125 FERC ¶ 61,302 

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. 

Transparency Provisions of Section 23 Docket No. RM07-10-002 

 of the Natural Gas Act 

ORDER NO. 704-B 

ORDER DISMISSING REHEARING REQUEST AS DEFICIENT, 

DENYING RECONSIDERATION, AND GRANTING AND DENYING 

CLARIFICATION 

(Issued December 18, 2008) 

I. Introduction

1. On December 26, 2007, the Federal Energy Regulatory Commission 

(Commission) issued a Final Rule in Order No. 704,1

 which amended Part 260 of its 

regulations to require that certain natural gas market participants file annually FERC 

Form No. 552. Form No. 552 requires Respondents to identify themselves and provide 

summary information about physical natural gas transactions on an annual, calendar year 

basis.2

 On September 18, 2008, the Commission issued Order No. 704-A in response to 

requests seeking rehearing or clarification of the Final Rule.3

2. Three pleadings were filed with the Commission in response to the issuance of 

Order No. 704-A: Gas South, LLC (Gas South) filed a request for clarification, or in the 

 1 Transparency Provisions of Section 23 of the Natural Gas Act, Order No. 704, 

FERC Stats. & Regs. ¶ 31,260 (2007) (Final Rule). 

2

 A copy of Form No. 552, as revised by this order, is attached hereto as 

Attachment A. Where appropriate, we capitalize herein terms defined in Form No. 552. 

3 Transparency Provisions of Section 23 of the Natural Gas Act, Order No. 704-A, 

FERC Stats. & Regs. ¶ 31,275 (2008). 
Docket No. RM07-10-002 - 2 -

alternative, reconsideration; the National Energy Marketers Association (NEM) 

submitted a motion for rehearing or, in the alternative, clarification; and the Interstate 

Natural Gas Association of America (INGAA) filed a request for clarification. On 

November 18, 2008, we issued an order granting rehearing for further consideration of 

the issues presented.4

3. As a procedural matter, we find that Gas South has accurately styled its 

submission as a request for reconsideration rather than a request for rehearing. Gas 

South’s filing was made on October 29, 2008, following expiration of the 30-day 

statutory deadline for filing requests for rehearing.5

 The Commission has broad 

discretion regarding whether to reconsider its orders, although we have no discretion to 

alter the statutory deadline.6

 While we discuss Gas South’s arguments below, we decline 

to modify Order No. 704-A as suggested by the company. 

4. Additionally, we find that NEM has failed to comply with Rule 713(c)(2) of the 

Commission’s regulations.7

 Requests for rehearing of our orders must include a section 

entitled “Statement of Issues” listing each issue in a separately enumerated paragraph that 

includes representative Commission and court precedent on which the party is relying. 

Failure to list any issue results in waiver of the issue under our regulations. The purpose 

of this requirement is to benefit all participants in a proceeding by ensuring that the 

Commission and all other participants understand the issues raised by the filer, and to 

enable the Commission to respond to these issues. Having a clearly articulated Statement 

of Issues ensures that issues are properly raised before the Commission. A Statement of 

Issues also avoids the waste of time and resources involved in litigating appeals regarding 

which the courts of appeals lack jurisdiction because the issues on appeal were not clearly 

identified before the Commission.8

 Headings to arguments, while helpful to our review, 

 4 Transparency Provisions of Section 23 of the Natural Gas Act, Order Granting 

Rehearing for Further Consideration (Nov. 18, 2008). 

5

 Natural Gas Act (NGA) § 19(a), 15 U.S.C. § 717r. See also 18 C.F.R. § 713(b) 

(2008) (requests for rehearing must be filed within 30 days following issuance of the 

order to be reheard). 

6 See, e.g., Cities of Campbell and Thayer v. FERC, 770 F.2d 1180, 1183 (D.C. 

Cir. 1985). 

7

 18 C.F.R. § 385.713(c)(2) (2008). See Revision of Rules of Practice and 

Procedure Regarding Issue Identification, Order No. 663, FERC Stats. & Regs. ¶ 31,193 

(2005), order on reh'g, Order No. 663-A, FERC Stats. & Regs. ¶ 31,211 (2006) 

(amending Order No. 663 to limit its applicability to rehearing requests). 

