Federal Register / Vol. 72, No. 80 / Thursday April 26, 2007 / Proposed Rules 20791 

26 26 44 U.S.C. 3501 et seq. 

1To be codified at 15 U.S.C. 717t–2. 

2Energy Policy Act of 2005, Pub. L. No. 109–58, 

119 Stat. 594 (2005). 

of the Proposed Amendment with their 

comment letters. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(‘‘PRA’’) imposes certain obligations on 

federal agencies, including the 

Commission, in connection with their 

conducting or sponsoring any collection 

of information as defined by the PRA.26

The Proposed Amendment would 

require intermediaries to conduct an 

annual review of their registration 

information maintained with NFA. The 

information that would be reviewed in 

accordance with the Proposed 

Amendment is part of an approved 

collection of information. Moreover, the 

Proposed Amendment would not result 

in any material modifications to this 

approved collection. Accordingly, for 

purposes of the PRA, the Commission 

certifies that the requirements of the 

PRA are inapplicable to the Proposed 

Amendment. 

List of Subjects in 17 CFR Part 3 

Administrative practice and 

procedure, Brokers, Commodity 

Futures, Reporting and recordkeeping 

requirements. 

For the reasons discussed in the 

preamble, the Commission proposes to 

amend 17 CFR part 3 as follows: 

PART 3—REGISTRATION 

1. The authority citation for part 3 

continues to read as follows: 

Authority: 5 U.S.C. 522, 522b; 7 U.S.C. 1a, 

2, 6, 6a, 6b, 6c, 6d, 6e, 6f, 6g, 6h, 6i, 6k, 6m, 

6n, 6o, 6p, 8, 9, 9a, 12, 12a, 13b, 13c, 16a, 

18, 19, 21, 23. 

2. Section 3.10 is amended by adding 

paragraph (d) to read as follows: 

§ 3.10 Registration of futures commission 

merchants, introducing brokers, commodity 

trading advisors, commodity pool operators 

and leverage transaction merchants. 

* * * * * 

(d) On a date to be established by the 

National Futures Association, and in 

accordance with procedures established 

by the National Futures Association, 

each registrant as a futures commission 

merchant, introducing broker, 

commodity trading advisor, commodity 

pool operator or leverage transaction 

merchant shall, on an annual basis, 

review and update registration 

information maintained with the 

National Futures Association. The 

failure to complete the review and 

update within thirty days following the 

date established by the National Futures 

Association shall be deemed to be a 

request for withdrawal from registration, 

which shall be processed in accordance 

with the provisions of § 3.33(f). 

3. Section 3.33 is amended by revising 

paragraph (f) introductory text to read as 

follows: 

§ 3.33 Withdrawal from registration. 

* * * * * 

(f) A request for withdrawal from 

registration will become effective on the 

thirtieth day after receipt of such 

request by the National Futures 

Association, or earlier upon written 

notice from the National Futures 

Association (with the written 

concurrence of the Commission) of the 

granting of such request, unless prior to 

the effective date: 

* * * * * 

Issued in Washington, DC, on April 23, 

2007, by the Commission. 

Eileen Donovan, 

Acting Secretary of the Commission. 

[FR Doc. E7–8025 Filed 4–25–07; 8:45 am] 

BILLING CODE 6351–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Parts 260 and 284 

[Docket Nos. RM07–10–000 and AD06–11–

000] 

Transparency Provisions of Section 23 

of the Natural Gas Act; Transparency 

Provisions of the Energy Policy Act 

April 19, 2007. 

AGENCY: Federal Energy Regulatory 

Commission, DOE. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: In order to implement its 

authority under section 23 of the 

Natural Gas Act, which was added by 

section 316 of the Energy Policy Act of 

2005 (EPAct 2005), the Commission 

proposes to revise its regulations to: 

require that intrastate pipelines post 

daily the capacities of, and volumes 

flowing through, their major receipt and 

delivery points and mainline segments 

in order to make available the 

information needed to track daily flows 

of natural gas throughout the United 

States; and require that buyers and 

sellers of more than a de minimis 

volume of natural gas report annual 

numbers and volumes of relevant 

transactions to the Commission in order 

to make possible an estimate of the size 

of the physical U.S. natural gas market, 

assess the importance of the use of 

index pricing in that market, and 

determine the size of the fixed-price 

trading market that produces the 

information. These revisions would 

facilitate price transparency in markets 

for the sale or transportation of physical 

natural gas in interstate commerce. 

