non-interstate pipelines that
meet the volume criterion. First, a major
non-interstate pipeline that lies entirely
upstream of a processing plant would be
exempt.118 The Commission seeks
comment on its proposed exemption of
a non-interstate pipeline that lies
entirely upstream of processing plants.
If these non-interstate pipelines were
excluded from the pipeline posting
requirement, would significant
information useful for determining price
and availability of natural gas likely be
lost?
69. Second, the Commission proposes
to exempt any major non-interstate
pipeline that makes greater than ninetyfive percent (95%) of its deliveries
directly to end-users. The Commission
seeks comment on this exemption.119 If
these non-interstate pipelines were
excluded from the pipeline posting
requirement, would significant
information useful for determining price
and availability of natural gas likely be
lost? Overall, are there any other
categories of major non-interstate
pipelines that should be exempt from
the daily posting requirements?
70. The comments on the Initial
NOPR inform the Commission’s revised
proposal to limit posting to major noninterstate pipelines. In its comments on
the Initial NOPR, affiliates Agave Energy
Corp. and Yates Petroleum Corp.
(Agave-Yates) urged the Commission to
limit the requirement for daily posting
of flow data to those intrastate pipelines
with receipt or delivery points
connected to the 13 major market hubs
served by both interstate and intrastate
pipelines.120 Bentek Energy LLC
117 See Comments of Bentek Energy, LLC,
Attachment A, Docket Nos. RM07–10–000 and
AD06–11–000 (filed Aug. 21, 2006).
118 Proposed 18 CFR 284.214(b)(1).
119 Proposed 18 CFR 284.214(b)(2).
120 Comments of Agave-Yates at 9–10; Reply
Comments of Agave-Yates at 1–2.
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(Bentek) proposed determining on a
case by case basis which intrastate
pipelines should post.121 As for this
approach, Bentek observed that it
‘‘would solve the issue of small regional
pipelines being too small to meet a
threshold applied nationally, but would
require considerable analysis by the
Commission to implement [including]
ongoing analysis as pricing points
change periodically.’’ 122 The
Commission seeks further comment on
which non-interstate pipelines should
be subject to the daily posting proposal.
71. The Commission seeks comment
on whether this proposal would meet
the three purposes discussed above.
Specifically, would the proposal: (1)
Provide a more complete picture of
supply and demand fundamentals and
improve market participants’ ability to
assess supply and demand and to price
physical natural gas transactions; (2)
provide, during periods when the U.S.
natural gas delivery system is disturbed,
for instance due to hurricane damage to
facilities in the Gulf of Mexico, a clearer
view of the effects on infrastructure, the
industry, and the economy as a whole;
and (3) allow the Commission and other
market observers to identify and remedy
potentially manipulative activity? 123
Alternatively, would these three
purposes be met if the Commission
limited the pipeline posting proposal to
those non-interstate pipelines with
receipt or delivery points connected to
the 13 major market hubs served by both
interstate and intrastate pipelines?
72. In the Initial NOPR, the
Commission sought comment on how to
define ‘‘major’’ receipt and delivery
points and mainline segments on
intrastate pipelines for the purpose of
any posting requirement. Developing an
operational definition of ‘‘major’’ receipt
and delivery points and mainline
segments on major non-interstate
pipelines is crucial to making the
proposal work effectively and
reasonably. The Commission stated that
it ‘‘does not wish to include extremely
small points connected to one or a few
customers, which it would consider
burdensome and possibly even anticompetitive in certain cases.’’ 124
73. Commenters provided suggestions
for which receipt and delivery points on
non-interstate pipelines should be
subject to the posting requirement. The
NARO commented that it would like to
see as many points posted as possible
explaining that more than ninety
percent of flows in Texas occur in
pipelines that move more than 5,000
MMBtu/day.125 The Texas Alliance of
Energy Producers (Texas Alliance) said
that the definition of ‘‘major points’’
should capture flows at locations used
to establish market prices (i.e., index
points), with the definition crafted to
capture enough points to reduce the
opportunity for market manipulation.126
The Petroleum Association of Wyoming
(PAW) said the definition of ‘‘major
points’’ should be limited to those on
interstate pipelines.127 Copano Energy
LLC, in its reply comments, said that (at
most) the posting requirement should
apply to major market hubs and centers
identified by the Energy Information
Administration and other current
market hubs or centers for which a daily
price is published by a nationally
recognized industry publication.128
Crosstex Energy Services stated that the
Commission should, at most, require the
posting of available capacity and
scheduled flow volumes (not actual
flow information) at receipt and
delivery points (not segments) at the 13
major interstate/intrastate pricing hubs
identified in the NOPR as directly
affecting interstate pricing.129 The
Kinder Morgan Texas Intrastate Pipeline
Group (Kinder Morgan) stated that
posting of scheduled quantities at major
hub points where index prices are
published would be less burdensome
than the NOPR proposal.130
74. Comments on the Initial NOPR on
how to define ‘‘major’’ receipt and
delivery points and mainline segments,
in many cases, focused less on
developing effective operational
definitions than they did on
jurisdictional and burden issues. The
goal of the pipeline posting proposal is
to allow the development of a more
complete and more immediate picture
of wholesale natural gas flows across the
United States, regardless of the
traditional regulatory authority under
which a particular pipeline operates, at
a reasonable cost. To accomplish this
task, the Commission needs to develop
a stronger record about the possible
measurement points on major noninterstate pipelines that could
contribute valuable information at a
reasonable trade-off with costs of
implementation. Consequently, the
Commission seeks further comment on
which points should be posted by major
non-interstate pipelines. In order to
effectively balance the benefits of a
125 NARO
Comments at 2–3.
Alliance Comments at 12.
127 PAW Comments at 2.
128 Copano Reply Comments at 3.
129 Crosstex Reply Comments at 8.
130 Kinder Morgan Reply Comments at 12.
126 Texas
121 Reply
Comments of Bentek Energy LLC at 6.
Comments of Bentek Energy LLC at 6.
123 See, supra, at P 61–64.
124 Initial NOPR at P 39.
122 Reply
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better understanding of national natural
gas flows based on more detailed flow
information against the costs of the
equipment and systems necessary to
deliver that information, the
Commission seeks comment regarding
how to determine the points at which it
should require posting of flow
information. Again, the Commission
encourages commenters to support their
assertions with specific examples.
75. In particular, related to Kinder
Morgan’s comments, could sufficient
information be developed with posting
only of flows in and out of major
pipeline hubs? In that case, how should
those hubs be determined? Should they
be limited only to those hubs for which
index prices are produced? By looking
only at flows into and out of major
pipeline hubs for which index prices are
produced, would market participants
lose information important to the
assessment of national supply and
demand balances lost? What other
criteria could be used to make the
determination of points to be posted? Is
a volumetric limit sufficient? If a line
sees flows in both directions during the
day, is a net directional flow for the day
valuable, or confusing?
jlentini on PROD1PC65 with PROPOSALS
V. Storage Information and Non-Public
Postings
76. Prompted by comments of storage
providers in response to the Initial
NOPR, the Commission seeks comment
on how its posting proposal herein
would affect storage providers. By way
of background, in its comments, Enstor
Operating Company (Enstor), an
independent gas storage service
provider with market-based rates, said it
should not be required to post
information regarding scheduled flows
because gas storage information is
readily available.131 If required to post
information, the Commission should
provide for non-public reporting and
analysis of flow data and disseminate
such information to the public only in
aggregated form.132 Enstor stated that if
its flow information were public, it
would lose negotiating strength in the
marketplace because its customers with
multiple service options would know
storage capacity available at its facility,
even though it would have no
knowledge of such customers’ needs
and limited knowledge about capacity
levels at competing, regulated storage
facilities.133 Enstor cautioned that
release of flow data from individual
storage facilities would lead to the
practice of reading other market
participants’ movements and buying or
selling in front of anticipated future
movements to take advantage of
resulting price swings, which would
raise prices.134 Without non-public
treatment of its flow data, Enstor
contended that its margins would be
squeezed and it would make less
money.135 Enstor added that aggregated
information disseminated by the
Commission would be more useful to
end-users than disaggregated data.136
77. In order to assess the concerns
expressed by Enstor (notably the only
storage provider to raise this concern),
the Commission seeks comments on the
following questions. Regarding flows of
gas in the United States, does existing
gas storage information provide the
same value of the information that
would be collected in the Commission’s
proposal? Interested commenters should
compare the benefits of requiring
storage providers to post flow
information publicly with the benefits
and costs of providing information to
the public only in aggregated form.
Those who address this issue should
address whether non-public reporting to
the Commission would support the
goals of the natural gas transparency
provisions to ‘‘facilitate price
transparency for the sale * * * of
physical natural gas in interstate
commerce’’? 137 Further, commenters
addressing the application of the
pipeline posting proposal to storage
facility should answer the following
questions: Can individual storage
facilities lose negotiating strength when
its customers know the supply of
available storage capacity? Would
release of flow data from individual
storage facilities lead to increased
prices? How many storage facilities
would likely face this situation if
required to post flow information?
Would fewer storage facilities face this
situation if the pipeline posting
proposal were modified to reduce the
number of points to be posted, for
example, by limiting posting to lines
running into or out of major pipeline
hubs?
VI. Information Collection Statement
78. The Office of Management and
Budget (OMB) regulations require it to
134 Reply
131 Comments
of Enstor at 4.
132 Comments of Enstor at 9.
133 Comments of Enstor at 8; Reply Comments of
Enstor at 5.
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Comments of Enstor at 6.
Comments of Enstor at 8.
136 Reply Comments of Enstor at 10.
137 Section 23(a)(1) of the Natural Gas Act, 15
U.S.C. 717t–2(a)(1) (2000 & Supp. V 2005).
