On May 20, 2010, FERC revised the contract reporting requirements for both intrastate natural gas pipelines providing service under Section 311 under the Natural Policy Act and Hinshaw pipelines operating under Section 1(c) of the Natural Gas Act (“NGA”), effective April 1, 2011.  The new rule increases the frequency of reporting, covers more transactions, establishes a new form to be used for reporting, and considers all of the filings to be public information.  The Commission noted that the new rule is necessary to increase market transparency of intrastate and Hinshaw pipeline transactions while avoiding policies that dissuade participants from engaging in interstate markets.

Intrastate natural gas pipelines are defined as pipelines that operate entirely within a single state and are not subject to the Commission’s jurisdiction under the Natural Gas Act.  Hinshaw pipelines, by definition, also operate within a single state, but can receive gas from outside their state without becoming subject to the Commission’s NGA jurisdiction.  Historically, the Commission did not make intrastate and Hinshaw pipelines meet the same rigorous transactional reporting guidelines as interstate pipelines.  However, the Commission’s new rule was created to provide a more detailed and uniform account of intrastate and Hinshaw pipelines. 

Specifically, the applicable intrastate and Hinshaw pipelines will have to report on a quarterly basis instead of only an annual or semi-annual basis.  Under the new rule, the pipelines will fill out a new Form 549D, which will replace the older Form 549 Intrastate Pipeline Annual Transportation Report.  According to the Commission, the pipelines will have to report:

• rates charged by the pipeline under each contract;
• receipt and delivery points and zones or segments covered by each contract;
• the quantity of natural gas the shipper is entitled to transport, store, or deliver;
• the duration of the contract; and
• whether there is an affiliate relationship between the pipeline and the shipper.

The Commission also decided to modify the triennial rate review policy from every three years to every five years.  It did so in an effort to reduce the burden on the pipelines and the Commission, especially in light of the new quarterly electronic reporting requirement.  The review will still be conducted for both pipelines in order to ensure that the rates affecting interstate services remain fair and equitable. 

A copy of the rule is available on the Commission’s website at: http://www.ferc.gov/whats-new/comm-meet/2010/052010/G-1.pdf.