FERC Considers Changes To Posting Requirements

October 2009 Vol. 64 No. 10

However, it does not appear, based on FERC’s request for supplemental comments on July 16, that the agency is considering INGAA’s request. The “no notice” reporting issue is not even mentioned with regard to modifications FERC is open to making. Those basically revolve around the issue of whether major non interstates should have to post for virtual or pooling points, as opposed to physical metered points. The Texas Pipeline Association, which has led the fight for changes to Order 720, wants the posting requirement to apply at points where scheduling occurs. Another issue is use of design capacity as the method to determine whether a receipt or delivery point should be posted. Sometimes design capacity is unknown because a pipeline does not have access to design specifications or where the applicable point is not a physical meter, but rather a virtual or pooling receipt or delivery point. In that instance, Order 720 would allow major non interstates to utilize the maximum flow experienced during any day within the previous three years as a proxy for design capacity. Lastly, FERC wants to establish a “de minimis” exemption for receipt points, even if such points have a design capacity above the posting threshold.

Most of the pushback on 720 has some from major non interstates, generally companies which have subsidiaries, which are independent companies, in four or five states, none of them connected to one another. Larry Black, director of gas supply, Southwest Gas Corporation, appeared at a FERC technical conference in March to make that case. Southwest Gas has six operating divisions, none of whose systems connect to each other. “Four of the six divisions are relatively small and, independently, would fall well below the 50 million decatherm threshold,” said Black. “But more importantly, because of the size and the makeup of the market demands on them, reporting data pursuant to Order 720, would not really contribute any meaningful addition to the marketplace.”

Another issue for major non interstates is whether to include stub lines or gathering lines in the calculations. Roger Farrell, president and chief operating officer of Southern Union, says, “I believe that a gathering exemption would be warranted, but if you don't believe that a gathering exemption is warranted, I want to be very clear that we see points upstream of a gathering system that do not need to be reported, because they won't provide meaningful information to the Commission or to anyone else.”