125 FERC ¶ 61,190 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Part 284 

Docket No. RM09-2-000 

Contract Reporting Requirements of Intrastate Natural Gas Companies 

(Issued November 20, 2008) 

AGENCY: Federal Energy Regulatory Commission. 

ACTION: Notice of Inquiry. 

SUMMARY: The Federal Energy Regulatory Commission is considering whether to 

revise its contract reporting requirements for those natural gas pipelines that fall under 

the Commission’s jurisdiction pursuant to section 311 of the Natural Gas Policy Act of 

1978 or section 1(c) of the Natural Gas Act. This Notice of Inquiry will assist the 

Commission in determining what changes, if any, should be made to its regulations. 

COMMENT DATE: Comments are due [insert date that is 60 days after publication in 

the FEDERAL REGISTER]. 

ADDRESSES: You may submit comments on the Notice of Inquiry, identified by 

Docket No. RM09-2-000, by one of the following methods: 

• Agency web site: http://www.ferc.gov. Follow instructions for submitting 

comments via the eFiling link found in the Comment Procedures Section of the 

preamble. 

• Mail: Commenters unable to file comments electronically must mail or hand 
deliver an original and 14 copies of their comments to the Federal Energy 

Regulatory Commission, Secretary of the Commission, 888 First Street, N.E., 

Washington, D.C. 20426. Please refer to the Comment Procedures Section of the 

preamble for additional information on how to file paper comments. 

FOR FURTHER INFORMATION CONTACT: 

 

Vince Mareino (Legal Information) 

Office of the General Counsel 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

(202) 502-6167 

Vince.Mareino@ferc.gov 

Brian White (Technical Information) 

Office of Energy Markets Regulation 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

(202) 502-8332 

Brian.White@ferc.gov 

SUPPLEMENTARY INFORMATION: 
 

125 FERC ¶ 61,190 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Before Commissioners: Joseph T. Kelliher, Chairman; 

 Suedeen G. Kelly, Marc Spitzer, 

 Philip D. Moeller, and Jon Wellinghoff. 

Contract Reporting Requirements Docket No. RM09-2-000 

of Intrastate Natural Gas Companies 

NOTICE OF INQUIRY 

(Issued November 20, 2008) 

1. In this Notice of Inquiry, the Federal Energy Regulatory Commission 

(Commission) seeks comments on whether the Commission should impose additional 

reporting requirements on (1) intrastate pipelines providing interstate services pursuant to 

section 311 of the Natural Gas Policy Act of 1978 (NGPA)1

 and (2) Hinshaw pipelines 

providing interstate services subject to the Commission’s Natural Gas Act (NGA) 

jurisdiction pursuant to blanket certificates issued under § 284.224 of the Commission’s 

regulations.2

 In particular, the Commission is interested in exploring whether it should 

1

 15 U.S.C. 3372. 

2

 Section 1(c) of the NGA exempts from the Commission’s NGA jurisdiction 

pipelines which transport gas in interstate commerce if (1) they receive natural gas at or 

within the boundary of a state, (2) all the gas is consumed within that state and (3) the 

pipeline is regulated by a state Commission. This exemption is referred to as the 

Hinshaw exemption after the Congressman who introduced the bill amending the NGA to 

include section 1(c). See ANR Pipeline Co. v. Federal Energy Regulatory Comm’n, 71 

 (continued...) 
Docket No. RM09-2-000 - 2 -

require section 311 and Hinshaw pipelines to post the details of their transactions with 

individual shippers in a manner more comparable to the reporting requirements 

applicable to interstate pipelines under § 284.13(b) of the Commission’s Regulations.3

 

I. Background

2. NGPA section 311 authorizes the Commission to allow intrastate pipelines to 

transport gas “on behalf of” interstate pipelines or local distribution companies served by 

interstate pipelines “under such terms and conditions as the Commission may 

prescribe.”4

 NGPA section 601(a)(2) exempts transportation service authorized under 

NGPA section 311 from the Commission’s Natural Gas Act (NGA) jurisdiction. 

