[Federal Register Volume 77, Number 225 (Wednesday, November 21, 2012)]
[Proposed Rules]
[Pages 69781-69785]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-28228]
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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.
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Federal Register / Vol. 77, No. 225 / Wednesday, November 21, 2012 /
Proposed Rules
[[Page 69781]]
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 152
[Docket No. RM13-1-000]
Enhanced Natural Gas Market Transparency
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Notice of Inquiry.
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SUMMARY: The Federal Energy Regulatory Commission (Commission) seeks
comments on what changes, if any, should be made to its regulations
under the natural gas market transparency provisions of section 23 of
the Natural Gas Act (NGA), as adopted in the Energy Policy Act of 2005
(EPAct 2005). In particular, the Commission is considering the extent
to which quarterly reporting of every natural gas transaction within
the Commission's NGA jurisdiction that entails physical delivery for
the next day (i.e., next day gas) or for the next month (i.e., next
month gas) would provide useful information for improving natural gas
market transparency.
DATES: Comments are due January 22, 2013.
ADDRESSES: You may submit comments, identified by docket number an in
accordance with the requirements posted on the Commission's Web site,
http://www.ferc.gov. Comments may be submitted by any of the following
methods:
Agency Web Site: Documents created electronically using
word processing software should be filed in native applications or
print-to-PDF format and not in a scanned format, at http://www.ferc.gov/docs-filings/efiling.asp.
Mail/Hand Delivery: Commenters unable to file comments
electronically must mail or hand deliver an original and copy of their
comments to: Federal Energy Regulatory Commission, Secretary of the
Commission, 888 First Street NE., Washington, DC 20426.
Instructions: For detailed instructions on submitting comments and
additional information on the rulemaking process, see the Comment
Procedures Section of this document.
FOR FURTHER INFORMATION CONTACT: Jamie Marcos (Legal Information),
Office of Enforcement, Federal Energy Regulatory Commission, 888 First
Street NE., Washington, DC 20426, (202) 502-6628,
[email protected].
Kamaria Martin (Technical Information), Office of Enforcement,
Federal Energy Regulatory Commission, 888 First Street NE., Washington,
DC 20426, (202) 502-8015, [email protected].
Issued November 15, 2012.
1. In this Notice of Inquiry, the Federal Energy Regulatory
Commission (Commission) seeks comments on what changes, if any, should
be made to its regulations under the natural gas market transparency
provisions of section 23 of the Natural Gas Act (NGA), as adopted in
the Energy Policy Act of 2005 (EPAct 2005).\1\ In particular, the
Commission is considering the extent to which quarterly reporting of
every natural gas transaction within the Commission's NGA jurisdiction
that entails physical delivery for the next day (i.e., next day gas) or
for the next month (i.e., next month gas) \2\ would provide useful
information for improving natural gas market transparency.
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\1\ Energy Policy Act of 2005, Public Law 109-5, Sec. 316, 119
Stat. 594 (2005) (EPAct 2005) (codified as 15 U.S.C. 717t-2).
\2\ Under section 1(b) of the NGA, the Commission has
jurisdiction to regulate the transportation and sale for resale of
natural gas in interstate commerce and any natural gas company
engaged in such transportation or sale. 15 U.S.C. 717(b). The
Commission's jurisdiction, however, does not extend to ``first
sales'' removed from the Commission's NGA section 1(b) jurisdiction
by the Wellhead Decontrol Act of 1989, sales of imported natural
gas, sales of imported liquefied natural gas, and sales and
transportation by NGA section 1(b)-(d) entities. See infra n.25.
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2. The Commission is considering amending its regulations pursuant
to the natural gas market transparency provisions added to the NGA by
EPAct 2005.\3\ Section 23 of the NGA directs the Commission ``to
facilitate price transparency in markets for the sale or transportation
of physical natural gas in interstate commerce'' and states that the
Commission may obtain ``information about the availability and prices
of natural gas sold at wholesale and in interstate commerce'' from
``any market participant.'' \4\ Thus, section 23 grants the Commission
the authority to require submission of information regarding the
availability and prices of wholesale physical natural gas in interstate
commerce as it is considering in this Notice of Inquiry. In addition,
section 4A of the NGA states that ``[i]t shall be unlawful for any
entity, directly or indirectly, to use or employ, in connection with
the purchase or sale of natural gas * * * subject to the jurisdiction
of the Commission, any manipulative or deceptive device or contrivance
* * * in contravention of such rules and regulations as the Commission
may prescribe as necessary in the public interest or for the protection
of natural gas ratepayers.'' \5\
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\3\ EPAct 2005 Sec. 316 (codified as 15 U.S.C. 717t-2).