135 Reply
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approve certain reporting and
recordkeeping (information collection)
requirements imposed by an agency.138
In this NOPR, the Commission makes
two proposals that would require the
posting or collection of information, one
for interstate and one for major noninterstate pipelines.139 The Commission
is submitting notification of these
proposed information collection
requirements to OMB for its review and
approval under section 3507(d) of the
Paperwork Reduction Act of 1995.140
79. One proposal, to require interstate
pipelines to post actual flow
information, would impose an
additional information collection
burden on interstate pipelines. The
other proposal, to require major noninterstate pipelines to post actual flow
information, would impose an
additional information collection
burden on major non-interstate
pipelines. Interstate and major noninterstate pipelines already collect flow
information for major receipt and
delivery points. Certain non-interstate
pipelines have asserted in the Initial
NOPR that costs would be quite high if
additional equipment was needed to
meet quick posting deadlines. However,
given that this information is used in
their business within fairly quick
periods, the Commission still believes
that the burden that would be imposed
by this proposed requirement is largely
for the collection and posting of this
information in the required format.141
80. OMB regulations require OMB to
approve certain information collection
requirements imposed by agency rule.
The Commission is submitting
notification of this proposed rule to
OMB.
Public Reporting Burden:
The start-up and annual burden
estimates for complying with this
proposed rule are as follows:
138 5
CFR 1320.11.
OMB regulations cover both the collection
of information and the posting of information. 5
CFR 1320.3(c). Thus, the proposal to post
information would create an information collection
burden.
140 44 U.S.C. 3507(d).
141 See 5 CFR 1320.3(b)(2) (‘‘The time, effort, and
financial resources necessary to comply with a
collection of information that would be incurred by
persons in the normal course of their activities (e.g.,
in compiling and maintaining business records)
will be excluded from the ‘‘burden’’ if the agency
demonstrates that the reporting, recordkeeping, or
disclosure activities needed to comply are usual
and customary.’’)
139 The
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Estimated
start-up burden per respondent
(hours)
Number of respondents 142
Number of
daily postings
per respondent
Estimated annual burden
hours per respondent
Part 284 FERC–551
Major Non-Interstate Pipeline Postings ...............................
Additional Interstate Pipeline Postings ................................
102
109
365
365
365
365
37,230
39,785
2,080
520
Total ..............................................................................
211
........................
........................
77,015
........................
Data collection
The total annual hours for collection
(including recordkeeping) for all
respondents is estimated to be 77,015
hours.
Information Posting Costs: The
average annualized cost for each
respondent is projected to be the
following (savings in parenthesis):
Annualized
capital/startup
costs
(10 year
amortization)
FERC–551
Major Non-Interstate Pipeline Postings .......................................................................................
Additional Interstate Pipeline Postings ........................................................................................
jlentini on PROD1PC65 with PROPOSALS
Title: FERC–551.
Action: Proposed Information Posting
and Information Filing.
OMB Control No: 1902–0243.
Respondents: Business or other for
profit.
Frequency of Responses: Daily posting
requirements and annual filing
requirements.
Necessity of the Information: The
daily posting of additional flow
information by interstate and major noninterstate pipelines is necessary to
provide information regarding the price
and availability of natural gas to market
participants, state commissions, the
FERC and the public. The posting
would contribute to market
transparency by aiding the
understanding of the volumetric/
availability drivers behind price
movements; it would provide a better
picture of disruptions in natural gas
flows in the case of disturbances to the
pipeline system; and it would allow the
monitoring of potentially manipulative
or unduly discriminatory activity.
Internal Review: The Commission has
reviewed the requirements pertaining to
natural gas pipelines and determined
they are necessary to provide price and
availability information regarding the
sale of natural gas in interstate markets.
81. These requirements conform to
the Commission’s plan for efficient
information collection, communication,
and management within the natural gas
industry. The Commission has assured
itself, by means of internal review, that
there is specific, objective support for
the burden estimates associated with the
information posting requirements. The
Commission seeks comment on these
estimates.
82. Interested persons may obtain
information on the reporting
requirements by contacting: Federal
Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426,
[Attention: Michael Miller, Office of the
Chief Information Officer], phone: (202)
502–8415, fax: (202) 208–2425, e-mail:
Michael.Miller@ferc.gov. Comments on
the requirements of the proposed rule
also may be sent to the Office of
Information and Regulatory Affairs,
Office of Management and Budget,
Washington, DC 20503, [Attention: Desk
Officer for the Federal Energy
Regulatory Commission].
83. Comments on the requirements of
the proposed rule may also be sent to
the Office of Information and Regulatory
Affairs, Office of Management and
Budget, Washington, DC 20503
[Attention: Desk Officer for the Federal
142 The Commission estimated the number of
respondents for major non-interstate pipelines from
EIA information. See Department of Energy, Energy
Information Administration, U.S. Intrastate Natural
Gas Pipeline Systems, https://www.eia.doe.gov/pub/
oil_gas/natural_gas/analysis_publications/
ngpipeline/PIPEintra.xls. The Commission
estimated the number of respondents that would be
interstate pipelines also from EIA information. See
Department of Energy, Energy Information
Administration, Thirty Largest U.S. Interstate
Natural Gas Pipeline Systems, 2005, https://
www.eia.doe.gov/pub/oil_gas/natural_gas/
analysis_publications/ngpipeline/
MajorInterstatesTable.html (Listing thirty largest
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Fmt 4702
Sfmt 4702
Total annual
hours for all
respondents
$20,800
5,200
Annual costs
Annualized
costs total
$36,500
36,500
$57,300
41,700
Energy Regulatory Commission]
(202)395–4650 or
oira_submission@omb.eop.gov.
VII. Environmental Analysis
84. The Commission is required to
prepare an Environmental Assessment
or an Environmental Impact Statement
for any action that may have a
significant adverse effect on the human
environment.143 The actions taken here
fall within categorical exclusions in the
Commission’s regulations for
information gathering, analysis, and
dissemination, and for sales, exchange,
and transportation of natural gas that
require no construction of
facilities.144 Therefore, an
environmental assessment is
unnecessary and has not been prepared
in this rulemaking.
VIII. Regulatory Flexibility Act
85. The Regulatory Flexibility Act of
1980 (RFA) 145 generally requires a
description and analysis of final rules
that will have significant economic
impact on a substantial number of small
entities. The RFA requires consideration
of regulatory alternatives that
accomplish the stated objectives of a
proposed rule and that minimize any
significant economic impact on such
entities. The RFA does not, however,
interstate pipelines and referencing seventy-nine
other interstate pipelines).
143 Order No. 486, Regulations Implementing the
National Environmental Policy Act, 52 FR 47897
(Dec. 17, 1987), FERC Stats. & Regs., Regulations
Preambles 1986–1990 ¶ 30,783 (1987).
144 18 CFR 380.4(a)(5) and (a)(27).
145 5 U.S.C. 601–612.
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mandate any particular outcome in a
rulemaking. At a minimum, agencies are
to consider the following alternatives:
establishment of different compliance or
reporting requirements for small entities
or timetables that take into account the
resources available to small entities;
clarification, consolidation, or
simplification of compliance and
reporting requirements for small
entities; use of performance rather than
design standards; and exemption for
certain or all small entities from
coverage of the rule, in whole or in part.
The proposal to require daily postings
by interstate and non-interstate
pipelines will not impact small entities.
Natural gas pipelines are classified
under NAICS code, 486210, Pipeline
Transportation of Natural Gas.146 A
natural gas pipeline is considered a
small entity for the purposes of the
Regulatory Flexibility Act if its average
annual receipts are less than $6.5
million.147 The Commission does not
believe that any pipeline that would be
required to post under the proposal in
this NOPR has receipts less than $6.5
million. Thus, the daily posting
proposal will not impact small entities.
jlentini on PROD1PC65 with PROPOSALS
IX. Comment Procedures
86. The Commission incorporates by
reference the comments filed in Docket
No. RM07–10–000 into the instant
docket and will consider them in this
proceeding. In addition, the
Commission invites interested persons
to submit comments on the matters and
issues proposed in this notice to be
adopted, including any related matters
or alternative proposals that
commenters may wish to discuss.
Comments are due February 21, 2008.
Reply comments are due March 24,
2008. Comments must refer to Docket
No. RM08–2–000, and must include the
commenter’s name, the organization
they represent, if applicable, and their
address in their comments. Comments
may be filed either in electronic or
paper format.
87. Comments may be filed
electronically via the eFiling link on the
Commission’s Web site at https://
www.ferc.gov. The Commission accepts
most standard word processing formats.
Documents created electronically using
word processing software should be
146 This industry comprises establishments
primarily engaged in the pipeline transportation of
natural gas from processing plants to local
distribution systems. 2002 North American Industry
Classification System (NAICS) Definitions, https://
www.census.gov/epcd/naics02/def/ND486210.HTM.
147 See U.S. Small Business Administration,
Table of Small Business Size Standards, https://
www.sba.gov/idc/groups/public/documents/
sba_homepage/serv_sstd_tablepdf.pdf (effective
July 31, 2006).
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18:51 Jan 04, 2008
Jkt 214001
filed in native applications or print-toPDF format and not in a scanned format.
Commenters filing electronically do not
need to make a paper filing.
Commenters that are not able to file
comments electronically must send an
original and 14 copies of their
comments to: Federal Energy Regulatory
Commission, Secretary of the
Commission, 888 First Street, NE.,
Washington, DC 20426.
88. All comments will be placed in
the Commission’s public files and may
be viewed, printed, or downloaded
remotely as described in the Document
Availability section below. Commenters
on this proposal are not required to
serve copies of their comments on other
commenters.
PART 284—CERTAIN SALES AND
TRANSPORTATION OF NATURAL GAS
UNDER THE NATURAL GAS POLICY
ACT OF 1978 AND RELATED
AUTHORITIES
1. The authority citation for part 284
continues to read as follows:
Authority: 15 U.S.C. 717–717w, 3301–
3432; 42 U.S.C. 7101–7352; 43 U.S.C. 1331–
1356.
2. In § 284.1, paragraph (d) is added
to read as follows:
§ 284.1
Definitions.
*
*
*
*
(d) Major non-interstate pipeline
means a pipeline that fits the following
criteria:
(1) It is not a ‘‘natural gas company’’
under section 1 of the Natural Gas Act;
X. Document Availability
and
(2) It flows annually more than 10
89. In addition to publishing the full
million (10,000,000) MMBtus of natural
text of this document in the Federal
gas measured in average receipts or in
Register, the Commission provides all
deliveries for the past 3 years.
interested persons an opportunity to
3. In § 284.13, the heading of
view and/or print the contents of this
paragraph (d) is revised and two
document via the Internet through
FERC’s Home Page (https://www.ferc.gov) sentences are added to the end of
paragraph (d)(1) to read as follows:
and in FERC’s Public Reference Room
during normal business hours (8:30 a.m.