8 See Order No. 663 at P 3-4. 
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do not satisfy the requirement that issues be listed in a separate section.9

 For this reason, 

we dismiss NEM’s request for rehearing.10 Nevertheless, we address the substance of 

NEM’s arguments as they pertain equally to the company’s request for clarification. 

II. Background

5. In the Final Rule, the Commission, acting under its authority in section 23 of the 

NGA,11 adopted an annual reporting requirement for certain natural gas buyers and 

sellers. On rehearing in Order No. 704-A, the Commission substantially clarified and 

modified the reporting requirement, including modification of Form No. 552. 

6. In relevant part, the Commission clarified that transactions to end-users generally 

are reportable by purchasers and sellers. However, we found that traditional retail 

transactions are not relevant to the goals of Form No. 552 and, thus, are not to be reported 

on the form. Such transactions do not utilize a price index and could not contribute to 

index price formation. The Commission identified this type of transaction as: “a bundled 

retail transaction through a LDC [local distribution company] at a state-approved tariff 

rate.”12 Consistent with this finding, Form No. 552 was amended to exclude “sales to 

and purchases by retail consumers of natural gas pursuant to a state commissionapproved bundled 13 tariff.”

 

7. Separately, the Commission found that “volumes reportable on Form No. 552 

should include volumes that utilize next-day or next-month price indices, volumes that 

are reported to any price index publisher, and any volumes that could be reported to an 

index publisher even if the respondent has chosen not to report to a publisher.”14 Form 

9 See Entergy Services, Inc., 123 FERC ¶ 61,078, at P 8 (2008). 

10 See, e.g., Entergy Services, Inc., 119 FERC ¶ 61,190, order dismissing reh’g, 

121 FERC ¶ 61,126 (2007), order denying reh’g, 123 FERC ¶ 61,078, at P 8 (2008); 

Joseph M. Keating, 120 FERC ¶ 61,246, order dismissing reh’g, 121 FERC ¶ 61,192 

(2007); 18 CFR Part 40 Mandatory Reliability Standards for the Bulk-Power System, 

Order No. 693, FERC Stats. & Regs. ¶ 31,242, order on reh’g, Order No. 693-A, 

120 FERC ¶ 61,053 at P 5 (2007). 

11 15 U.S.C. § 717t-2 (2006). 

12 Order No. 704-A at P 41. 

13 Form No. 552, definition of “Physical Natural Gas Transaction.” 

14 Order No. 704-A at P 13. 
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No. 552 was amended to exclude “volumes that are not Next-Day Delivery or NextMonth Delivery.”15 The form itself does not explicitly address whether transactions that 

utilize an index must be for Next-Day Delivery or Next Month Delivery to be reportable. 

III. Requests for Clarification and Reconsideration

A. Retail End-Use Transactions

8. In its request for clarification, or in the alternative, rehearing, NEM requests that 

the Commission list among the definitions of Form No. 552 in the volumes to be 

excluded from reporting, “sales to and purchases by retail customers pursuant to a stateapproved retail access program.”16 NEM claims that Order No. 704-A’s references to 

bundled retail service are unclear and that the Commission should clarify whether 

purchases and sales under retail access programs, which may or may not involve a 

bundled product, are properly excluded from reported volumes.17 While “NEM would 

ordinarily construe the term ‘bundled retail service’ to denote only LDC commodity 

sales, not competitive retail access program sales,” NEM believes that such an 

interpretation is inequitable.18 NEM states that retail marketers, like LDCs, are not 

consuming gas that they sell to customers and that it discerns “no basis” for 

distinguishing between sales by LDCs and sales by marketers under our regulations.19 

According to NEM, imposing the requirement of submission of an annual report on 

marketers, but not LDCs, would result in a “large and unjustified competitive advantage” 

for LDCs.20

9. Gas South similarly requests clarification or, in the alternative, reconsideration, of 

Order No. 704-A’s exclusion of retail end-use transactions from volumes reported on 