\4\ Natural Gas Act Sec. 23, 15 U.S.C. 717t-2 (2006) (NGA Sec.
23). Section 23 of the NGA states: ``[(a)](2) The Commission may
prescribe such rules as the Commission determines necessary and
appropriate to carry out the purposes of this section. The rules
shall 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 to the Commission, State
commissions, buyers and sellers of wholesale natural gas, and the
public.
[(a)](3) The Commission may--(A) obtain the information
described in paragraph (2) from any market participant; and (B) rely
on entities other than the Commission to receive and make public the
information, subject to the disclosure rules in subsection (b). * *
*
(b)(1) Rules described in subsection (a)(2), if adopted, shall
exempt from disclosure information the Commission determines would,
if disclosed, be detrimental to the operation of an effective market
or jeopardize system security.
[(b)](2) In determining the information to be made available
under this section and the time to make the information available,
the Commission shall seek to ensure that consumers and competitive
markets are protected from the adverse effects of potential
collusion or other anticompetitive behaviors that can be facilitated
by untimely public disclosure of transaction-specific information.''
NGA Sec. 23.
\5\ Natural Gas Act Sec. 4A, 15 U.S.C. 717C-1 (2006) (NGA Sec.
4A).
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3. This Notice of Inquiry will assist the Commission in determining
whether additional changes should be made to its regulations under the
natural gas market transparency provisions of section 23 of the NGA, as
adopted in the EPAct 2005,\6\ and the appropriate scope and particulars
of any such changes.
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\6\ EPAct 2005, Public Law 109-58, 119 Stat. 594.
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[[Page 69782]]
I. Background
A. Commission Authority
4. EPAct 2005 amended the NGA by adding the natural gas market
transparency provisions at section 23.\7\ Section 23 of the NGA directs
the Commission ``to facilitate price transparency'' and grants it the
authority to ``prescribe such rules as the Commission determines
necessary and appropriate to carry out the purposes of this section
[23]'' and to obtain ``information about the availability and prices''
from ``any market participant,'' except for natural gas producers,
processors, or users with a de minimis market presence of natural gas
sold at wholesale in interstate commerce.\8\ In so doing, NGA section
23 requires that the Commission consider the degree of price
transparency provided by existing price publishers and trade processing
services, and rely on such publishers and services to the maximum
extent possible. In addition, any rules issued pursuant to NGA section
23 must 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 to the Commission, State
commissions, buyers and sellers of wholesale natural gas, and the
public.'' \9\ However, NGA section 23 also directs the Commission to
exempt from disclosure information that, if disclosed, would be
``detrimental to the operation of an effective market or [that would]
jeopardize system security,'' and ``to ensure that consumers and
competitive markets are protected from the adverse effects of potential
collusion or other anticompetitive behaviors that can be facilitated by
untimely public disclosure of proprietary trading information.'' \10\
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\7\ See EPAct 2005 Sec. 316 (codified as 15 U.S.C. 717t-2).
EPAct 2005 similarly amended the Federal Power Act. See EPAct 2005
Sec. 1281 (codified as 16 U.S.C. 824t) (amending the FPA to add the
Electricity Market Transparency Rules in section 220).
\8\ NGA Sec. 23.
\9\ Id. Sec. 23(a)(2).
\10\ Id. Sec. 23(b).