§ 284.13 Reporting requirements for
to 5 p.m. Eastern time) at 888 First
interstate pipelines.
Street, NE., Room 2A, Washington, DC
*
*
*
*
*
20426.
(d) Capacity and flow information. (1)
90. From FERC’s Home Page on the
* * * An interstate pipeline must also
Internet, this information is available on provide in the same manner access to
eLibrary. The full text of this document
information on actual flowing volumes
is available on eLibrary in PDF and
at receipt points, on the mainline, at
Microsoft Word format for viewing,
delivery points, and in storage fields.
printing, and/or downloading. To access This information must be posted within
this document in eLibrary, type the
24 hours from the close of the gas day
docket number excluding the last three
on which gas flows, i.e., on or before
digits of this document in the docket
9:00 a.m. central clock time for flows
number field.
occurring on the gas day that ended 24
hours before.
91. User assistance is available for
*
*
*
*
eLibrary and the FERC’s Web site during *
4. Section 284.14 is added to read as
normal business hours from FERC
follows:
Online Support at 202–502–6652 (toll
free at 1–866–208–3676) or e-mail at
§ 284.14 Flow information of major nonferconlinesupport@ferc.gov, or the
interstate pipelines.
Public Reference Room at (202) 502–
(a) Daily posting requirement. A major
8371, TTY (202) 502–8659. E-mail the
non-interstate pipeline must provide on
Public Reference Room at
a daily basis on an Internet Web site and
public.referenceroom@ferc.gov.
in downloadable file formats, in
conformity with § 284.12 of this chapter,
List of Subjects in 18 CFR Part 284
equal and timely access to information
Continental Shelf, Incorporation by
relevant to the capacity of major points
reference, Natural gas, Reporting and
and mainline segments and the amount
recordkeeping requirements.
scheduled at each such major point or
mainline segment whenever capacity is
By direction of the Commission.
scheduled. A major non-interstate
Nathaniel J. Davis, Sr.,
pipeline must also provide in the same
Deputy Secretary.
manner access to information on actual
flowing volumes at major points and
For the reasons discussed in the
preamble, the Federal Energy Regulatory mainline segments. This information
Commission proposes to amend 18 CFR must be posted within 24 hours from
the close of the gas day on which gas
chapter I as follows:
PO 00000
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*
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Federal Register / Vol. 73, No. 4 / Monday, January 7, 2008 / Proposed Rules
flows, i.e., on or before 9:00 a.m. central
clock time for flows occurring on the gas
day that ended 24 hours before.
(b) Exemptions to daily posting
requirement. The following categories of
major non-interstate pipelines are
exempt from the reporting requirement
of paragraph (a) of this section:
(1) Those that fall entirely upstream of
a processing plant; and
(2) Those that deliver more than
ninety-five percent (95%) of the natural
gas volumes they flow directly to endusers.
(3) To determine eligibility for the
exemption in paragraph (b)(2) of this
section, a major non-interstate pipeline
must measure volumes by average
deliveries over the preceding three
calendar years.
public hearing is under section 361 of
the Internal Revenue Code.
The public comments and outlines of
oral testimony were due on December
27, 2007. The notice of proposed
rulemaking and notice of public hearing
instructed those interested in testifying
at the public hearing to submit an
outline of the topics to be addressed. As
of Wednesday, January 2, 2008, no one
has requested to speak. Therefore, the
public hearing scheduled for January 16,
2008, is cancelled.
Cynthia E. Grigsby,
Senior Federal Register Liaison Officer,
Publications and Regulations Branch, Legal
Processing Division, Associate Chief Counsel
(Procedure and Administration).
[FR Doc. E8–24 Filed 1–4–08; 8:45 am]
BILLING CODE 4830–01–P
[FR Doc. E7–25435 Filed 1–4–08; 8:45 am]
BILLING CODE 6717–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
DEPARTMENT OF THE TREASURY
26 CFR Part 301
Internal Revenue Service
[REG–136596–07]
26 CFR Part 1
RIN 1545–BH12
[REG–143326–05]
RIN 1545–BE95
S Corporation Guidance Under AJCA
of 2004 and GOZA of 2005; Hearing
Cancellation
Internal Revenue Service (IRS),
Treasury.
ACTION: Cancellation of notice of public
hearing on proposed rulemaking.
jlentini on PROD1PC65 with PROPOSALS
AGENCY:
SUMMARY: This document cancels a
public hearing on proposed regulations
that provide guidance regarding certain
changes made to the rules governing S
corporations under the American Jobs
Creation Act of 2004 and the Gulf
Opportunity Zone Act of 2005.
DATES: The public hearing, originally
scheduled for January 16, 2008, at 10
a.m. is cancelled.
FOR FURTHER INFORMATION CONTACT:
Kelly Banks of the Publications and
Regulations Branch, Legal Processing
Division, Associate Chief Counsel
(Procedure and Administration) at (202)
622–0392 (not a toll-free number).
SUPPLEMENTARY INFORMATION: A notice
of proposed rulemaking and notice of
public hearing that appeared in the
Federal Register on Friday, September
28, 2007 (72 FR 55132), announced that
a public hearing was scheduled for
January 16, 2008, at 10 a.m. in the IRS
Auditorium, Internal Revenue Building,
1111 Constitution Avenue, NW.,
Washington, DC. The subject of the
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18:51 Jan 04, 2008
Jkt 214001
Guidance Regarding Marketing of
Refund Anticipation Loans (RALs) and
Certain Other Products in Connection
With the Preparation of a Tax Return
Internal Revenue Service (IRS),
Treasury.
ACTION: Advance notice of proposed
rulemaking (ANPRM).
AGENCY:
SUMMARY: This document describes
rules that the Treasury Department and
the IRS are considering proposing, in a
notice of proposed rulemaking,
regarding the disclosure and use of tax
return information by tax return
preparers. The rules would apply to the
marketing of refund anticipation loans
(RALs) and certain other products in
connection with the preparation of a tax
return and, as an exception to the
general principle that taxpayers should
have control over their tax return
information that is reflected in final
regulations published in T.D. 9375,
which is published elsewhere in this
issue of the Federal Register, provide
that a tax return preparer may not obtain
a taxpayer’s consent to disclose or use
tax return information for the purpose of
soliciting taxpayers to purchase such
products. This document invites
comments from the public regarding
these contemplated rules. All materials
submitted will be available for public
inspection and copying.
DATES: Written or electronic comments
must be received by April 7, 2008.
PO 00000
Frm 00016
Fmt 4702
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1131
Send submissions to:
CC:PA:LPD:PR (REG–136596–07), Room
5203, Internal Revenue Service, PO Box
7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be handdelivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to CC:PA:LPD:PR (REG–136596–07),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue,
NW., Washington, DC, or sent
electronically via the Federal
eRulemaking Portal at https://
www.regulations.gov (IRS REG–136596–
07).
FOR FURTHER INFORMATION CONTACT:
Concerning submissions of comments,
Kelly Banks at (202) 622–7180;
concerning the proposals, Lawrence
Mack at (202) 622–4940 (not toll-free
numbers).
ADDRESSES:
SUPPLEMENTARY INFORMATION:
Background
This document describes rules that
the Treasury Department and the IRS
are considering proposing in a notice of
proposed rulemaking regarding the
marketing of refund anticipation loans
(RALs) and certain other products
identified below in connection with the
preparation of a tax return.
The proposed rules would amend the
Regulations on Procedure and
Administration (26 CFR part 301) under
section 7216 of the Internal Revenue
Code. Section 7216 was enacted by
section 316 of the Revenue Act of 1971,
Public Law 92–178 (85 Stat. 529, 1971),
and has been amended several times
since 1971. Section 7216 imposes
criminal penalties on tax return
preparers who knowingly or recklessly
make unauthorized disclosures or uses
of information furnished to them in
connection with the preparation of an
income tax return. In addition, tax
return preparers are subject to civil
penalties under section 6713 for
disclosure or use of this information
unless an exception under the rules of
section 7216(b) applies to the disclosure
or use.
A notice of proposed rulemaking
(REG–137243–02) was published in the
Federal Register (70 FR 72954) on
December 8, 2005. Concurrent with
publication of the proposed regulations,
the IRS published Notice 2005–93,
2005–52 I.R.B. 1204 (December 7, 2005),
setting forth a proposed revenue
procedure that would provide guidance
to tax return preparers regarding the
format and content of consents to use
and consents to disclose tax return
information under § 301.7216–3.
Among other recommendations
received in response to the notice of
E:\FR\FM\07JAP1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 4 (Monday, January 7, 2008)]
[Proposed Rules]
[Pages 1116-1131]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-25435]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 73, No. 4 / Monday, January 7, 2008 /
Proposed Rules
[[Page 1116]]
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 284
[Docket No. RM08-2-000]
Pipeline Posting Requirements Under Section 23 of the Natural Gas
Act
December 21, 2007.
AGENCY: Federal Energy Regulatory Commission.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: In this Notice of Proposed Rulemaking, the Commission proposes
to require both interstate and certain major non-interstate pipelines
to post capacity, daily scheduled flow information and daily actual
flow information. This proposal incorporates one contained in an
earlier Notice of Proposed Rulemaking to require the posting of
capacity and daily actual flow information by some intrastate
pipelines, with some changes. Under this proposal, interstate pipelines
would be required to post daily actual flow information in addition to
their currently required posting of capacity and daily scheduling
information. Non-interstate pipelines would be required to post daily
scheduled flow information in addition to the earlier Notice of
Proposed Rulemaking proposal to require posting capacity and daily
actual flow information. The posting proposal would facilitate price
transparency in markets for the sale or transportation of physical
natural gas in interstate commerce to implement section 23 of the
Natural Gas Act.
DATES: Comments are due February 21, 2008. Reply comments are due March
24, 2008.