Congress adopted these provisions in order to eliminate the regulatory barriers between 

the intrastate and interstate markets and to promote the entry of intrastate pipelines i

the interstate market. Such entry eliminates the need for duplication of facilities between 

interstate and intrastate pipelines. Shortly after the adoption of the NGPA, the 

Commission authorized Hinshaw pipelines to apply for NGA section 7 certificates 

nto 

 

F.3d 897, 898 (1995) (briefly summarizing the history of the Hinshaw exemption). 

3

 18 CFR 284.13(b). 

4

 15 U.S.C. 3371(c). 
Docket No. RM09-2-000 - 3 -

state 

r NGPA section 311.5

 

 

authorizing them to transport gas in interstate commerce in the same manner as intra

pipelines may do unde

3. Subpart C of the Commission’s Part 284 open access regulations (18 CFR 284.121-

126) implements the provisions of NGPA section 311 concerning transportation by 

intrastate pipelines. Section 284.224 of the regulations provides for the issuance of 

blanket certificates to Hinshaw pipelines to provide open access transportation service “to 

the same extent that, and in the same manner” as intrastate pipelines are authorized to 

perform such service by Subpart C. 

4. The Part 284, Subpart C, regulations require that intrastate pipelines performing 

interstate service under NGPA section 311 must do so on an open access basis.6

 

However, consistent with the NGPA’s goal of encouraging intrastate pipelines to provide 

interstate service, the Commission has not imposed on intrastate pipelines all of the Part 

284 requirements imposed on interstate pipelines. For example, when the Commission 

first adopted the Part 284 open access regulations in Order No. 436, the Commission 

exempted intrastate pipelines from the requirement that they offer open access service on 

5 Certain Transportation, Sales, and Assignments by Pipeline Companies not 

Subject to Commission Jurisdiction Under Section 1(c) of the Natural Gas Act, Order 

No. 63, FERC Stats. & Regs. ¶ 30,118, at 30,824-25 (1980). 

6 See 18 CFR 284.7(b), 284.9(b) and 284.122. 
Docket No. RM09-2-000 - 4 -

 

a firm basis.7

 The Commission found that requiring intrastate pipelines to offer firm 

service to out-of-state shippers could discourage them from providing any interstate 

service, because such a requirement could progressively turn the intrastate pipeline into 

an interstate pipeline against its will and against the will of the responsible state 

authorities. Similarly, Order No. 636-B exempted intrastate pipelines from the 

requirements of Order No. 636.8

 Those requirements included capacity release, 

electronic bulletin boards (now internet websites), and flexible receipt and delivery 

points. 

5. In Order No. 637,9

 the Commission modified the Part 284 regulations applicable to 

interstate pipelines in a number of ways. Among other things, the Commission revised 

7 Regulation of Natural Gas Pipelines After Partial Wellhead Decontrol, Order 

No. 436, FERC Stats. & Regs. ¶ 30,665, at 31,502 (1985). 

8 Pipeline Service Obligations, and Revisions to Regulations Governing SelfImplementing Transportation Under Part 284 of the Commission's Regulations; 

Regulation of Natural Gas Pipelines After Partial Wellhead Decontrol, Order No. 636-B, 

61 FERC ¶ 61,272, at 61,992 n.26 (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). 

9 Regulation of Short-Term Natural Gas Transportation Services and Regulation 

of Interstate Natural Gas Transportation Services, Order No. 637, FERC Stats. & Regs. 

¶ 31,091, clarified, Order No. 637-A, FERC Stats. & Regs. ¶ 31,099, reh’g denied, Order 

No. 637-B, 92 FERC ¶ 61,062 (2000), aff’d in part and remanded in part sub nom. 

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).
Docket No. RM09-2-000 - 5 -

the reporting requirements for interstate pipelines in order to provide more transparent 

pricing information and to permit more effective monitoring for the exercise of market 

power and undue discrimination. Section 284.13(b), as adopted by Order No. 637, 

requires interstate pipelines to post on their internet websites basic information on each 

transaction with individual shippers. Interstate pipelines must post on their website the 

following details about new transactions, including revisions to a contract, no later than 

the first nomination under a transaction: 

• The name of the shipper 

• The contract number (for firm service) 

• The rate charged 

• The maximum rate 

• The duration (for firm service) 

• The receipt and delivery points and zones covered 

• The quantity of gas covered 

• Any special terms or details, such as any deviations from the tariff 

• Whether any affiliate relationship exists. 