Form No. 552. Gas South requests that we clarify that Form No. 552 need not be filed by 

“state-certificated retail natural gas marketers, like Gas South, who sell natural gas to 

retail customers located behind the city-gate under an unbundled retail rate.”21 Gas South 

 15 Form No. 552, definition of “Physical Natural Gas Transaction.” 

16 NEM Comments at 1. 

17 Id. at 5. 

18 Id. at 6. 

19 Id. at 9. 

20 Id. at 10. 

21 Gas South Comments at 3. 
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claims that there is “no significant difference” between bundled retail transactions by an 

LDC and retail transactions by marketers operating in a state-approved retail access 

program.22 Gas South argues that, like LDC bundled retail transactions, marketer 

transactions that occur behind the city-gate do not utilize a price index or contribute to 

index price formation.23

10. As discussed above, NEM’s request for rehearing is deficient and, therefore, 

dismissed. For the reasons now stated, we reject NEM’s requested clarification and Gas 

South’s similar requests for clarification or reconsideration. 

11. In Order No. 704-A, we concluded that many end-use transaction volumes are 

properly included on Form No. 552. As we stated, “it is our experience and industry 

common knowledge that many end-use transactions utilize price indices and/or could be 

relied upon to form price indices. End-use transactions, specifically transactions 

involving large consumers of natural gas that compete directly with wholesale market 

participants, are very relevant to the Commission’s transparency mission.”24 We noted 

that not all end-use transactions utilize price indices or have the capability to contribute to 

the formation of price indices. One example of such an end-use transaction is a “bundled 

retail transaction through an LDC at a state-approved tariff rate.”25 Thus, a transaction is 

excluded from reporting if (1) the seller is an LDC; (2) the transaction bundles 

commodity and transportation costs; (3) the purchaser is a retail end-user; and (4) the 

transaction is priced at a state-approved tariff rate. 

12. Order No. 704-A provides that other types of transactions to end-users need not be 

reported. For example, Fixed Price transactions to end-users that are not for Next-Day 

Delivery or Next-Month Delivery could not contribute to index price formation. 

Therefore, these transactions are not reportable.26 In Order Nos. 704 and 704-A, the 

Commission recognized that, in our nation’s robust natural gas markets, transaction terms 

vary substantially.27 The approach taken by Form No. 552, therefore, is to set forth 

specific criteria against which Respondents could determine whether individual 

 22 Id. at 5. 

23 Id.

24 Order No. 704-A at P 36. 

25 Id. at P 41. 

26 Id. at P 13. 

27 NEM appears to acknowledge this point as well, noting the variety of 

transaction formats even among retail access program participants in various states. 
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transactions should be reported. By referencing bundled retail transactions made by an 

LDC at state-approved tariff rates, the Commission provided one example of a 

transaction type that is not reportable. 

13. Form No. 552 requires reporting of volumes associated with transactions that 

utilize, contribute to, or could contribute to a price index. Transactions made by 

marketers under state-sponsored retail access programs may or may not be reportable, 

depending on the terms of the transactions at issue. If a particular retail marketer 

transaction does not utilize a price index, is not reported to an index publisher, and could 

not contribute to a price index even if reported to a publisher, then the transaction would 

not be reportable on Form No. 552. However, not all retail marketer transactions are 

structured in such a manner. We therefore decline to modify Form No. 552 to provide a 

blanket exclusion for all retail marketer transactions to end-users as suggested by NEM 

and Gas South. We urge all potential Respondents to review the terms of Form No. 552 

and our orders to determine whether specific transactions are reportable. As we 

discussed in Order No. 704-A, Respondents may contact our new compliance help desk 

for direction regarding specific transactions once they begin to complete Form No. 552.28 