ADDRESSES: You may submit comments, identified by docket number by any
of the following methods:
Agency Web Site: https://ferc.gov Follow the instructions
for submitting comments via the eFiling link found in the Comment
Procedures section of the preamble. Documents created electronically
using word processing software should be filed in native applications
or print-to-PDF format and not in a scanned format.
Mail/Hand Delivery: Commenters unable to file comments
electronically must mail or hand deliver an original and 14 copies of
their comments to: Federal Energy Regulatory Commission, Secretary of
the Commission, 888 First Street, NE., Washington, DC 20426. Please
refer to the Comment Procedures section of the preamble for additional
information on how to file paper comments.
FOR FURTHER INFORMATION CONTACT:
Stephen J. Harvey (Technical), Office of Enforcement, Federal
Energy Regulatory Commission, 888 First Street NE., Washington, DC
20426, (202) 502-6372, Stephen.Harvey@ferc.gov.
Charles Whitmore (Technical), Office of Enforcement, Federal Energy
Regulatory Commission, 888 First Street NE., Washington, DC 20426,
(202) 502-6256, Charles.Whitmore@ferc.gov.
Eric Ciccoretti (Legal), Office of Enforcement, Federal Energy
Regulatory Commission, 888 First Street NE., Washington, DC 20426,
(202) 502-8493, Eric.Ciccoretti@ferc.gov.
SUPPLEMENTARY INFORMATION:
I. Introduction and Summary of Proposal
1. On April 19, 2007, the Commission issued a Notice of Proposed
Rulemaking (Initial NOPR) to implement section 23 of the Natural Gas
Act, which was added to the act by the Energy Policy Act of 2005 (EPAct
2005).\1\ In the Initial NOPR, the Commission proposed an annual
reporting requirement for certain natural gas sellers and buyers and a
daily posting requirement for intrastate pipelines.\2\ The Commission
also asked in the Initial NOPR whether posting requirements for
interstate pipeline should be changed.\3\
---------------------------------------------------------------------------
\1\ Transparency Provisions of Section 23 of the Natural Gas
Act, 72 FR 20791 (Apr. 26, 2007), FERC Stats. and Regs. ] 32,614
(2007). Congress enacted section 23 of the Natural Gas Act as part
of the Energy Policy Act of 2005. Energy Policy Act of 2005, Pub. L.
No. 109-58, 119 Stat. 594 (2005).
\2\ Initial NOPR at P 1-2.
\3\ Initial NOPR at P 43.
---------------------------------------------------------------------------
2. Concurrently, the Commission is issuing a Final Rule with
respect to the annual reporting requirement. With respect to the
pipeline posting proposal, based on Staff experience as well as the
comments received, the Commission has determined to issue the instant
notice of proposed rulemaking (NOPR) to develop the record more fully
with respect to the posting proposal. The Initial NOPR may not have
given sufficient notice to interstate pipelines of changes that seem
necessary to implement adequately section 23 of the Natural Gas Act. In
addition, the Commission believes that more information regarding the
technical implementation of daily posting of actual flow information by
interstate pipelines is required in order to consider the costs and
benefits of such a regulatory change. For those purposes, the
Commission incorporates by reference the Initial NOPR and all comments
filed in response to the Initial NOPR in Docket No. RM07-10-000 with
respect to the pipeline posting proposal.
3. The Commission intends the instant proposal to make available
the information needed to track daily flows of natural gas adequately
throughout the United States. Specifically, the Commission proposes to
require both interstate pipelines and major non-interstate pipelines
\4\ to post daily information regarding their capacity, scheduled flow
volumes, and actual flow volumes at major points and mainline segments.
The proposal would result in both interstate and non-interstate
pipelines posting the same types of information.
---------------------------------------------------------------------------
\4\ In the Initial NOPR, the Commission used the term
``intrastate pipeline;'' herein, the Commission uses the term ``non-
interstate pipeline''--a point explained further below.
---------------------------------------------------------------------------
4. For interstate pipelines, this proposal would add to the
existing posting requirements in Sec. 284.13(d) a requirement to post
daily actual flow volume.\5\ To bring the requirements for major non-
interstate pipelines into alignment with the existing and proposed
posting requirements for interstate pipelines, this proposal adds to
the proposal in the Initial NOPR a requirement that major non-
interstate pipelines post daily scheduled flow volumes.\6\ For the
purposes of this NOPR, a ``major non-interstate pipeline'' is defined
as one that is not a ``natural gas company'' under section 1 of the
Natural Gas Act \7\ and that flows greater
[[Page 1117]]
than 10 million (10,000,000) MMBtus of natural gas per year, with two
exceptions.\8\ The first exception is non-interstate pipelines that
fall entirely upstream of a processing plant.\9\ The second exception
is non-interstate pipelines that deliver more than ninety-five percent
(95%) of the natural gas volumes they flow directly to end-users.\10\
---------------------------------------------------------------------------
\5\ Proposed 18 CFR 284.13(d).
\6\ Proposed 18 CFR 284.14(a).
\7\ 15 U.S.C. 717.
\8\ Proposed 18 CFR 284.1.
\9\ Proposed 18 CFR 284.14(b)(1).
\10\ Proposed 18 CFR 284.14(b)(2).
---------------------------------------------------------------------------
5. With these proposed additions of flow information from major
non-interstate pipelines to the information already available from
interstate pipelines, market observers, such as the Commission, state
commissions and market participants, could develop a better
understanding of the supply and demand conditions that directly affect
the U.S. wholesale natural gas markets. Market participants would have
a better basis for evaluating the prices at which they transact.
Consequently, this proposal to increase information from non-interstate
pipelines and from interstate pipelines would directly ``facilitate
price transparency for the sale * * * of physical natural gas in
interstate commerce'' as authorized in the natural gas transparency
provisions.\11\
---------------------------------------------------------------------------
\11\ Section 23(a)(1) of the Natural Gas Act, 15 U.S.C. 717t-
2(a)(1) (2000 & Supp. V 2005).
---------------------------------------------------------------------------
6. The Commission's proposal would apply to major non-interstate
pipelines even though section 1 of the Natural Gas Act \12\ excludes
them from the Commission's ratemaking authority under sections 4 and 5
of the Natural Gas Act \13\ and the Commission's certificate authority
under section 7 of the Natural Gas Act.\14\ As discussed below,
Congress placed market participants, which include non-interstate
pipelines, within the Commission's transparency authority under section
23 of the Natural Gas Act to ensure ``the dissemination, on a timely
basis, of information about the availability and prices of natural gas
sold at wholesale and in interstate commerce.'' \15\ Aware that the
pre-EPAct 2005 limits on the Commission's authority would have left
gaps in the transparency of the wholesale, physical natural gas
markets, Congress did not restrict the Commission's transparency
authority to those same limits in enacting section 23 of the Natural
Gas Act. As we stated in the Initial NOPR: ``While distinctions between
intrastate and interstate natural gas markets may be meaningful from a
legal perspective, they are not meaningful from the perspective of
market price formation.'' \16\ Congress was aware of the legal
distinctions between natural gas markets in enacting EPAct 2005 and, in
choosing to use the term ``any market participant'' indicated that
these distinctions should not apply to the Commission's transparency
authority. At the same time, by not amending section 1 of the Natural
Gas Act, Congress retained the legal distinctions between intrastate
and interstate pipelines for the purposes of delineating the entities
subject to the Commission's authority over ratemaking in sections 4 and
5 and over certification of construction and sales of new facilities
and transportation services in section 7 of the act.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 717.
\13\ 15 U.S.C. 717c; 15 U.S.C. 717d.
\14\ 15 U.S.C. 717f.
\15\ Section 23(a)(2) of the Natural Gas Act, 15 U.S.C. 717t-
2(a)(2) (2000 & Supp. V 2005).
\16\ Initial NOPR at P 20.
---------------------------------------------------------------------------
7. The Commission issues this NOPR in order to solicit further
comment on requiring actual flow information from both interstate and
non-interstate pipelines and to consider whether the posting
requirements for both interstate and non-interstate pipelines should be
similar. In the Initial NOPR, the Commission did not propose to require
the posting of actual flow information by interstate pipelines, but it
did seek comment on such posting.\17\ Further comment in response to
the instant NOPR will allow the Commission to give more consideration
to requiring actual flow information on interstate pipelines, in
particular the technical issues associated with quick posting of that
information. In addition, the Commission seeks further comment
regarding how the posting requirements should apply to storage
facilities and regarding its daily pipeline posting proposal for major
non-interstate pipelines.
---------------------------------------------------------------------------
\17\ Initial NOPR at P 43.
---------------------------------------------------------------------------
8. To address implementation issues associated with the posting
proposal, such as obtaining and posting actual flow information and
obtaining and posting information from storage facilities, the
Commission directs Staff to conduct a technical conference before
comments on this NOPR are due.
II. The Commission's Transparency Authority Over Non-Interstate
Pipelines Under Section 23 of the Natural Gas Act
9. At the outset, the Commission addresses the jurisdictional
issues raised by its proposal in the Initial NOPR. In the Initial NOPR,
the Commission explained how section 23 of the Natural Gas Act
authorizes the Commission to require an intrastate pipeline to post
information regarding its transportation of natural gas, even though
section 1 of the Natural Gas Act excludes such companies from the
Commission's authority to regulate transportation of natural gas under
sections 4, 5, and 7 of the Natural Gas Act.\18\
---------------------------------------------------------------------------
\18\ Initial NOPR at P 11-18, 21-24, & 37.
---------------------------------------------------------------------------
A. Comments
1. Comments: Section 23 of the Natural Gas Act
10. The Texas Pipeline Association (TPA) \19\ argued that, contrary
to the Commission's explanation, the plain language of section 23 of
the Natural Gas Act shows that the term ``market participant'' is
limited to those entities that participate in wholesale interstate
natural gas markets and does not include intrastate pipelines.\20\ TPA
concluded that the plain language of section 23 of the Natural Gas Act
does not support the Commission's assertion of authority to collect
information from intrastate pipelines because they do not participate
in markets for the sale or transportation of natural gas in interstate
commerce.\21\
---------------------------------------------------------------------------
\19\ Eight entities expressed support for the Texas Pipeline
Association's comments: Atmos Energy Corporation, Copano Energy,
L.L.C., Crosstex Energy Services, LP, DCP Midstream, LLC, Enbridge
Energy Co., Inc., Gas Processors Association, Kinder Morgan Texas
Intrastate Pipeline Group, Targa Resources, Inc.