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5. In 2006 after EPAct 2005 added section 23 to the NGA, Commission
staff conducted an extensive outreach effort to formulate options for
implementing EPAct 2005's transparency provisions for wholesale natural
gas and electric markets. As a result, the Commission used its new
transparency authority to adopt additional filing and posting
requirements for the sale or transportation of physical natural gas in
interstate commerce in Order Nos. 704, 720, and 720-A.\11\
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\11\ Transparency Provisions of Section 23 of the Natural Gas
Act, Order No. 704, FERC Stats. & Regs. ] 31,260 (2007), order on
reh'g, Order No. 704-A, 73 FR 55726 (Sept. 26, 2008), FERC Stats. &
Regs. ] 31,275 (2008), order dismissing reh'g and clarification,
Order No. 704-B, 125 FERC ] 61,302 (2008) (Order No. 704) (``Without
confidence in the basic processes of price formation, market
participants cannot have faith in the value of their transactions,
the public cannot believe that the prices they see are fair, and it
is more difficult for the Commission to ensure that jurisdictional
prices are `just and reasonable.'''); see also Pipeline Posting
Requirements under Section 23 of the Natural Gas Act, Order No. 720,
73 FR 73494 (Dec. 2, 2008), FERC Stats. & Regs. ] 31,283, at P 3
(2008), order on reh'g, Order No. 720-A, 130 FERC ] 61,040 (2010)
(Order No. 720). The Commission has also exercised its authority to
issue rules pursuant the Electric Market Transparency Rules in
section 220 of the Federal Power Act. See Electricity Market
Transparency Provisions of Section 220 of the Federal Power Act,
Order No. 768, 77 FR 61896 (Oct. 11, 2012), FERC Stats. & Regs. ]
31,336 (2012) (Order No. 768) (extending Electric Quarterly Report
filing requirements additional market participants that are exempt
from the Commission jurisdiction under section 205 of the Federal
Power Act).
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6. Specifically, Order No. 704 requires that ``any buyer or seller
of more than a de minimis volume of natural gas report volumes of
relevant transactions in an annual filing using a new Form No. 552.''
\12\ In issuing Order No. 704, the Commission explained that the
``final rule will facilitate transparency of the price formation
process in natural gas markets by collecting information to understand
in broad terms the size of the natural gas market and the use of fixed
prices and of index prices.'' \13\
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\12\ Order No. 704, FERC Stats. & Regs. ] 31,260 at PP 2-3.
\13\ Id. P 7.
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7. In Order No. 720, the Commission required, pursuant to NGA
section 23, major non-interstate pipelines to post scheduled flow
information and information for each receipt and delivery point with a
design capacity greater than 15,000 MMBtu per day.\14\ Order No. 720
also requires interstate pipelines to post information regarding no-
notice service.\15\ The Commission also issued Order No. 720-A, which
broadly affirmed Order No. 720, but granted certain requests for
rehearing and clarification, including a finding that major non-
interstate pipelines must post scheduled flow data for virtual or
pooling points, subject to certain conditions. On appeal in Texas
Pipeline Association v. FERC, the Fifth Circuit Court of Appeals
vacated Order Nos. 720 and 720-A as the reporting requirements
contained therein applied to major non-interstate pipelines.\16\
However, the court's decision did not disrupt the reporting and posting
obligations of interstate pipelines.\17\
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\14\ Order No. 720, FERC Stats. & Regs. ] 31,283 at P 1.
\15\ Id.
\16\ Texas Pipeline Ass'n v. FERC, 661 F.3d 258 (5th Cir. 2011).
\17\ Order Granting Motion to Clarify Opinion, Texas Pipelines
Ass'n v. FERC, 661 F.3d 258 (Dec. 20. 2011).
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8. In addition to adding the natural gas market transparency
provisions to the NGA, EPAct 2005 also added section 4A, which
prohibits market manipulation in the natural gas markets and authorized
the Commission to prescribe rules ``as necessary in the public interest
or for the protection of natural gas ratepayers.'' \18\ Pursuant to
section 4A, the Commission issued Order No. 670, which added Part 1c to
the Commission's regulations \19\ setting forth rules that prohibit
market manipulation in the natural gas market.\20\ Since issuing Order
No. 670, the Commission has increased its efforts to prevent and detect
market manipulation. As part of that effort, the Commission has sought
to increase price transparency in the natural gas and electric markets
to deter manipulative activities \21\ and to obtain additional market
information to be able to better detect potential manipulative
activities.\22\
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\18\ EPAct 2005 Sec. 315 (codified as 15 U.S.C. 717c).
\19\ 18 CFR Part 1c (2012).
\20\ Prohibition of Energy Market Manipulation, Order No. 670,
FERC Stats. & Regs. ] 31,202 (2006).
\21\ See, e.g., Order No. 704, FERC Stats. & Regs. ] 31,260,
Order No. 720, FERC Stats. & Regs. ] 31,283, Order No. 768, FERC
Stats. & Regs. ] 31,336.