6. Section 284.13(c) of the Commission’s regulations also requires interstate pipelines 

to file with the Commission on the first business day of each calendar quarter an index of 

its firm transportation and storage customers and to publish the same information on their 

website. The information required to be included in the Index of Customers does not 

include the rates paid by the customers. Section 284.13(d) requires interstate pipelines to 
Docket No. RM09-2-000 - 6 -

 

provide on their websites “equal and timely access to information relevant to the 

availability of all transportation services whenever capacity is scheduled.” Section 

284.13(e) requires interstate pipelines to file semi-annual reports of their storage injection 

and withdrawal activities, including the identities of the customers, the volumes into and 

withdrawn from storage for each customer and the unit charge and total revenues 

received. 

7. Order No. 637 did not modify the reporting requirements for NGPA section 311 

intrastate pipelines and Hinshaw pipelines provided in § 284.126(c) of the Commission’s 

regulations. That section only requires section 311 and Hinshaw pipelines to file semiannual reports of their storage injection and withdrawal activity. The reports must be 

filed within 30 days of the end of each complete injection and withdrawal period and 

must include: the identity of each customer injecting or withdrawing gas from storage; 

the docket where the storage injection or withdrawal rates were approved; the maximum 

storage quantity and daily withdrawal quantity applicable to each customer; the volumes 

each customer injected or withdrew from storage; and the unit charge and total revenues 

received from each customer during the injection/withdrawal period. Section 284.126(b) 

of the Commission’s regulations requires section 311 pipelines to make similar reports 

concerning their transportation services on an annual basis.10 

 (continued...) 

10 Some section 311 intrastate storage and transportation operators submit these 
Docket No. RM09-2-000 - 7 -

 

8. Recently, an interstate storage provider with market-based rates, SG Resources 

Mississippi, L.L.C. (SGRM) filed a request for waiver of the §§ 284.13(b)(1)(iii) and 

(b)(2)(ii) requirements that interstate pipelines post the rates charged in firm and 

interruptible transactions no later than first nomination for service.11 SGRM requested 

the waiver for both itself and all interstate storage providers with market-based rates. It 

contended that the mandatory disclosure of commercially sensitive pricing information 

provides prospective customers and competitors, such as NGPA section 311 intrastate 

storage providers that are not subject to this disclosure, with an unfair competitive 

advantage. In the alternative, SGRM requested that the Commission initiate a 

rulemaking proceeding to determine whether the Commission’s regulations should be 

modified to exempt storage providers authorized to charge market-based rates from the 

relevant portions of the Internet posting regulations. A number of other interstate storage 

providers with market-based rates filed comments in support of SGRM’s requests. A 

number of natural gas industry trade associations and a natural gas commodities trading 

firm filed in opposition of SGRM’s request. 

reports subject to a request for privileged treatment under §§ 388.112 or 385.1112 of the 

Commission’s regulations. In such instances, the reports are treated as privileged at least 

until another party asks that they be made public. 

11 See Docket No. RP08-606-000, SGRM September 3, 2008 Petition. 
Docket No. RM09-2-000 - 8 -

 

9. In a contemporaneous order, the Commission is denying the request for waiver and 

the alternative petition for a rulemaking proceeding.12 In that order, the Commission 

finds that the fact some interstate storage companies have been authorized to charge 

market-based rates does not justify exempting them from the requirements in § 284.13(b) 

that they post the rates charged in each storage transaction. The Commission explains 

that Order No. 637 adopted the posting requirements for the purpose of enabling the 

Commission and shippers to monitor market-based rate transactions, as well as costbased transactions, for undue discrimination and preference and to promote competition 

through price transparency. As the Commission stated in Order No. 637: 

The reporting of detailed transactional information is necessary because the 

Commission is modifying its method of regulating the natural gas industry 

by replacing traditional regulatory controls, such as the price cap on shortterm capacity releases, with competition. Thus, greater transactional 

information is necessary to ensure that competition flourishes, and that 

market power and undue discrimination remain in check in the new 

competitive environment. . . . The Commission finds it axiomatic that 

greater, more complete and detailed information about transactions will 

greatly improve shippers’ ability to make informed decisions, and both 

shippers’ and the Commission’s ability to monitor the market.[13] 