DATES: Comments are due June 11, 2007. 

Reply comments are due July 10, 2007. 

ADDRESSES: You may submit comments 

identified by Docket No. RM07–10–000, 

by one of the following methods: 

• Agency Web Site: http://ferc.gov. 

Follow the 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, NE., 

Washington, DC 20426. Please refer to 

the Comment Procedures Section of the 

preamble for additional information on 

how to file paper comments. 

FOR FURTHER INFORMATION CONTACT: 

Stephen J. Harvey (Technical), 888 First 

Street, NE., Washington, DC 20426, 

(202) 502–6372, 

Stephen.Harvey@ferc.gov. 

Eric Ciccoretti (Legal), 888 First Street, 

NE., Washington, DC 20426, (202) 

502–8493, Eric.Ciccoretti@ferc.gov. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

1. The Federal Energy Regulatory 

Commission (Commission), in order to 

facilitate market transparency in natural 

gas markets, proposes to revise its 

regulations to: (a) Require daily posting 

of some natural gas flow information by 

intrastate pipelines; and (b) require 

annual filings by buyers and sellers of 

natural gas in U.S. wholesale markets 

(that transact more than de minimis 

volumes) of aggregate annual purchase 

and sales information. These proposals 

exercise expanded Commission 

authority under section 23 of the 

Natural Gas Act,1 which was added by 

the Energy Policy Act of 2005 (EPAct 

2005) to require reporting from entities 

not under the Commission’s traditional 

jurisdiction.2 At this time, as discussed 

infra, due to other market-related 

Commission initiatives, we do not 

propose additional regulations for 

transparency in electricity markets. 

2. The first proposal, designed to 

make available the information needed 

to track daily flows of natural gas 

throughout the United States, would 


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3See sections 4 and 5 of the Natural Gas Act, 15 

U.S.C. 717c, 717d (2000); sections 205 and 206 of 

the Federal Power Act, 16 U.S.C. 824d, 824e (2000). 

4See Initial Report on Company-Specific 

Separate Proceedings and Generic Reevaluations; 

Published Natural Gas Price Data; and Enron 

Trading Strategies—Fact Finding Investigation of 

Potential Manipulation of Electric and Natural Gas 

Prices, Docket No. PA02–2–000 (August 2003). 

5Price Discovery in Natural Gas and Electric 

Markets, Policy Statement on Natural Gas and 

Electric Price Indices, 104 FERC ¶ 61,121 (Policy 

Statement). Subsequently, in the same proceeding, 

the Commission issued an Order on Clarification of 

Policy Statement on Natural Gas and Electric Price 

Indices, 105 FERC ¶ 61,282 (Dec. 12, 2003) (Order 

on Clarification of Policy Statement) and an Order 

on Further Clarification of Policy Statement on 

Natural Gas and Electric Price Indices, 112 FERC 

¶ 61,040 (July 6, 2005) (Order on Further 

Clarification of Policy Statement). 

6 Investigation of Terms and Conditions of Public 

Utility Market-Based Rate Authorizations, 105 

FERC ¶ 61,218, at P 1, superseded in part by 

Compliance for Public Utility Market-Based Rate 

Authorization Holders, Order No. 674, 71 FR 9695 

(Feb. 27, 2006), FERC Stats. and Regs. ¶ 31,208 

(2006). 

7Amendments to Blanket Sales Certificates, 

Order No. 644, 68 FR 66,323 (Nov. 26, 2003), FERC 

Stats. and Regs. ¶ 31,153, at P 1 (2003) (citing 15 

U.S.C. 717f (2000)), reh’g denied, 107 FERC ¶

61,174 (2003) (Order No. 644–A). 8Certain portions of the behavior rules were 

rescinded in Amendments to Codes of Conduct for 

Unbundled Sales Service and for Persons Holding 

Blanket Marketing Certificates, Order No. 673, 71 

FR 9709 (Feb. 27, 2006), FERC Stats. and Regs. ¶

31,207 (2006). The requirement to report 

transaction data in accordance with the Policy 

Statement and to notify the Commission of 

reporting status were retained in renumbered 

sections. 18 CFR 284.288(a), 284.403(a). 9Price Discovery in Natural Gas and Electric 

Markets, 109 FERC ¶ 61,184, at P 73 (2004). 10Policy Statement at P 43. 11Federal Energy Regulatory Commission, Report 

on Natural Gas and Electricity Price Indices, at 2, 

Docket Nos. PL03–3–004 et al. (2004). 