\22\ See, e.g., Order No. 768; Enhancement of Electricity Market
Surveillance and Analysis through Ongoing Electronic Delivery of
Data from Regional Transmission Organizations and Independent System
Operators, Order No. 760, 77 FR 26674, FERC Stats. & Regs. ] 31,330
(2012) (requiring each regional transmission organization and
independent system operator to electronically deliver to the
Commission, on an ongoing basis, data related to the markets that it
administers.)
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9. While Order Nos. 704 and 720 began the Commission's effort to
facilitate price transparency in the natural gas markets as directed by
Congress in EPAct 2005, the Commission has identified additional areas
of the natural gas market in which it believes increased transparency
may be necessary for market participants to better understand the
market activities that produce the prices that are reported to indices.
The additional information that may be necessary to facilitate price
transparency may also assist the Commission in detecting, and
ultimately deterring, market manipulation in the natural gas markets.
As a result, the Commission is now seeking comments on whether it
should amend its regulations to further facilitate price transparency
in the natural gas markets. In particular, the
[[Page 69783]]
Commission is considering proposing to require all market participants
engaged in sales of wholesale physical natural gas in interstate
commerce to report quarterly to the Commission every natural gas
transaction within the Commission's NGA jurisdiction that entails
physical delivery for the next day (i.e., next day gas) or for the next
month (i.e., next month gas).
B. Areas Identified To Increase Price Transparency in the Natural Gas
Markets
10. The Commission recognizes that some data are currently
available to assess the validity of price signals to the market and the
incentives for natural gas market manipulation. In particular, under
Order No. 704, natural gas market participants that buy or sell above
2.2 Bcf annually of wholesale natural gas for next day delivery or next
month delivery are required to report annually through Form No. 552
their annual sales and purchase volumes, by product (i.e., gas for next
day vs. next month delivery) and by transaction type (e.g., fixed and
index priced), and whether the specific transaction was reported to
natural gas index price publishers. These data may be reported either
by individual company affiliates as their traded volumes or by their
parent company as rolled-up aggregate volumes. The data reported
through Form No. 552 are publicly available.\23\ In addition to the
Form No. 552 data, the Commission receives tick data from the
Intercontinental Exchange (ICE) for physical and financial natural gas
transactions and natural gas futures tick data from NYMEX.\24\ These
tick data are also available to market participants. The Commission and
market participants also have access to some information about the
transactions that contribute to the formation of the daily and monthly
indices reported by Platts and the daily indices reported by Natural
Gas Intelligence. Additionally, the Commission surveys publicly
available scheduled flows on natural gas pipelines to discern
fundamental activities underpinning regional prices.
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\23\ Order No. 704, FERC Stats. & Regs. ] 31,260.
\24\ ``Tick data'' refers to market data that shows the price
and volume of every consummated trade.
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11. However, the information that is currently available does not
provide full market visibility or price transparency. Much of the data
that is currently available is aggregated and does not provide
transaction-specific details. For example, the transactional details of
off-exchange transactions of physical natural gas are unavailable.
Similarly, the data available through Form No. 552 reporting do not
include information on price, date, location, or counterparty. The
buyers and sellers who report through Form No. 552 are only required to
report those monthly transactions that are conducted during bid week
for next calendar month delivery. And, while buyers and sellers report
whether a transaction was reported to an index publisher, they do not
identify the index publisher to whom the transaction was reported.
Moreover, the publicly available information on scheduled natural gas
pipeline flows is also only available in an aggregated format.
12. The Commission is considering amending its regulations to
provide greater natural gas market transparency and to assist the
Commission in detecting potential manipulation. Specifically, the
Commission is considering whether requiring all market participants
engaged in sales of wholesale physical natural gas in interstate
commerce to report quarterly to the Commission every natural gas
transaction within the Commission's NGA jurisdiction that entails
physical delivery for the next day (i.e., next day gas) or for the next
month (i.e., next month gas) will improve natural gas market
transparency.\25\ In particular, the Commission is considering
requiring market participants to report the following data elements for
all jurisdictional transactions that entail physical delivery for the
next day (i.e., next day gas) or for the next month (i.e., next month
gas), in a standardized, electronic format and on a quarterly basis:
Name, address, and contact information of the trading company, name and
location of its holding company, product traded (i.e., next day-
delivery natural gas and next month-delivery natural gas), trade
execution method (i.e., exchange or off-exchange, and name of exchange
or broker) and settlement type (e.g., fixed or index priced), volume
(in MMBtu) of natural gas traded, location (hub), price, and date and
time of the transaction, name of the counterparty, and the name(s) of
the Index publisher(s) to which each transaction was reported.
