In an unusual move, on July 9, 2013, FERC announced that the Office of Enforcement will seek information from certain unnamed natural gas marketers concerning those marketers’ natural gas sales activities. These efforts appear to be connected with the Commission’s November 12, 2012 Notice of Inquiry (“NOI”) on Enhanced Natural Gas Market Transparency in Docket No. RM13-1-000 (see November 16, 2012 edition of the WER), and do not appear to be enforcement actions against the companies from whom information will be sought.
In the NOI, FERC stated it was considering whether certain quarterly reporting of natural gas transactions within the Commission’s Natural Gas Act (“NGA”) jurisdiction would provide “useful information for improving natural gas market transparency.” Specifically, the NOI described how FERC is considering requiring that market participants engaging in certain jurisdictional transactions that include physical delivery for next day gas or for next month gas to file quarterly reports in a standardized, electronic format. The quarterly reports would include various pieces of information detailing such transactions. The Commission explained in the NOI that it would be authorized to require reports under the transparency provisions of Section 23 of the NGA, and such reporting would help price transparency in the natural gas market.
The Commission received 34 comments, most of which opposed the imposition of reporting requirements and argued that reporting requirements would not enhance natural gas market transparency. Commenters attacked various parts of the proposal, but overall, indicated that the reporting requirements would place a significant burden on market participants. Commenters argued that the Commission can obtain sufficient market information from publicly available sources and in enforcement proceedings, and that the proposed reporting requirements would reveal detailed, commercially sensitive transaction information. Certain commenters also expressed concern that the NOI proposal could result in a reduction in data available to index publishers and harm the accuracy of published indices. Other commenters warned that a complicated reporting system could lead to inaccurate reporting, and resulting enforcement investigations and penalties. As a further weakness of the proposal, commenters stated that the requirement described in the NOI would only apply to a “small portion” of total natural gas sales, and some commenters indicated that it was nearly impossible to determine whether some transactions should be considered jurisdictional or not given the complex statutory and regulatory criteria.
In its July 9 notice, the Commission announced that it needed additional information to assess the merits of its proposal, and included its list of questions. The data requests will be sent to a non-public list of marketers, and those marketers may request confidential treatment of their responses; however, the Commission may later disclose the information provided in a summary or aggregated form.
A copy of the Notice is available here.