12See, e.g., General Accounting Office, Natural 

Gas and Electricity Markets: Federal Government 

Actions to Improve Private Price Indices and 

Stakeholder Reaction (December 2005). 

13See April 5, 2007 letter issued to Anadarko 

Energy Services Co. in Docket No. PA06–11–000 by 

Susan J. Court, Director, Office of Enforcement, and 

attached Audit of Price Index Reporting 

Compliance; April 5, 2007 letter issued to BG 

Energy Merchants, LLC. in Docket No. PA06–12–

000 by Susan J. Court and attached Audit of Price 

Index Reporting Compliance; April 5, 2007 letter 

issued to Marathon Oil Co. in Docket No. PA06–13–

000 by Susan J. Court, and attached Audit of Price 

Index Reporting Compliance. 

create a requirement that intrastate 

pipelines post daily to the Internet the 

capacities of, and volumes flowing 

through, their major receipt and 

delivery points and mainline segments. 

Postings would be required within 24 

hours from the close of the gas day on 

which gas flows, i.e., on or before 9 a.m. 

central clock time for flows occurring on 

the gas day that ended 24 hours before. 

3. The second proposal, designed to 

permit the annual estimate of (a) The 

size of the physical domestic natural gas 

market, (b) the use of index pricing in 

that market, (c) the size of the fixedprice trading market that produces price 

indices from the subset reported to 

index publishers, and (d) the relative 

size of major traders, would create an 

annual requirement that buyers and 

sellers of more than a de minimis 

volume of natural gas report numbers 

and volumes of relevant transactions to 

the Commission. As part of this 

proposal, the Commission would 

require each holder of blanket marketing 

certificate authority or blanket 

unbundled sales services certificate 

authority to notify the Commission as to 

whether it reports its transactions to 

publishers of electricity or natural gas 

price indices and whether any such 

reporting complies with certain 

standards. Currently, a holder of a 

blanket marketing certificate or a 

blanket unbundled sales service 

certificate is required to notify the 

Commission only when it changes its 

practice regarding such reporting. This 

part of the proposal would make 

notifications of reporting status more 

reliable. 

II. Background 

4. The Commission’s market-oriented 

policies for the wholesale electric and 

natural gas industries require that 

interested persons have broad 

confidence that reported market prices 

accurately reflect the interplay of 

legitimate market forces. 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.’’ 3

5. The performance of Western 

electric and natural gas markets early in 

the decade shook confidence in posted 

market prices for energy. In examining 

these markets, the Commission’s staff 

found, inter alia, that some companies 

submitted false information to the 

publishers of natural gas price indices, 

so that the resulting reported prices 

were inaccurate and untrustworthy.4 As 

a result, questions arose about the 

legitimacy of published price indices, 

remaining even after the immediate 

crisis passed. Moreover, market 

participants feared that the indices 

might have become even more 

unreliable, since reporting (which has 

always been voluntary) declined to 

historically low levels in late 2002. 