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\25\ As noted above, supra n.2, the Commission has jurisdiction
to regulate the transportation and sale for resale of natural gas in
interstate commerce and any natural gas company engaged in such
transportation or sale. 15 U.S.C. 717(b). The Commission's
jurisdiction, however, does not extend to ``first sales'' removed
from the Commission's NGA section 1(b) jurisdiction by the Wellhead
Decontrol Act of 1989, and sales and transportation by NGA sections
1(c) and (d) entities. The term ``first sale'' is defined in section
2(21) of the Natural Gas Policy Act of 1978. Section 2(21) sets
forth a general rule that all sales in the chain from the producer
to the ultimate consumer are ``first sales'' until the gas is
purchased by an interstate pipeline, an intrastate pipeline, or an
LDC. If an interstate pipeline, intrastate pipeline, or LDC
purchases the gas, no subsequent sale of that gas is a ``first
sale.'' In addition, sales by an interstate pipeline, intrastate
pipeline, LDC, or their affiliates are not ``first sales,'' unless
the sale is attributable to volumes produced by the pipeline, LDC or
any affiliate. See In the Matter of Amendments to Blanket Sales
Certificates, 107 FERC ] 61,174, at PP 19-28 (2004). NGA section
3(b)(1) also provides that the importation of natural gas from a
nation with which there is in effect a free trade agreement and the
importation of liquefied natural gas shall be treated as a first
sale within the meaning of NGPA section 2(21). 15 U.S.C. 717b(b)(1).
The Commission is not currently considering requiring reporting of
those sales of natural gas that have been excluded from its NGA
section 1(b) jurisdiction.
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13. As the Commission is considering whether it should amend its
regulations pursuant to NGA section 23, it is also considering whether
it should disseminate any transactional data that it would collect
publicly to comply with section 23's requirement that any rules issued
pursuant to section 23 provide for timely public dissemination of
information about the availability and prices of natural gas.\26\
Specifically, the Commission is considering releasing the transactional
information to the public on a quarterly basis, one month after it is
reported to the Commission.
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\26\ NGA Sec. 23(a)(2).
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14. The Commission believes such regular reporting of every natural
gas transaction within the Commission's NGA jurisdiction that entails
physical delivery for the next day or for the next month would
facilitate price transparency in the natural gas market by enabling
buyers and sellers of natural gas to better understand the trading and
prices that contribute to the daily and monthly indices. Market
participants lack a complete understanding of the actions that produce
the prices that are reported to the indices. Increased confidence in
these indices requires greater transparency to assure prices are a
result of fundamental supply and demand forces and not the result of
manipulation or other abusive market conduct.
15. Furthermore, obtaining such information would significantly
increase the information available to the Commission concerning
transactions in the natural gas markets thereby enhancing its ability
to identify the potential for manipulation in the natural gas markets,
to examine more efficiently the manipulative behavior, and to assess
the effects of manipulation.
II. Questions
16. The Commission invites all comments on the best approaches to
enhance the Commission's surveillance of natural gas markets and
transparency. In particular, the Commission requests
[[Page 69784]]
comment as to what extent market transparency would be enhanced by
requiring market participants to report the transactional data it is
considering. The Commission also asks commenters to respond to the
following questions.
(A) Questions Related to the Type of Transactional Information the
Commission Should Consider Requiring Market Participants To Report
17. Data received through exchanges and collected through other
Commission reports neither provide full market visibility necessary for
surveillance purposes nor facilitate price transparency, because much
of it is only available in an aggregate format without transaction-
specific details. Thus, the Commission is considering requiring market
participants to report key data elements for all jurisdictional sales
of wholesale physical natural gas in interstate commerce that entail
physical delivery for the next day (i.e., next day gas) or for the next
month (i.e., next month gas), in a standardized, electronic format and
on a quarterly basis. Such key elements could include name, address and
contact information of the trading company, name and location of its
holding company, product traded (i.e., next day-delivery natural gas
and next month-delivery natural gas), trade execution method (i.e.,
exchange or off-exchange, and name of exchange or broker) and
settlement type (e.g., fixed or index priced), volume (in MMBtu) of
natural gas traded, location (hub), price, and date and time of the
transaction, name of the counterparty, and the name(s) of the Index
publisher(s) to which each transaction was reported. With this context,
the Commission requests comments on the following questions:
(1) What specific data elements should the Commission require to be
filed? Should the key data elements noted above be required to be
included in such submission or are there additional data elements the
Commission should require? Explain why or why not. Are there data
elements that the Commission should not require to be reported for
commercial or burden reasons? If so, explain why.