\20\ Comments of TPA at 16-17.
\21\ Id.
---------------------------------------------------------------------------
11. Enterprise Products Partners L.P. (Enterprise) also asserted
that an entity must be participating in the interstate market to be a
``market participant'' under section 23 of the Natural Gas Act.
Enterprise reasoned that an entity subject to the Commission's
authority under section 23 but not to its authority under other
sections of the Natural Gas Act is an entity that ``participat[es] in
the interstate market (whether by buying, selling, shipping or trading
physical natural gas) but not already subject to [Natural Gas Act]
jurisdiction as natural gas companies.'' \22\ According to Enterprise,
the Commission's proposal to impose posting requirements on intrastate
pipelines bears no relation to Congress's intention to restrict the
Commission's jurisdiction to entities participating in the interstate
market.\23\
---------------------------------------------------------------------------
\22\ Comments of Enterprise at 13.
\23\ Id.
---------------------------------------------------------------------------
12. Similarly, the Railroad Commission of Texas argued that the
term ``market participant'' does not indicate that Congress
contemplated the expansion of Commission authority to
[[Page 1118]]
include intrastate pipelines as asserted by the Commission.\24\ The
Railroad Commission of Texas explained that there is no reference at
all in the relevant statutory provisions or legislative history of
EPAct 2005 to intrastate pipelines, the intrastate natural gas market
or intrastate gas flows and no express indication that the Commission's
authority was being extended in any manner over ``intrastate'' market
participants.\25\
---------------------------------------------------------------------------
\24\ Comments of Railroad Commission of Texas at 6-7; see also
Comments of Atmos Pipeline-Texas at 6-7.
\25\ Comments of Railroad Commission of Texas at 7.
---------------------------------------------------------------------------
13. One commenter, Enterprise, contended that the Commission does
not have the authority to require posting of information by intrastate
pipelines because Congress limited the information that may be
collected from market participants to ``information about natural gas
sold at wholesale and in interstate commerce.'' \26\ Enterprise
interpreted Congress's use of the word ``about'' as limiting language
and asserted that Congress deliberately chose the word ``about'' as
opposed to ``affect'' or ``at least impacts'' in order to stress that
the Commission does not have the authority to compel reporting for any
activity that might have some impact on the interstate wholesale
natural gas markets.\27\
---------------------------------------------------------------------------
\26\ Comments of Enterprise Products Partners, L.P. at 11
(emphasis in original).
\27\ Id. at 11-12.
---------------------------------------------------------------------------
2. Comments: Section 1(b) of the Natural Gas Act
14. TPA argued that section 1(b) of the Natural Gas Act precludes
the Commission from prescribing rules under its section 23 authority
that apply to intrastate transportation or sale of natural gas.\28\ TPA
asserted that Congress has consistently respected the distinction
between interstate and intrastate pipelines which first appeared in
section 1(b) of the Natural Gas Act and was recognized by Congress in
amendments to the Natural Gas Act and in the Natural Gas Policy Act of
1978.\29\ TPA referred to numerous appellate court decisions that
recognized this distinction in reviewing the Commission's
jurisdiction.\30\
---------------------------------------------------------------------------
\28\ Comments of TPA at 7; see also Comments of Louisiana Office
of Conservation at 5.
\29\ Comments of TPA at 9.
\30\ Id. at 11 (citations omitted).
---------------------------------------------------------------------------
15. Several commenters argued that if Congress intended the
transparency provisions to cover intrastate pipelines, it would have
amended section 1 of the Natural Gas Act.\31\ TPA argued that if
Congress intended to expand the Commission's authority over intrastate
transportation of natural gas, it would have amended section 1(b) to
include new posting obligations for intrastate pipelines for all daily
flows and capacity at major points.\32\ TPA explained that, in EPAct
2005, Congress amended section 1(b) of the Natural Gas Act to include
application to the importation or exportation of natural gas in foreign
commerce and to persons engaged in such importation or exportation.\33\
TPA contended that without a similar amendment to section 1(b) to
provide for the posting of information Congress cannot ``cross the
jurisdictional line'' by imposing a posting requirement on intrastate
pipelines.\34\
---------------------------------------------------------------------------
\31\ Comments of TPA at 10-11; Comments of Enterprise at 15;
Comments of Louisiana Office of Conservation at 5; Comments of
Railroad Commission of Texas at 6-7.
\32\ Comments of TPA at 10-11.
\33\ Id. (citing EPAct 2005 section 311 (amending section 1(b)
of the Natural Gas Act)).
\34\ Comments of TPA at 11.
---------------------------------------------------------------------------
3. Comments: Section 1(c) of the Natural Gas Act
16. Several commenters, such as the Railroad Commission of Texas,
asserted that the Commission's proposal to require intrastate pipelines
to post information impermissibly intrudes on states' regulation of
natural gas transportation.\35\ Cranberry Pipeline Corporation argued
that the Commission cannot have jurisdiction over intrastate
transactions when those transactions are already subject to the
jurisdiction of the state regulatory commission.\36\ Similarly, DCP
argued that the Commission ignored section 1(c) of the Natural Gas Act
which exempts intrastate transportation because it is viewed as a
matter of local concern subject to regulation by the states.\37\
---------------------------------------------------------------------------
\35\ Comments of Railroad Commission of Texas at 8-9; see also
Reply Comments of the RRC of Texas at 8; Reply Comments of the Texas
Pipeline Association at 12.
\36\ Comments of Cranberry Pipeline Corporation at 8 (internal
citations omitted).
\37\ Comments of DCP Midstream, LLC at 7 (internal citations
omitted).
---------------------------------------------------------------------------
4. Comments: Other
17. TPA argued that there is no indication in the legislative
history of section 23 that Congress intended to modify the Commission's
jurisdiction to include intrastate transportation.\38\ Atmos Energy
Corporation (Atmos) and the Railroad Commission of Texas similarly
stated that there is no reference at all in the relevant statutory
provisions or legislative history of EPAct 2005 to intrastate
pipelines, the intrastate natural gas market or intrastate gas flows
and certainly no express indication that the FERC's authority was being
extended in any manner over ``intrastate'' market participants.\39\
---------------------------------------------------------------------------
\38\ Comments of TPA at 21.
\39\ Comments of Atmos at 12 (internal citations omitted);
Comments of the Railroad Commission of Texas at 6-7 (internal
citations omitted).
---------------------------------------------------------------------------
18. DCP Midstream, LLC argued that intrastate pipelines should not
be held to the same reporting burden as interstate pipelines because
intrastate pipelines have not submitted to the jurisdiction of the
Commission. The burdens that an interstate pipeline assumes, DCP
contended, accompany a certificate of public convenience and necessity
and should not be imposed on an intrastate pipeline. DCP asserted that
the Commission's policy historically has been that only gas pipelines
that affirmatively accepted a jurisdictional certificate to provide
transportation in interstate commerce would be subject to Commission
regulation, such as daily scheduled volume or pipeline capacity
reporting.\40\
---------------------------------------------------------------------------
\40\ Comments of DCP Midstream, LLC at 9-10.
---------------------------------------------------------------------------
19. Atmos argued that the Commission's interpretation of Natural
Gas Act section 23 is inconsistent with the Commission's prior analysis
of its own jurisdiction in Order No. 670 \41\ and Order No. 636.\42\
Atmos pointed to Order No. 670, in which the Commission interpreted the
phrase ``any entity'' from section 4A of the Natural Gas Act to
encompass any person or form of organization, regardless of its legal
status, function or activities, and further concluded that this
language did not specifically exclude entities engaged in non-
jurisdictional activities.\43\ Atmos also described the Commission
interpreting the phrase ``in connection with'' from section 4A so as to
conclude that not every common-law fraud that touches a jurisdictional
transaction would constitute market manipulation.\44\ According to
Atmos, in Order No. 670, the Commission further determined, that had
Congress intended to expand the Commission's jurisdiction
[[Page 1119]]
so significantly as to give it anti-manipulation authority over non-
jurisdictional transactions such as first sales of natural gas, sales
of imported natural gas, sales of imported liquefied natural gas, or
sales and transportation by entities exempt from Commission regulation
under Natural Gas Act section 1(b), then it would have done so
explicitly.\45\
---------------------------------------------------------------------------
\41\ Prohibition of Energy Market Manipulation, Order No. 670,
71 FR 4244 (Jan. 26, 2006), FERC Stats. & Regs. ] 31,202 (2006)
(Order No. 670).
\42\ Pipeline Service Obligations and Revisions to Regulations
Governing Self-Implementing Transportation; and Regulation of
Natural Gas Pipelines After Partial Wellhead Decontrol, Order No.
636, 57 FR 13267 (Apr. 16, 1992), FERC Stats. & Regs. ] 30,939
(1992), order on reh'g, Order No. 636-A, 57 FR 36128 (Aug. 12,
1992), FERC Stats. & Regs. ] 30,950 (1992), order on reh'g, Order
No. 636-B, 61 FERC ] 61,272 (1992), order on reh'g, 62 FERC ] 61,007
(1993), aff'd in part and remanded in part sub nom, United
Distribution Cos. v. FERC, 88 F.3d 1105 (D.C. Cir. 1996), order on
remand, Order No. 636-C, 78 FERC ] 61,186 (1997) (Order No. 636).
\43\ Comments of Atmos at 9.
\44\ Id. at 9-10.
\45\ Id. at 9 (internal citations omitted).
---------------------------------------------------------------------------
20. As to Order No. 636, Atmos argued that the Commission's
assertion of transparency authority over intrastate pipelines is
contrary to its holdings in that order, in which the Commission held
that a non-interstate pipeline ``providing service under section 311 of
the [Natural Gas Policy Act of 1978] is not required to meet the
service requirements of the Commission's Order No. 636 such as offering
firm service, having a capacity release program, posting available
capacity electronically, offering flexible receipt and delivery points,
or unbundling distinct services.'' \46\ By contrast, the pipeline
posting proposal, asserted Atmos, would not only extend daily posting
requirements to section 311 transportation by intrastate pipelines, but
also to transportation that is purely intrastate in nature.\47\
---------------------------------------------------------------------------
\46\ Id. at 15 (emphasis in original).