6. The Commission recognized staff 

concerns about price discovery in 

electric and natural gas markets as early 

as January 2003, when, prior to passage 

of EPAct 2005, the Commission made 

use of its existing authority under the 

Natural Gas Act and the Federal Power 

Act to restore confidence in natural gas 

and electricity price indices. The 

Commission expected that, over time, 

improved price discovery processes 

would naturally increase confidence in 

market performance. On July 24, 2003, 

the Commission issued a Policy 

Statement on Electric and Natural Gas 

Price Indices (Policy Statement) that 

explained its expectations of natural gas 

and electricity price index developers 

and the companies that report 

transaction data to them.5 On November 

17, 2003, the Commission adopted 

behavior rules for certain electric market 

participants in its Order Amending 

Market-Based Rate Tariffs and 

Authorizations relying on section 206 of 

the Federal Power Act to condition 

market-based rate authorizations,6 and 

for certain natural gas market 

participants in Amendments to Blanket 

Sales Certificates, relying on section 7 of 

the Natural Gas Act to condition blanket 

marketing certificates.7 The behavior 

rules bar false statements and require 

certain market participants, if they 

report transaction data, to report such 

data in accordance with the Policy 

Statement. These participants must also 

notify the Commission whether or not 

they report prices to price index 

developers in accordance with the 

Policy Statement.8 On November 19, 

2004, the Commission issued an order 

that addressed issues concerning prices 

indices in natural gas and electricity 

markets and adopted specific standards 

for the use of price indices in 

jurisdictional tariffs.9

7. In the Policy Statement, among 

other things, the Commission directed 

staff to continue to monitor price 

formation in wholesale markets, 

including the level of reporting to index 

developers and the amount of adherence 

to the Policy Statement standards by 

price index developers and by those 

who provide data to them.10 In adhering 

to this directive, Commission staff 

documented improvements in the 

number of companies reporting prices 

from back offices, adopting codes of 

conduct, and auditing their price 

reporting practices.11 These efforts 

resulted in significant progress in the 

amount and quality of both price 

reporting and the information provided 

to market participants by price 

indices.12 Further, in conformance with 

this directive, Commission staff recently 

concluded audits of three natural gas 

market participants with blanket 

certificate authority that were data 

providers subject to § 284.403 of the 

Commission’s regulations.13


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14Energy Policy Act of 2005, Pub. L. No. 109–58, 

119 Stat. 594 (2005). 

15 16 U.S.C. 824 et seq. 

16 15 U.S.C. 717 et seq. 

17Section 23(a)(1) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t-2(a)(1); see also section 

220 of the Federal Power Act, to be codified at 16 

U.S.C. 824t (identical language). Section 316 of 

EPAct 2005 added section 23 to the Natural Gas Act 

(natural gas transparency provisions); section 1281 

of EPAct 2005 added section 220 to the Federal 

Power Act (electric transparency provisions) 

(together, the transparency provisions). 

18At the conference, the Commission convened 

two panels: (a) A panel of seven market participants 

to discuss price transparency in markets for the sale 

or transportation of physical natural gas in 

interstate commerce; and, (b) a panel of four market 

participants regarding price transparency in 

markets for the sale and transmission of electric 

energy in interstate commerce. See Transparency 

Provisions of the Energy Policy Act of 2005, 

Program for the Technical Conference, Docket No. 

AD06–11–000 (Oct. 6, 2006). In addition, for each 

panel, about ten representatives of information 

providers, such as price index publishers, attended 

to provide comment and answer questions. 

19Preventing Undue Discrimination and 

Preference in Transmission Service, Order No. 890, 

72 FR 12266 (March 15, 2007), FERC Stats. and 

Regs. ¶ 31,241 (2007), at P 80. 

20 Id. at P 69, 83. 

21 Id. at P 84. 

22 Id. at P 88. 

23Section 220(a)(2) of the Federal Power Act, to 

be codified at 16 U.S.C. 824t(a)(2). 

24See, e.g., Conference on Competition In 

Wholesale Power Markets, Docket No. AD07–7–000. 

25See, e.g., Transcript of Feb. 27, 2007 

Conference, Conference on Competition in 

Wholesale Power Markets, Docket No. AD07–7–000, 

at 123, 153–154, 244–249. 

26Revised Public Utility Filing Requirements, 

Order No. 2001, 67 FR 31043 (May 8, 2002), FERC 

Stats. & Regs. ¶ 31,127 (2002), reh’g denied, Order 

No. 2001–A, 100 FERC ¶ 61,074, reh’g denied, 

Order No. 2001–B, 100 FERC ¶ 61,342, order 

directing filing, Order No. 2001–C, 101 FERC ¶

61,314 (2002), order directing filing, Order No. 

2001–D, 102 FERC ¶ 61,334 (2003). 

27Comments of ISO/RTO Council, Docket No. 

AD06–11–000 (filed Oct. 5, 2006) (describing 

information provided by ISOs and RTOs). 

28See Energy Policy Act of 1992, Pub. L. No. 102–

486, 106 Stat. 2776 (1992), codified as amended in 

scattered sections of 16 U.S.C.; Natural Gas 

Wellhead Decontrol Act of 1989, Pub. L. No. 101–

60, 103 Stat. 157 (1989), codified in scattered 

section of 15 U.S.C.; Public Utility Regulatory 

Policies Act of 1978, 16 U.S.C. 2601–2645 (2000); 

Natural Gas Policy Act of 1978, 15 U.S.C. 3301–

3442 (2000). 