10. In addition, the Commission rejects SGRM’s contention that it should not require 

the transactional data to be made public, because such disclosure could cause competitive 

harm. The Commission finds that, while disclosure of the transactional information may 

12 SGRM, 125 FERC ¶ 61,191 (2008). 

13 Order No. 637-A, FERC Stats. & Regs. ¶ 31,099 at 31,612-3. 
Docket No. RM09-2-000 - 9 -

cause some commercial disadvantage to individual entities, it benefits the market as a 

whole, by improving efficiency and competition.14 The Commission also finds that 

SGRM’s request that the Commission permit storage providers to report their prices only 

to the Commission, and not publicly disclose them, is contrary to NGA section 4(c)’s 

requirement that “every natural gas company . . . keep open . . . for public inspection . . . 

all rates.”15

II. Discussion

11. While the Commission is rejecting SGRM’s waiver request and reaffirming that all 

interstate pipelines must post the information required by § 284.13(b) of the 

Commission’s regulations, the Commission is issuing this Notice of Inquiry to consider 

(1) whether the disparate reporting requirements for interstate and NGPA section 311 

and Hinshaw pipelines have an adverse competitive effect on the interstate pipelines and 

(2) if so, whether the Commission should modify the posting requirements for 

section 311 intrastate pipelines and Hinshaw pipelines in order to make them more 

comparable to the § 284.13(b) posting requirements for interstate pipelines. 

12. SGRM and other interstate storage providers with market-based rates have raised a 

concern that our disparate reporting requirements for interstate pipelines and section 311 

 14 SGRM, 125 FERC ¶ 61,191 at P 32-33. 

15 15 U.S.C. 717c(c). 
Docket No. RM09-2-000 - 10 -

 

intrastate pipelines may provide the intrastate pipelines with a competitive advantage. 

Although the interstate storage providers have sought to remedy any competitive 

disadvantage by seeking an exemption from the § 284.13(b) price disclosure 

requirements, an alternative remedy would be to extend the interstate reporting 

requirements to NGPA section 311 and Hinshaw pipelines. 

13. The Commission recognizes that “Congress intended that intrastate pipelines 

should be able to compete in the transportation market without bearing the burden of full 

regulation by FERC under the Natural Gas Act.”16 Consistent with that fact, the 

Commission has not extended all of the Part 284 open access requirements to NGPA 

section 311 intrastate pipelines or to Hinshaw pipelines. However, the U.S. Court of 

Appeals for the District of Columbia Circuit has also held that the Commission “must 

provide a reasonable justification for excluding” an intrastate pipeline from a requirement 

that binds interstate pipelines.17 Similarly, the Commission has held that it may grant 

intrastate facilities “additional flexibility,” but not if lighter regulation would “harm any 

party [or] impede the Commission’s goal of fostering a national pipeline grid.”18

16 Mustang Energy Corp. v. Federal Energy Regulatory Comm’n, 859 F.2d 1447, 

1457 (10th Cir. 1988), cert. denied, 490 U.S. 1019 (1988); see also EPGT Texas Pipeline, 

99 FERC ¶ 61,295 (2002). 

17 ANR v. FERC, 71 F.3d at 902. 

18 EPGT Texas Pipeline, 99 FERC ¶ 61,295, at 62,252-3 (2002). 
Docket No. RM09-2-000 - 11 -

14. Accordingly, comments are requested to assist in evaluating whether changes in the 

Commission’s posting requirements should be considered in order to remove any 

competitive disadvantage between interstate pipelines, on the one hand, and intrastate 

pipelines providing interstate transportation and storage services under section 311 of the 

NGPA and Hinshaw pipelines providing such service pursuant to a §284.224 blanket 

certificate. Specifically, the Commission requests comments on the following questions: 

1. What are the competitive impacts of the current differences in 

reporting requirements applicable to interstate pipelines subject to 

the § 284.13 reporting requirements and section 311 and Hinshaw 

pipelines subject to the § 284.126 reporting requirements? Are 

the competitive effects greater where the competing pipelines 

have market-based rates, than where the competing pipelines have 

cost-based rates? Does competition between interstate pipelines, 

on the one hand, and section 311 and Hinshaw pipelines, on the 

other, occur primarily in the context of storage services or is there 

also significant competition in the context of transportation 

services? 