\47\ Id. at 12 (internal citations omitted). Atmos stated that
it would not object if the Commission limits the posting
requirements applicable to intrastate pipelines to section 311
transportation or other activity regulated under the Natural Gas
Policy Act of 1978. Id.
---------------------------------------------------------------------------
21. Some commenters, such as the Railroad Commission of Texas,
expressed concern that a requirement for intrastate pipelines to post
information would lead to further regulation of those intrastate
pipelines.\48\
---------------------------------------------------------------------------
\48\ Comments of the Railroad Commission of Texas at 8-9.
---------------------------------------------------------------------------
B. Discussion
22. The Commission proposes here to require major non-interstate
pipelines to post information regarding capacity, scheduled flow
volumes, and actual flow volumes.\49\ This proposal would impose
posting requirements on major non-interstate pipelines in a limited
way. The Commission does not intend to regulate the intrastate
operations of those non-interstate pipelines; nor do we intend to
regulate the rates or terms and conditions of intrastate service for
those non-interstate pipelines. The Commission proposes to require
those non-interstate pipelines only to post information.
---------------------------------------------------------------------------
\49\ Proposed 18 CFR 284.14(a).
---------------------------------------------------------------------------
23. In the Initial NOPR, the Commission used the term ``intrastate
pipeline.'' In this proposal, the Commission uses the term ``non-
interstate pipeline.'' The latter term more accurately describes the
scope of the proposed rule, which is issued pursuant to section 23 of
the Natural Gas Act.\50\ This section applies to both interstate and
non-interstate pipelines, a point explained further below, and does not
use the term ``intrastate pipeline.'' In this NOPR, the Commission
proposes to collect important information about the physical, natural
gas market from certain pipelines in the continental United States
regardless of whether the pipeline is an intrastate pipeline, a Hinshaw
pipeline, or any other type of pipeline that is not an interstate
pipeline under the Natural Gas Act. The subjects of the posting
requirement proposed herein are set by their participation in the
physical, natural gas market not by their legal status under section 1
of the Natural Gas Act.\51\
---------------------------------------------------------------------------
\50\ 15 U.S.C. 717t-2 (2000 & Supp. V 2005).
\51\ 15 U.S.C. 717.
---------------------------------------------------------------------------
24. The proposed posting requirements for non-interstate pipelines
are consistent with Congress's intent as expressed in section 23 of the
Natural Gas Act. There, Congress permitted the Commission to impose on
a broad set of market participants requirements for a limited purpose,
i.e., to obtain and disseminate ``information about the availability
and prices of natural gas at wholesale and in interstate commerce.''
\52\ At the same time, as the Commission explicitly acknowledges,
Congress did not expand the Commission's authority to impose on the
same set of market participants requirements related to the
Commission's traditional regulatory activities, e.g., ratemaking under
sections 4 and 5 of the Natural Gas Act and certification of
construction and sales and transportation services under section 7 of
the Natural Gas Act.
---------------------------------------------------------------------------
\52\ Section 23(a)(2) of the Natural Gas Act, 15 U.S.C. 717t-
2(a)(2) (2000 & Supp. V 2005).
---------------------------------------------------------------------------
25. Congress placed non-interstate pipelines within the
Commission's transparency authority under section 23 of the Natural Gas
Act in order to ensure--for the entirety of the wholesale, physical
natural gas market--transparency of price and availability, including
transparency of market price formation. Aware that the pre-EPAct 2005
limits on the Commission's authority would have left gaps in the
transparency of the wholesale, physical natural gas markets, Congress
did not restrict the Commission's transparency authority to those same
limits in enacting section 23 of the Natural Gas Act. As we stated in
the Initial NOPR, ``While distinctions between intrastate and
interstate markets may be meaningful from a legal perspective, they are
not meaningful from the perspective of market price formation.'' \53\
Congress was aware of the legal distinctions between non-interstate and
interstate natural gas markets in enacting EPAct 2005. In choosing to
use the term ``any market participant'' and focusing section 23 on
``information about the availability and prices of natural gas at
wholesale and in interstate commerce,'' Congress indicated that these
distinctions should not apply to the Commission's transparency
authority. At the same time, by not amending section 1, Congress
retained the legal distinctions between intrastate and interstate
markets for the purposes of delineating the entities subject to the
Commission's authority over ratemaking in sections 4 and 5 and over
construction of natural gas facilities in section 7 of the Natural Gas
Act.
---------------------------------------------------------------------------
\53\ Initial NOPR at P 20.
---------------------------------------------------------------------------
1. Discussion: Section 23 of the Natural Gas Act
26. The language in section 23 of the Natural Gas Act supports the
Commission's authority to require non-interstate pipelines to post
information about capacity, scheduled flow volumes and actual flow
volumes. In section 23(a)(1), Congress directed the Commission to
``facilitate price transparency in markets for the sale or
transportation of physical natural gas in interstate commerce * * *.''
\54\ In section 23(a)(2), Congress authorized the Commission to
``provide for the dissemination, on a timely basis, of information
about the availability and prices of natural gas sold at wholesale and
in interstate commerce * * *.'' \55\ Congress expressly delegated to
the Commission the task of adopting rules to give life to this
provision \56\ and, in section 23(a)(3), provided that the Commission
may ``obtain the information'' about the availability and prices of
natural gas sold at wholesale and in interstate commerce from ``any
market participant.'' \57\
---------------------------------------------------------------------------
\54\ 15 U.S.C. 717t-2(a)(1) (2000 & Supp. V 2005).
\55\ 15 U.S.C. 717t-2(a)(2) (2000 & Supp. V 2005).
\56\ Id.
\57\ 15 U.S.C. 717t-2(a)(3) (2000 & Supp. V 2005).
---------------------------------------------------------------------------
27. Congress could have limited the Commission's transparency
authority to obtaining information from any ``natural gas company''
subject to the Commission's traditional regulatory authority. It did
not do so. Instead, in using the broad new term ``any market
participant,'' Congress deliberately
[[Page 1120]]
expanded the universe subject to the Commission's transparency
authority beyond ``natural gas compan[ies].'' \58\ The term ``any
market participant'' is not defined in the Natural Gas Act; however, it
is not on its face limited to entities made subject to the Natural Gas
Act under section 1.\59\ Indeed, the language of section 23 indicates
that entities excluded from the Commission's authority under section 1
of the Natural Gas Act would be included in section 23. First, in
section 23, Congress did not reference the limitations of section 1
explicitly (discussed further below).
---------------------------------------------------------------------------
\58\ Contrary to the assertions of Bridgeline Holdings, L.P.
(Bridgeline), Comments of Bridgeline at 6, this grant of
transparency authority is not an implied grant.
\59\ Initial NOPR at P 12.
---------------------------------------------------------------------------
Second, in section 23, Congress did not use the term ``natural gas
company'' from section 2(6), which is defined as ``a person engaged in
the transportation of natural gas in interstate commerce, or the sale
in interstate commerce of such gas for resale.'' \60\ This limiting
term is used in section 1 of the Natural Gas Act to limit the
Commission's authority, for instance, under sections 4, 5, and 7 of the
Natural Gas Act.\61\ These approaches would have been the simplest ways
for Congress to have indicated an intent to limit the Commission's
transparency authority in the same manner it limited the Commission's
comprehensive regulatory authority in other sections of the Natural Gas
Act. Thus, commenters' arguments that the Commission has authority to
obtain information only from those subject to the Commission's
authority under section 1 of the Natural Gas Act are inconsistent with
the language of the statute.
---------------------------------------------------------------------------
\60\ 15 U.S.C. 717a(6).
\61\ 15 U.S.C. 717c, 717d & 717f.
---------------------------------------------------------------------------
28. In granting the Commission broad authority to obtain
information, the Congress not only used the new term ``market
participant'' but it also specifically referred to ``any'' market
participant, instead of limiting the Commission's authority to obtain
information from market participants subject to the Commission's
traditional Natural Gas Act jurisdiction. The word ``any'' gives the
term it modifies (in this case, ``market participant'') an expansive
meaning.\62\
---------------------------------------------------------------------------
\62\ Norfolk S. Rwy. Co. v. Kirby, 543 U.S. 14, 31-32 (2004)
(the word ``any'' gives the word it modifies an expansive reading);
Department of Housing and Urban Dev. v. Rucker, 535 U.S. 125, 130-31
(2002); TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001) (one must give
effect to each word in a statute so that none is rendered
superfluous); United States v. Gonzales, 520 U.S. 1, 5 (1997)
(``any'' is an expansive term, meaning ``one or some
indiscriminately of whatever kind,''); New York v. EPA, 443 F.3d
880, 885-87 (D.C. Cir. 2006) (the word ``any'' is broadly construed
to reflect Congress' intent that all types of physical changes are
subject to the Clean Air Act's New Source Review program).
---------------------------------------------------------------------------
29. In addition, in section 23(d)(2), Congress created a de minimis
exception to the other provisions in section 23. Specifically, Congress
instructed the Commission to create a de minimis exception for
gatherers and producers, which section 1(b) of the Natural Gas Act
explicitly excludes from Commission's traditional regulation. If, as
some commenters asserted, Congress did not intend to give the
Commission authority over any entity excluded by section 1(b) of the
Natural Gas Act, a de minimis exception would have been unnecessary; in
other words, section 23(d)(2) would have been surplusage. Congress is
not presumed to enact surplus language.\63\ To avoid this improper
result, the Commission interprets section 23 of the Natural Gas Act to
give effect to the de minimis language by interpreting the term ``any
market participant'' to include those entities otherwise excluded from
the Commission's Natural Gas Act jurisdiction by section 1(b) of the
act.
---------------------------------------------------------------------------
\63\ City of Roseville v. Norton, 348 F.3d 1020, 1028 (D.C. Cir.
2003) (citing Babbitt v. Sweet Home Chapter of Community for a Great
Oregon, 515 U.S. 687, 698 (1995)).