8. Congress recognized that the 

Commission might need expanded 

authority to mandate additional 

reporting to improve market confidence 

through greater price transparency and 

included in the Energy Policy Act of 

2005 (EPAct 2005) 14 authority for the 

Commission to obtain information on 

wholesale electric and natural gas prices 

and availability. Under the Federal 

Power Act 15 and the Natural Gas Act,16

the Commission has long borne a 

responsibility to protect wholesale 

electric and natural gas consumers. 

EPAct 2005 emphasized the 

Commission’s responsibility for 

protecting the integrity of the markets 

themselves as a way of protecting 

consumers in an active market 

environment. In particular, Congress 

directed the Commission to facilitate 

price transparency ‘‘having due regard 

for the public interest, the integrity of 

[interstate energy] markets, [and] fair 

competition.’’ 17 In the new 

transparency provisions of section 23 of 

the Natural Gas Act and section 220 of 

the Federal Power Act, Congress 

provided that the Commission may, but 

is not obligated to, prescribe rules for 

the collection and dissemination of 

information regarding the wholesale, 

interstate markets for natural gas and 

electricity, and authorized the 

Commission to adopt rules to assure the 

timely dissemination of information 

about the availability and prices of 

natural gas and natural gas 

transportation and electric energy and 

transmission service in such markets. 

9. Consistent with the directive to 

facilitate price transparency in natural 

gas and electric markets as well as to 

explore options for action under EPAct 

2005’s expansion of the Commission’s 

authority, Commission staff met with 

interested entities in the summer of 

2006. On September 26, 2006, staff 

conducted a workshop to review 

sources of energy market information 

with interested persons and to lay the 

groundwork for a technical conference 

held on October 13, 2006. In that 

conference, ideas for potential policy 

actions by the Commission were 

identified.18

10. Based on those efforts, in this 

Notice of Proposed Rulemaking (NOPR), 

the Commission sets out two proposals 

regarding collection and dissemination 

of information about natural gas 

wholesale markets. The Commission 

does not propose action with respect to 

electric markets at this time. The 

Commission has recently addressed and 

is currently addressing electric market 

transparency in other proceedings. For 

example, in its final rule reforming the 

Open Access Transmission Tariff, the 

Commission referred to its authority 

under the electric transparency 

provisions to ‘‘promote greater 

transparency in the provision of 

transmission service * * *’’ 19 In that 

order, the Commission increased the 

transparency of a transmission 

provider’s transmission planning,20 the 

transparency of its calculations of 

Available Transfer Capability,21 and the 

transparency of its business rules and 

practices.22 These reforms are consistent 

with the electric transparency 

provisions because they will ‘‘provide 

information about the availability and 

prices of wholesale * * * transmission 

service’’ to ‘‘users of transmission 

services’’ among others, as 

contemplated in the electric 

transparency provisions.23 Furthermore, 

in the recently-initiated wholesale 

competition review, the Commission is 

reviewing a variety of market-related 

electricity issues in a series of public 

conferences evaluating the state of 

competition in wholesale power 

markets.24 In the first conference, held 

February 27, 2007, among other issues, 

the Commission and panelists 

considered price transparency in the 

context of competition in the wholesale 

markets.25 As a separate matter, we note 

that wholesale electric transactions 

under market-based rates are submitted 

to the Commission and made publicly 

available through the Electric Quarterly 

Reports.26 Further, in organized 

electricity markets, Regional 

Transmission Organizations (RTOs) and 

Independent System Operators (ISOs) 

provide transparency by publishing the 

results of auction markets and by 

posting spot market and day-ahead 

prices at pre-established intervals. The 

RTOs also provide additional 

information concerning the electric 

system capacity markets and financial 

transmission rights that provide further 

transparency concerning the RTO/ISOadministered markets.27 For these 

reasons, we do not believe that 

additional action is needed at this time 

to implement the new electric 

transparency provisions of section 220 

of the Federal Power Act. 

III. Legal Context 

11. With the passage of EPAct 2005, 

Congress affirmed a commitment to 

competition in wholesale natural gas 

and electricity markets as national 

policy, the fifth major Federal law in the 

last 30 years to do so.28 As part of this 

commitment to competition, in the 

transparency provisions, Congress 

charged the Commission with assuring 

the integrity of the wholesale markets 

and assuring fair competition by 

facilitating price transparency in those 

markets. It also significantly 

strengthened the Commission’s 

regulatory tools in the transparency 

provisions, specifically, in new section 

220 of the Federal Power Act and new 

section 23 of the Natural Gas Act. 