(2) Should the Commission collect this data on a quarterly basis?
If not, which other reporting frequency should be considered by the
Commission and why (i.e. monthly, semi-annually, annually)?
(3) Should the Commission limit the transactional reporting
requirements being considered to near-term delivery (i.e., next-day and
next-month delivery physical natural gas products) or should the
Commission consider reporting requirements for other products as well
(i.e., intra-day, balance of month, other non-next day delivery strips,
exercised next-month gas options, and/or futures that have delivery
obligations beyond prompt month)? Explain why or why not.
(B) Questions Related to Possible Public Dissemination
18. In order to satisfy section 23's requirement that the
information obtained through rules issued pursuant to section 23 be
publicly disseminated on a timely basis,\27\ the Commission is
considering whether and how to publicly disseminate any transactional
data collected. In particular, the Commission is considering releasing
all of the information submitted quarterly, one month after it is
submitted to the Commission. For example, transactions completed from
January 1 through March 31 would be reported by May 1. Data collected
through this process would provide a timely retrospective view of the
trading activities. Thus, the Commission requests comment on the
following questions:
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\27\ NGA Sec. 23(a)(2). Section 23 also requires the Commission
to consider whether public dissemination of this information could
be detrimental to the operation of an effective market or jeopardize
system security. Id. Sec. 23(b)(1). Moreover, the Commission must
also seek to ensure that consumers and competitive markets are
protected from the adverse effects of anticompetitive behavior that
could be facilitated by untimely disclosure of transactional
information. Id. Sec. 23(b)(2).
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(1) Which of the key data elements mentioned above in paragraph 17,
if any, should be made public? Explain why the Commission should or
should not make certain data elements public.
(2) Should the Commission mask, aggregate, or modify the reported
data in any manner prior to public dissemination? Explain why the
collected data should or should not be masked, aggregated, or modified.
(3) If commercial sensitivity is an issue, is there an appropriate
time lag for making information available (i.e., one month, two
months)? What are the competitive impacts of publicly disseminating the
transactional data being considered by the Commission on a lagged
basis? Would public disclosure of transactional data negatively affect
the competitiveness of market participants? Provide a detailed
explanation as to why public disclosure of transactional data would or
would not negatively affect the competitiveness of market participants.
(C) Questions Related to the Scope of the Transactional Reporting
Requirement Being Considered by the Commission
19. As noted above, the Commission is considering limiting the
scope of the reporting requirement to only natural gas sales within the
Commission's NGA section 1(b) jurisdiction that entail physical
delivery for the next day or next month. Under section 1(b) of the NGA,
the Commission has jurisdiction to regulate the transportation and sale
for resale of natural gas in interstate commerce and any natural gas
company engaged in such transportation or sale.\28\ The Commission's
jurisdiction, however, does not extend to ``first sales,'' which were
removed from the Commission's NGA section 1(b) jurisdiction by the
Wellhead Decontrol Act, and sales and transportation by NGA section
1(c)-(d) entities.\29\ Thus, the Commission is considering not
requiring reporting of information relating to transactions that are
outside of the Commission's NGA section 1(b) jurisdiction. The
Commission, therefore, requests comment on the following questions:
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\28\ 15 U.S.C. 717(b).
\29\ See supra n.25.
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(1) Should the Commission consider including all sales ``at
wholesale and in interstate commerce'' \30\ in the reporting
requirement being considered by the Commission, including any such
sales removed from the Commission's NGA section 1(b) jurisdiction by
the Wellhead Decontrol Act of 1989? Explain why or why not.
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\30\ NGA Sec. 23(a)(2).
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(2) How could the Commission minimize any difficulties in
determining whether a sale is subject to the Commission's NGA section
1(b) jurisdiction?
(3) What would be the commercial impacts, if any, of limiting the
reporting requirement to sales subject to the Commission's NGA section
1(b) jurisdiction? Would the benefits of increased market transparency
from requiring the reporting of jurisdictional sales outweigh any
disadvantages of limiting the reporting requirement to such sales?