---------------------------------------------------------------------------
30. The Commission disagrees that the term ``about'' in section 23
is a limiting term as asserted by Enterprise. In the Initial NOPR, the
Commission described the information proposed to be collected from
intrastate pipelines as information ``about'' interstate, wholesale
natural gas markets because the flows on intrastate pipelines affect
interstate, wholesale natural gas markets.\64\ The Commission used the
term ``pertains'' as a synonym for ``about.'' Indeed, contrary to
Enterprise's reading, we read the term ``about'' as broader than the
terms ``affect'' or ``impacts.'' Information may be ``about'' a subject
without ``affecting'' it; hence, flow information may be ``about
natural gas sold at wholesale and in interstate commerce'' even if it
does not ``affect'' such natural gas (even though it normally does).
---------------------------------------------------------------------------
\64\ Initial NOPR at P 15.
---------------------------------------------------------------------------
31. More specifically, as explained below, the information that
would be posted by major non-interstate pipelines is ``information
about the availability and prices of natural gas sold at wholesale and
in interstate commerce.'' \65\ There is a relationship between capacity
and flow information on non-interstate pipelines and the interstate,
natural gas market because non-interstate flows affect the supply and
demand fundamentals that underlie the market. As explained below,
posted flow information from only interstate pipelines cannot provide a
complete picture of natural gas flows in the United States--or even of
those flows directly relevant to the pricing of natural gas flowing in
interstate commerce.\66\ To avoid such incompleteness, the Commission
sets forth the proposal to require major non-interstate pipelines to
post flow information. This proposal would provide a complete picture
of natural gas supply and demand fundamentals without the gaps that
would appear were the non-interstate pipelines excluded by section 1 of
the Natural Gas Act also excluded by section 23 of the Natural Gas Act.
In enacting section 23 of the Natural Gas Act, Congress sought to avoid
any such gaps in the transparency of the physical natural gas markets
by avoiding the legal distinctions set forth in section 1 of the
Natural Gas Act.
---------------------------------------------------------------------------
\65\ Section 23(a)(2) of the Natural Gas Act, 15 U.S.C. 717t-
2(a)(2) (2000 & Supp. V 2005).
\66\ See below at P 50-59.
---------------------------------------------------------------------------
2. Discussion: Section 1(b) of the Natural Gas Act
32. The Commission disagrees with commenters who argued that
section 1(b) of the Natural Gas Act precludes the Commission from
imposing the daily posting requirement on intrastate pipelines. Section
1(b) of the Natural Gas Act provides that the ``provisions of this
chapter * * * shall apply to the transportation of natural gas in
interstate commerce, to the sale in interstate commerce of natural gas
for resale * * *'' and that such provisions ``shall not apply to any
other transportation or sale of natural gas.'' \67\ These arguments
ignore the fact that, in section 23, Congress provided the Commission a
new and broad grant of authority that goes beyond prior Commission
jurisdiction over natural gas companies to facilitate transparency in
the wholesale natural gas markets.
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\67\ Section 1(b) of the Natural Gas Act, 15 U.S.C. 717(b).
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33. In stating that the Commission may obtain information from
``any market participant,'' \68\ Congress contemplated that the
transparency provisions would differ from other provisions of the
Natural Gas Act as to the entities covered by the Commission's
authority. Commenters' reliance on section 1 of the Natural Gas Act,
therefore, improperly ignores the intent of Congress to subject a
different set of entities to the Commission's
[[Page 1121]]
transparency authority as evidenced by Congress's use of the term ``any
market participant.'' In light of this intent, commenters' reliance on
case law setting forth the limits on the Commission's authority under
section 1 of the Natural Gas Act is misplaced.
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\68\ Section 23(a)(3) of the Natural Gas Act, 15 U.S.C. 717t-
2(a)(3) (2000 & Supp. V 2005).
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34. The Commission does not find persuasive the argument that
Congress could have expressed its intent to subject intrastate
pipelines to the Commission's transparency authority only by amending
section 1 of the Natural Gas Act. First, altering the exceptions in
section 1, as commenters suggested, is not the only way to alter the
statute to give the Commission transparency authority. Indeed, it would
have been more cumbersome for the Congress to take that approach.
Instead of that approach, the Commission interprets the addition of
section 23 as providing the Commission transparency authority over non-
interstate pipelines. This latter interpretation is the more reasonable
interpretation of section 23 and reflects Congress's intent to subject
non-interstate pipelines to only the Commission's transparency
authority. Second, it could be stated equally that if Congress intended
to exclude intrastate (or non-interstate) pipelines from the
Commission's authority under section 23 of the Natural Gas Act, it
would have used the term ``natural gas company'' in section 23, instead
of the term ``any market participant.''
35. Commenters' arguments that section 23 should be interpreted
consistent with pre-EPAct 2005 case law are likewise misplaced. Those
cases apply the jurisdictional limits set forth in section 1 of the
Natural Gas Act. These arguments run afoul of the principle of
statutory construction that ``Congress is presumed to be aware of an
administrative or judicial interpretation of a statute.'' \69\ Thus,
Congress was presumably aware that prior to the enactment of section
23, the Natural Gas Act, as explained by TPA, ``limit[ed] the gathering
of intrastate data to gathering it from companies falling under the
Commission's jurisdiction.'' \70\ In using the term ``any market
participant,'' Congress signaled its intent to expand the Commission's
transparency authority beyond the universe of natural gas companies to
which it would otherwise be limited.\71\
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\69\Lorillard v. Pons, 434 U.S. 575, 580 (1978) (internal
citations omitted); accord 2A Norman J. Singer, Sutherland Statutory
Construction sec. 45.12 (5th ed. 1992) (``legislative language will
be interpreted on the assumption that the legislature was aware of *
* * judicial decisions'').
\70\ Comments of Texas Pipeline Association at 13 (citing Union
Oil v. FPC, 542 F.2d 1036, 1039 (9th Cir. 1976)).
\71\ TPA observed that courts have held that the Commission
cannot exceed its statutory authority. Reply Comments of TPA at 16-
17 (citing Transmission Agency of Northern California v. FERC, 495
F.3d 663 (D.C. Cir. 2007) and United Distribution Cos. v. FERC, 88
F.3d 1105 (D.C. Cir. 1996)). This is an unremarkable and
unassailable conclusion, but one that provides no guidance where the
issue is not whether the Commission may exceed its statutory
authority but what is the extent of the Commission's transparency
authority.
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3. Discussion: Section 1(c) of the Natural Gas Act
36. Several commenters, including a state commission, contended
that the pipeline posting proposal as applied to intrastate pipelines
would improperly interfere with states' regulation of intrastate
pipelines as set forth in section 1(c) of the Natural Gas Act, commonly
known as the Hinshaw amendment. Section 1(c) of the Natural Gas Act
reads:
The provisions of this chapter shall not apply to any person
engaged in or legally authorized to engage in the transportation in
interstate commerce or the sale in interstate commerce for resale,
of natural gas received by such person from another person within or
at the boundary of a State if all the natural gas so received is
ultimately consumed within such State, or to any facilities used by
such person for such transportation or sale, provided that the rates
and service of such person and facilities be subject to regulation
by a State commission.\72\
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\72\ 15 U.S.C. 717(c).
The Commission's proposal does not impermissibly interfere with
states' regulation of Hinshaw pipelines. Under the Commission's
proposal, states will continue to regulate the rates and services of
those companies. As stated, section 23 of the Natural Gas Act does not
authorize the Commission to undertake such comprehensive regulation and
the Commission does not propose to do so. The Commission would require
only that non-interstate pipelines, including Hinshaw pipelines, post
information regarding their flows. Section 1(c) of the Natural Gas Act,
in light of the later enacted EPAct 2005, does not preclude such a
posting requirement.
4. Discussion: Other
37. The Commission disagrees with DCP's argument that the burden of
a posting requirement is related to the Commission's grant of a
certificate of convenience and necessity under section 7 of the Natural
Gas Act. DCP's argument ignores the mandate Congress set forth in the
transparency provisions for the Commission to facilitate transparency.
Nothing in section 23 indicates or even implies that the Commission's
transparency authority depends on whether a market participant has a
certificate of public convenience and necessity. Indeed, the use of the
modifier ``any,'' as discussed above, demonstrates that Congress had no
intention to limit the Commission authority to disseminate adequate
information about the natural gas market.
38. Contrary to commenters' assertions, the Commission's
interpretation of section 23 is consistent with the Commission's
interpretation of section 4A of the Natural Gas Act, which Congress
also enacted in EPAct 2005. In Order No. 670, the Commission stated
that Congress chose the undefined term ``any entity'' in section 4A as
a broader term than the existing defined term of ``natural gas
company.'' \73\ Similarly, in interpreting section 23, Congress chose
the undefined term ``any market participant'' in section 23 as a
broader term than the existing defined term ``natural gas company.''
Also, in Order No. 670, to determine the transactions subject to the
Commission's market manipulation authority, the Commission interpreted
the section 4A phrase ``in connection with'' broadly.\74\ To delineate
what type of information the Commission could obtain and disseminate,
in section 23 of the Natural Gas Act, Congress used the term ``about,''
which is a concept similarly as broad as the concept described by the
phrase ``in connection with.''
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\73\ Order No. 670 at P 18.
\74\ Section 4A of the Natural Gas Act reads:
It shall be unlawful for any entity, directly or indirectly, to
use or employ, in connection with the purchase or sale of natural
gas or the purchase or sale of transportation services subject to
the jurisdiction of the Commission, any manipulative or deceptive
device or contrivance * * * in contravention of [Commission] rules
and regulations.
15 U.S.C. 717t-2c-1 (2000 & Supp. V 2005). In Order No. 670, the
Commission observed that the Supreme Court interpreted the phrase
``in connection with'' broadly in interpreting section 10(b) of the
Securities Exchange Act. As noted in that order, section 4A
``closely track[s] the prohibited conduct language in section 10(b)
of the Securities Exchange Act of 1934, Securities Exchange Act of
1934, 15 U.S.C. 78j(b), and specifically dictate[s] that the terms
`manipulative or deceptive device or contrivance' '' are to be used
``as those terms are used in section 10(b) of the Securities
Exchange Act of 1934.'' Order No. 670 at P 6.