12. In new section 23(a)(1) of the 

Natural Gas Act, Congress provided the 

Commission’s mandate: 


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29To be codified at 15 U.S.C. 717(v)(a)(1). The 

electric transparency provisions of the Federal 

Power Act are nearly identical as to the electric 

wholesale markets. Section 220 of the Federal 

Power Act, to be codified at 16 U.S.C. 824t. Because 

our proposals herein address natural gas 

transparency, we do not analyze the electric 

transparency provisions, although we expect that 

analysis of electric transparency provisions would 

be substantially similar. 

30To be codified at 15 U.S.C. 717t–2(a). 

31To be codified at 15 U.S.C. 717t–2(a)(3). 

32Section 2(6) of the Natural Gas Act, 15 U.S.C. 

717a(6). 

33 15 U.S.C. 717, 717b, 717f. 

34Section 1(b)-(d) of the Natural Gas Act, 15 

U.S.C. 717(b)-(d); section 3 of the Natural Gas Act, 

15 U.S.C. 717b; section 7(f) of the Natural Gas Act, 

15 U.S.C. 717f(f); see, also, section 601(a) of the 

Natural Gas Policy Act, 15 U.S.C. 3431(a). The 

Commission has previously explained that the 

Natural Gas Policy Act of 1978 (NGPA or Natural 

Gas Policy Act) and the Natural Gas Wellhead 

Decontrol Act of 1989 narrowed its jurisdiction 

under the Natural Gas Act: 

Under the NGPA, first sales of natural gas are 

defined as any sale to an interstate or intrastate 

pipeline, LDC [Local Distribution Company] or 

retail customer, or any sale in the chain of 

transactions prior to a sale to an interstate or 

intrastate pipeline or LDC or retail customer. NGPA 

Section 2(21)(A) sets forth a general rule stating 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, intrastate 

pipeline, or LDC. Once such a sale is executed and 

the gas is in the possession of a pipeline, LDC, or 

retail customer, the chain is broken, and no 

subsequent sale, whether the sale is by the pipeline, 

or LDC, or by a subsequent purchaser of gas that 

has passed through the hands of a pipeline or LDC, 

can qualify under the general rule as a first sale on 

natural gas. In addition to the general rule, NGPA 

Section 2(21)(B) expressly excludes from first sale 

status any sale of natural gas by a pipeline, LDC, 

or their affiliates, except when the pipeline, LDC, 

or affiliate is selling its own production. 

Order No. 644 at P 14. 

35Section 23(a)(1) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t-2(a)(1). 

36Section 23(a)(2) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t-2(a)(2). 

37 Id. 

38Section 23(a)(4) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t-2(a)(4). 

39We reiterate here our comments made 

previously regarding price index publishers, data 

hubs, and other trade processing services: we do not 

‘‘endors[e] any particular entity or approach, but 

continue to encourage industry participants to find 

optimal solutions to better wholesale price 

formation.’’ Order on Further Clarification of the 

Policy Statement at P 11. 

The Commission is directed to facilitate 

price transparency in markets for the sale or 

transportation of physical natural gas in 

interstate commerce, having due regard for 

the public interest, the integrity of those 

markets, fair competition, and the protection 

of consumers.29

In new section 23(a)(2) of the Natural 

Gas Act, Congress left to the 

Commission’s discretion whether to 

enact rules to carry out this mandate 

and provided that any rules 

implementing the transparency 

provisions provide for public 

dissemination of the information 

gathered: 

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.30

13. In new section 23(a)(3) of the 

Natural Gas Act, Congress contemplated 

that the transparency provisions would 

differ from other provisions in the 

Natural Gas Act, both as to the entities 

covered by the Commission’s 

jurisdiction and the possible 

involvement of third parties in 

implementing the rules. That section 

reads, with emphasis added: 

The Commission may—

(A) Obtain the information described in 

paragraph (2) [i.e., information about the 

availability and prices of natural gas sold at 

wholesale and interstate commerce] 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).31

By using the term ‘‘any market 

participant,’’ Congress deliberately 

expanded the universe subject to the 

Commission’s transparency authority 

beyond the entities subject to the 

Commission’s rate and certificate 

jurisdiction under other parts of the 

Natural Gas Act. The term ‘‘market 

participant’’ is not defined in the 

Natural Gas Act and is not on its face 

limited to otherwise jurisdictional 

entities. 