(D) Questions Regarding the Burden to Market Participants
20. The Commission recognizes that there would be some burden to
market participants in instituting this requirement to report
transactional data as discussed in this Notice of Inquiry. As such, the
Commission is considering several conditions to the reporting
requirements that would help to
[[Page 69785]]
alleviate some of the burden. For example, the Commission recognizes
that companies already gather data and report in Form No. 552, the
Annual Report of Natural Gas Transactions, which requires reporting of
information on an annual, aggregated basis that is similar to the
information that the Commission is now, in this Notice of Inquiry,
considering to require be reported on a quarterly, transaction-specific
basis. However, after several years of receiving and analyzing annual,
aggregated information through Form No. 552, the Commission believes
that it may be necessary for market participants to report more
granular transaction-specific information on a more frequent basis to
increase natural gas price transparency and to assist in the
Commission's surveillance efforts. Therefore, in order to alleviate any
additional burden to market participants, the Commission is considering
discontinuing the existing public data reporting requirements through
Form No. 552, after a full year of individual transactions data are
reported to the Commission. Additionally, the Commission is considering
instituting a de minimis volume for which market participants are
required to report to the Commission.
(1) What would the burden be on market participants to adapt their
existing systems to be able to provide the information in compliance
with new reporting requirements for market participants engaged in
sales of wholesale physical natural gas in interstate commerce above a
de minimis volume to report to the Commission every natural gas trade
within the Commission's NGA jurisdiction that entails physical delivery
for the next day (i.e., next day gas) or for the next month (i.e., next
month gas)? Estimate the incremental burden of reporting such
transactional data on a quarterly basis given that much of the same
information is currently gathered for and reported annually through
Form No. 552. Estimate the initial reporting burdens (start up time and
resources) as well as the ongoing reporting burden that would be
necessary for market participants to comply with the reporting
requirement being considered, the percentage of those additional costs
compared with normal business operation costs, and provide an
explanation and support for any estimate. Is there an additional burden
for those market participants who do not report to index publishers
versus those who do?
(2) If the Commission decides to require transaction-specific
reporting as it is considering in this Notice of Inquiry, should the
Commission discontinue the existing public data reporting requirements
through Form No. 552, initiated by Order No. 704, after a full year of
individual transaction data are reported to the Commission? What would
be the benefits and drawbacks with regard to market transparency of
collecting only one or both data sets?
(3) Should the Commission establish a threshold up to which market
participants with a de minimis market presence would not be subject to
the reporting requirements? The Annual Report of Natural Gas
Transactions, Form No. 552, collects information from market
participants that sold and purchased 2.2 Bcf or more of physical gas in
the reporting year. Should the Commission establish a similar threshold
for the reporting requirements being considered in this NOI? If so,
what is a reasonable threshold and on what basis should it be
established (i.e., by total quarterly sales and purchases, prior year's
annual sales and purchases)?
III. Comment Procedures
21. 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 January 22, 2013. Comments must refer to
Docket No. RM13-1-000, and must include the commenter's name, the
organization they represent, if applicable, and their address in their
comments.
22. The Commission encourages comments to be filed electronically
via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing
formats. Documents created electronically using word processing
software should be filed in native applications or print-to-PDF format
and not in a scanned format. Commenters filing electronically do not
need to make a paper filing.
23. Commenters that are not able to file comments electronically
must mail or hand deliver an original and copy of their comments to:
Federal Energy Regulatory Commission, Secretary of the Commission, 888
First Street NE., Washington, DC 20426.
24. 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.
IV. Document Availability
25. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through FERC's Home Page (http://www.ferc.gov) and in FERC's
Public Reference Room during normal business hours (8:30 a.m. to 5:00
p.m. Eastern time) at 888 First Street, NE., Room 2A, Washington, DC
20426.
26. From FERC's Home Page on the Internet, this information is
available on eLibrary. The full text of this document is available on
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or
downloading. To access this document in eLibrary, type the docket
number excluding the last three digits of this document in the docket
number field.
27. User assistance is available for eLibrary and the FERC's Web
site during normal business hours from FERC Online Support at 202-502-
6652 (toll free at 1-866-208-3676) or email at
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at
[email protected].
By direction of the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2012-28228 Filed 11-20-12; 8:45 am]
BILLING CODE 6717-01-P