Alternately, Respondents may contact Commission staff by electronic mail with 

questions regarding Form No. 552.29

B. Cash-out Transactions that are Not Next-Day Delivery or Next-Month 

Delivery

14. INGAA requests clarification of the definition of “Physical Natural Gas 

Transaction” as that term is defined in Form No. 552. INGAA states that the 

Commission made clear in Order No. 704-A that cash-out transactions must be reported 

if they “rely on, contribute to, or could contribute to a price index.”30 INGAA asserts 

that while the definition of “Physical Natural Gas Transaction” specifically contemplates 

that cash-out transactions will be reported on Form No. 552, the definition also provides 

that transactions should be reported only if they are for Next-Day Delivery or NextMonth Delivery. INGAA claims that cash-out transactions are “payments in settlement 

 28 See Obtaining Guidance on Regulatory Requirements, 123 FERC ¶ 61,157 

(2008) (cited in Order No. 704-A at P 95). 

29 The electronic mail address to direct such questions is form552@ferc.gov, a link 

to which can be found at http://www.ferc.gov/docs-filing/eforms.asp. This webpage will, 

in the future, include a list of frequently asked questions providing Commission staff 

guidance on some of the more common, generic inquiries that have been received. 

30 INGAA Comments at 2 (citing Order No. 704-A at P 59). 
Docket No. RM07-10-002 - 7 -

of over-deliveries or under-deliveries” and, therefore, are not for Next-Day Delivery o

Next-Month Delivery.

r 

 and 

31 INGAA argues that, should we retain the requirement to report 

cash-out volumes, the Commission should clarify the instructions of Form No. 552

indicate the specific line on which cash-out volumes should be reported. 

15. We agree with INGAA and clarify that cash-out, balancing, and in-kind 

transactions are reportable on Form No. 552 if they rely on, contribute to, or could 

contribute to a price index. Form No. 552 is amended to provide that Fixed Price 

transactions are reportable only if they are for Next-Day Delivery or Next-Month 

Delivery. Index-based transactions are reportable even if they are not for Next-Day 

Delivery or Next-Month Delivery. This clarification is consistent with our determination 

in Order No. 704 that one of the goals of Form No. 552 is to allow the Commission to 

“not only understand the transactions used to formulate price indices; it is to understand 

how influential price indices are in the overall transacting of natural gas in U.S. 

wholesale markets.”32 Further, we clarify that cash-out, balancing, and in-kind volumes 

are reportable on specific lines of Form No. 552 depending upon the substance of the 

underlying transaction. For example, cash-out transactions that utilize a Next-Day 

Delivery gas price index would be reportable on lines 1 and 3 of page 4 (Purchase and 

Sales Information).33 If a cash-out transaction utilizes a Next-Month Delivery price 

index, then the volumes associated with the cash-out would be reportable on page 4 

(Purchase and Sales Information), lines 1 and 5. 

IV. Other Modifications to Form No. 552

16. In addition to the clarification of the definition of “Physical Natural Gas 

Transaction” discussed above, we modify the format of Form No. 552 to accommodate 

the technical requirements necessary for on-line electronic submission of the form. 

These modifications are non-substantive and merely reorganize the data to be collected. 

Further, we clarify on page 3 (Schedule of Reporting Companies and Price Index 

Reporting) of the form that non-volumetric information should be provided not just for 

Affiliates, but also for the Respondent itself. 

17. An electronic version of Form No. 552 will be made available at 

http://www.ferc.gov/docs-filing/eforms.asp by the middle of January 2009. Respondents 

 31 Id.

32 Order No. 704 at P 73. 

33 As discussed below, the pagination of Form No. 552 has been changed. 
Docket No. RM07-10-002 - 8 -

may download and complete Form No. 552 as a fillable .pdf document and then submit 

completed Form No. 552 to the Commission via the eFiling system.34

The Commission orders: 

(A) NEM’s request for rehearing is dismissed. 

(B) Gas South’s request for reconsideration is denied. 

(C) NEM’s and Gas South’s requests for clarification are denied and INGAA’s 

request for clarification is granted, as discussed herein. 

By the Commission. 

( S E A L ) 

Kimberly D. Bose, 

Secretary. 

 34 Instructions on registering and submitting documents via eFiling can be found at 

http://www.ferc.gov/docs-filing/efiling.asp. 
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