2. Should the reporting requirements for interstate pipelines in 

§ 284.13 be extended to all section 311 and Hinshaw pipelines 

providing interstate transportation and storage services? Should 
Docket No. RM09-2-000 - 12 -

the reporting requirements in § 284.13 only be required for 

section 311 and Hinshaw pipelines with authority to provide 

interstate services at market-based rates? 

3. To what extent would market transparency be enhanced by 

requiring section 311 and Hinshaw pipelines providing interstate 

services to comply with the requirements of § 284.13? 

4. Should the reporting requirements for interstate pipelines in 

§ 284.13 only be extended to larger section 311 and Hinshaw 

pipelines and, if so, what measurement should be used to separate 

larger section 311 and Hinshaw pipelines from smaller storage 

providers? 

5. Should all of the § 284.13 reporting requirements be imposed on 

section 311 and Hinshaw pipelines or only some of those 

requirements? If the latter, which of the § 284.13 reporting 

requirements are necessary to avoid adverse competitive effects 

and promote transparency? 

6. Would extending the § 284.13 reporting requirements to section 

311 and Hinshaw pipelines have a material effect on the amount 

of intrastate transportation and storage capacity made available in 

the interstate market? 
Docket No. RM09-2-000 - 13 -

7. Would a periodic report filed more frequently than semi-annually 

but short of a daily posting requirement provide the necessary 

level of price transparency to address the issues raised by SGRM 

and other storage developers in Docket No. RP08-606-000? 

8. Should section 311 and Hinshaw pipelines be prohibited from 

submitting their § 284.126 (b) and (c) annual transportation and 

semi-annual storage reports subject to a request for privileged 

treatment under §§ 385.1112 and 388.112 of the Commission’s 

regulations? If so, does that provide the necessary level of price 

transparency to address the issues raised by SGRM and other 

storage developers in Docket No. RP08-606-000? 

III. Procedure for Comments

15. The Commission invites interested persons to submit comments, and other 

information on the matters, issues, and specific questions identified in this notice. 

Comments are due [insert date that is 60 days from the date of publication in the 

FEDERAL REGISTER]. Comments must refer to Docket No. RM09-2-000, and must 

include the commenter’s name, the organization it represents, if applicable, and its 

address. 

16. To facilitate the Commission’s review of the comments, commenters are requested 

to provide an executive summary of their position. Commenters are requested to identify 
Docket No. RM09-2-000 - 14 -

each specific question posed by the Notice of Inquiry that their discussion addresses and 

to use appropriate headings. Additional issues the commenters wish to raise should be 

identified separately. The commenters should double-space their comments. 

17. Comments may be filed on paper or electronically via the eFiling link on the 

Commission’s web site at http://www.ferc.gov. The Commission accepts most standard 

word processing formats and commenters may attach additional files with supporting 

information in certain other file formats. 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. 

18. 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 are not required to serve copies of their comments on other 

commenters. 

IV. Document Availability 

19. 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 the Commission’s Home Page 

(http://www.ferc.gov) and in the Commission’s Public Reference Room during normal 
Docket No. RM09-2-000 - 15 -

business hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street, NE, Room 2A, 

Washington DC 20426. 

20. From the Commission’s Home Page on the Internet, this information is available 

in the Commission’s document management system, 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) in the docket number field. 

21. User assistance is available for eLibrary and the Commission's website during 

normal business hours. For assistance, please contact the Commission’s Online Support 

at 1-866-208-3676 (toll free) or 202-502-6652 (e-mail at FERCOnlineSupport@ferc.gov 

or the Public Reference Room at 202-502-8371, TTY 202-502-8659 (e-mail at 

public.referenceroom@ferc.gov). 

By direction of the Commission. 

( S E A L ) 

Nathaniel J. Davis, Sr., 

Deputy Secretary.