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39. The Commission's interpretation of section 23 is also
consistent with its holdings in Order No. 636.\75\ As described in
subsequent orders, the Commission has not ``requir[ed] intrastate
pipelines to introduce all the
[[Page 1122]]
features of open-access service that we have required of interstate
pipelines'' because requiring intrastate pipelines to do so ``could
make it unduly burdensome to participate in interstate markets,
contrary to the intent of the [Natural Gas Policy Act of 1978].'' \76\
Here, the Commission proposes to impose only a posting burden on non-
interstate pipelines that is equivalent to the posting requirements of
interstate pipelines. In other respects, the burden on non-interstate
pipelines remains far less than that on interstate pipelines in keeping
with the Natural Gas Policy Act of 1978. While in the past, the
Commission exempted intrastate pipelines from open-access requirements,
such as electronic bulletin boards,\77\ any change in that exemption
would be justified in order to further the Commission's transparency
goals as set forth in section 23 of the Natural Gas Act.
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\75\ See, e.g., Order No. 636, FERC Stats. & Regs. ] 30,939, at
30,406 (permitting, but not requiring intrastate pipelines, to offer
open-access, contract storage).
\76\ EPGT Texas Pipeline, L.P., 99 FERC ] 61,295, at 62,252
(2002).
\77\ Order No. 636-B, 61 FERC ] 61,272, at 61,992, n.26.
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40. Finally, the Commission recognizes commenters' concern that the
Commission's proposal could appear to lead to further regulation. As
explained above, however, the Commission's transparency authority over
non-interstate pipelines is limited to obtaining and disseminating
information. The Commission has no interest in comprehensive regulation
of non-interstate pipelines. The Commission reiterates, section 1 of
the Natural Gas Act continues to exclude non-interstate pipelines from
such comprehensive regulation.\78\
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\78\ 15 U.S.C. 717.
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III. Interstate Pipeline Posting Requirements
41. In the Initial NOPR, the Commission sought comment on whether
it should revise its posting requirements applicable to interstate
pipelines to require posting actual flow information.\79\ The
Commission raised the question because we proposed to require
intrastate pipelines to post actual flow information, a requirement
beyond that applied to interstate pipelines under Sec. 284.13(d)(1) of
the Commission's regulations, and because posting of actual flow
information could provide useful information regarding actual capacity
use, for instance, by giving insight into the use of no-notice
service.\80\ In this regard, Commission Staff observed that its ability
to monitor flows in the interstate pipeline system is limited in
certain locations, by the lack of actual flow information. In the case
of ``no-notice'' service,\81\ specifically, interstate pipeline
schedules do not reflect actual flows. Consequently, information about
interstate flows in areas using no-notice service is less useful. In
its comments on the Initial NOPR, the Natural Gas Supply Association
(NGSA) observed that, ``[o]n heating season peak days or days with wide
intra-day weather swings, no-notice volumes can be significant;
therefore, scheduled flow volumes are not a proxy for physical flow
and, thus, do not necessarily provide an accurate picture of underlying
market fundamentals.'' \82\ Similarly, Commission Staff observed that
the gap between scheduled and actual flows occurs most commonly in the
northern tier of the country, particularly where a pipeline serves a
local distribution company with significant space heating demand. In
such circumstances, market observers find it more difficult to ascribe
price behavior to physical changes in flows.
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\79\ Initial NOPR at P 43.
\80\ Initial NOPR at P 43.
\81\ See 18 CFR 284.7(a)(4).
\82\ NGSA Comments at 10.
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42. Public posting of information reflecting no-notice service
could also prevent other forms of misconduct with direct effects on
natural gas in interstate commerce. Commission investigations of
interstate and intrastate pipeline activity resulted in two settlements
in which the settling party admitted it sought to obtain and exploit
non-public storage inventory information to gain a competitive
advantage in wholesale gas markets.\83\ Though this proposal would make
public flow information, not storage information, the importance of the
non-public information is analogous. These admissions indicate that the
lack of public flow information provides the opportunity for parties to
engage in manipulative or unduly discriminatory behavior. By making
major non-interstate pipeline flow information public, such
transparency could discourage market participants from engaging in such
manipulative or unduly discriminatory activity.
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\83\ Dominion Resources, Inc., 108 FERC ] 61,110 (2004)
(Dominion Resources, DTI and DEC admit that DTI violated section
161.3(f) of the Commission's regulations, former 18 CFR 161.3(f)
(2003)); The Williams Companies, Inc., 111 FERC ] 61,392 (2005)
(Transco admits that it violated section 161.3(f) of the
Commission's regulations, former 18 CFR 161.3(f) (2002)).
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43. In this NOPR, the Commission proposes to require interstate
pipelines to post actual flow information in addition to the capacity
and scheduled flow information that interstate pipelines are currently
required to post. Accordingly, the Commission proposes adding to Sec.
284.13(d) this requirement: ``An interstate pipeline must also provide
in the same manner [as other information is provided] access to
information on actual flowing volumes at receipt points, on the
mainline, at delivery points, and in storage fields.'' \84\
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\84\ Proposed 18 CFR 284.13(d).
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44. In response to the Initial NOPR, several commenters supported
requiring interstate pipelines to post actual flow volumes.\85\ The
NGSA asserted that posting of actual flow data ``could lead to even
more accurate and near real-time indication of underlying market supply
and demand fundamentals'' \86\ The National Association of Royalty
Owners (NARO) contended that requiring interstate pipelines to post
actual flow volumes would allow an ``apples to apples'' comparison with
the postings of intrastate pipelines.\87\
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\85\ See, e.g., NGSA at 10; and Apache Corp. at 8-9.
\86\ NGSA Comments at 10.
\87\ NARO Comments at 4.
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45. The Interstate Natural Gas Association of America (INGAA)
opposed any proposal for interstate pipelines to post actual flows.
INGAA contended that: (1) Scheduled flows are adequate for market
participants to estimate demand and supply conditions in order to price
market transactions; (2) actual flows include operational data that is
not relevant and may be counterproductive, such as flows reflecting
maintenance activities, storage injection and withdrawal schedules,
line pack management, balancing at interconnects, and blending to meet
quality specifications not related to commercial flows and (3) the no-
notice activity that would be captured by posting actual flows does not
reflect trading activity, but rather reflects storage withdrawals.\88\
Williston Basin Interstate Pipeline Company (Williston) indicated that
scheduled flow volumes were adequate and actual volumes not
necessary.\89\
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\88\ INGAA Comments at 3-4.
\89\ Williston Reply Comments at 4.
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46. In order to effectively balance the benefits of the additional
flow information with the costs of such a requirement, the Commission
seeks further information regarding both the benefits of the additional
information available if actual flow volumes were posted by interstate
pipelines, and the costs imposed on interstate pipelines to develop and
post that information. In providing comments on this proposal, the
Commission encourages
[[Page 1123]]
commenters to support their comments by providing specific examples.
47. Regarding benefits, is information lost by not providing actual
flows? What is the extent of any such lost information? How extensive
is the use of no-notice service? Is information regarding operational
flows, such as flows reflecting maintenance activities, storage
injection and withdrawal schedules, line pack management, balancing at
interconnects, and blending to meet quality specifications, useful to
understand supply and demand fundamentals? Does the no-notice activity
that would be captured by posting actual flows reflect trading activity
or does it reflect storage withdrawals? Can trading activity and
storage withdrawals be considered as separate activities? How?
48. Regarding costs, how is actual flow information collected today
for operational, balancing, billing or other purposes? What process
changes, if any, would be required for interstate pipelines to post
actual flow information? How much time after flow would be required
before such information would be available for posting? Would posting
actual volumes reveal any information that might be harmful to any
competitive interests? How could it be harmful?
IV. Postings by Non-Interstate Pipelines
49. In the Initial NOPR, the Commission proposed to require certain
intrastate pipelines to post daily information regarding the capacity
and actual flows at major receipt and delivery points and mainline
segments. In the instant NOPR, the Commission proposes to require non-
interstate pipelines to post scheduled flow information in addition to
capacity and actual flow information.\90\ Only a ``major non-interstate
pipeline'' would be required to post information. For the purposes of
this NOPR, a ``major non-interstate pipeline'' is defined as one that
is not a ``natural gas company'' under section 1 of the Natural Gas Act
and that flows greater than 10 billion cubic feet of natural gas per
year, with two exceptions.\91\ The first exception is non-interstate
pipelines that fall entirely upstream of a processing plant.\92\ The
second exception is non-interstate pipelines that deliver more than
ninety-five percent (95%) of the natural gas volumes they flow directly
to end-users.\93\
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\90\ Proposed 18 CFR 284.14(a).
\91\ Proposed 18 CFR 284.1.
\92\ Proposed 18 CFR 284.14(b)(1).
\93\ Proposed 18 CFR 284.14(b)(2).
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A. Rationale
50. Through the information that would be obtained from the daily
posting requirement on major non-interstate pipelines, the Commission,
market participants, and the public could obtain a picture of daily
supply and demand conditions that directly affect U.S. wholesale
natural gas markets--a picture that is currently incomplete without
information from major non-interstate pipelines.\94\ Consequently, this
proposal to increase information from certain major non-interstate
pipelines would directly ``facilitate price transparency for the sale *
* * of physical natural gas in interstate commerce'' as authorized in
the natural gas transparency provisions.\95\
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\94\ In this section, the Commission reiterates its discussion
from the Initial NOPR.
\95\ Section 23(a)(1) of the Natural Gas Act, 15 U.S.C. 717t-
2(a)(1) (2000 & Supp. V 2005).
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51. The posted information from major non-interstate pipelines
would qualify as, in the words of the transparency provisions,
``information about the availability and prices of natural gas sold at
wholesale and in interstate commerce.'' \96\ Notwithstanding their
status under section 1 of the Natural Gas Act, most major non-
interstate pipelines today transport or buy and sell wholesale natural
gas that eventually enters or at least impacts the interstate natural
gas market. Further, supply and demand in non-interstate markets have a
direct effect on prices of gas destined for interstate markets because
both intrastate and interstate consumers draw on the same sources of
supply. This is the case because of the statutory, regulatory and
market changes that have taken place in the last three decades.
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\96\ Section 23(a)(2) of the Natural Gas Act, 15 U.S.C.A. 717t-
2(a)(2) (2000