14. Congress could have limited the 

scope of entities subject to the 

Commission’s transparency authority by 

referring to ‘‘natural gas company’’ as 

defined in the Natural Gas Act 32 or by 

referring to section 1, 3, or 7 of the 

Natural Gas Act.33 The former approach 

would have excluded intrastate 

pipelines from the Commission’s 

transparency authority. The latter 

approach would have entailed the 

jurisdictional limitations of those 

sections, which exclude from the 

Commission’s jurisdiction first sales, 

sales of imported natural gas, sales of 

imported liquefied natural gas, and sales 

and transportation by entities engaged 

in production and gathering, local 

distribution, ‘‘Hinshaw’’ pipelines, or 

vehicular natural gas.34 These 

limitations do not apply to the 

Commission’s transparency authority. 

Given Congress’s use of the term 

‘‘market participant,’’ the Commission’s 

transparency authority includes any 

person or form of organization, 

including, for instance, natural gas 

producers, processors and users. 

15. The Commission’s authority to 

obtain information from ‘‘any market 

participant’’ is not plenary. In the 

natural gas transparency provisions, 

Congress limited that authority in two 

respects: the scope of the markets at 

issue and the type of information to 

obtain and disseminate. First, Congress 

directed the Commission to ‘‘facilitate 

price transparency in markets for the 

sale or transportation of physical natural 

gas in interstate commerce * * *.’’ 35

Thus, any information collected and 

disseminated must be for the purpose of 

price transparency in those markets. We 

do not interpret this language to limit 

the Commission to obtaining 

information only about physical natural 

gas sales or transportation in those 

markets, provided that the information 

obtained and disseminated pertains to 

price transparency in those markets. 

Second, Congress provided that any 

rules ‘‘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 * * *.’’ 36 Thus, the 

Commission’s authority is limited to 

‘‘information about the availability and 

prices of natural gas sold at wholesale 

and in interstate commerce.’’ 37 Again, 

this language does not limit the type of 

information the Commission could 

collect to implement its mandate, 

provided that such information is 

‘‘about’’ (i.e., pertains to) the 

‘‘availability and prices of natural gas 

sold at wholesale and in interstate 

commerce.’’ For instance, some 

transportation or sales of natural gas is 

not in interstate commerce, but, 

nonetheless, would affect the 

availability and prices of natural gas at 

wholesale and in interstate commerce. 

16. The natural gas transparency 

provisions further provide that the 

Commission shall ‘‘rely on existing 

price publishers and providers of trade 

processing services to the maximum 

extent possible.’’ 38 Thus, Congress 

authorized the Commission to rely on 

third parties to collect and disseminate 

transparency information. The 

Commission does not herein authorize 

or empower third parties to collect or 

disseminate information. Nonetheless, 

we expect that third parties may use the 

information collected pursuant to the 

proposals in this NOPR and repackage 

it, if sufficient demand for such services 

arises in the information marketplace.39

17. Also, in the transparency 

provisions, Congress cautioned the 

Commission in providing for any 


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40Section 23(b)(2) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t–2(b)(2). 

41Section 23(d)(2) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t–2(d)(2). 

42Section 23(a)(1) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t–2(a)(1). 

43Section 23(a)(2) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t–2(a)(2). 

44See section 311(a)(2) of the Natural Gas Policy 

Act, 15 U.S.C. 3371(a)(2); see also 18 CFR part 284, 

subpart C (Certain Transportation by Intrastate 

Pipelines). 

45See section 311(b) of the Natural Gas Policy 

Act, 15 U.S.C. 3371(b); see also 18 CFR part 284, 

subpart D (Certain Sales by Intrastate Pipelines). 

46Pipeline Service Obligations and Revisions to 

Regulations Governing Self-Implementing 

Transportation and Regulation of Natural Gas 

Pipelines After Partial Wellhead Decontrol, Order 

No. 636, 57 FR 13267 (Apr. 16, 1992), FERC Stats. 

& Regs. ¶ 30,939 (1992), order on reh’g, Order No. 

636–A, 57 FR 36128 (Aug. 12, 1992), FERC Stats & 

Regs. ¶ 30,950 (1992), order on reh’g, Order No. 

636–B, 61 FERC ¶ 61,272 (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 1104 (D.C. Cir. 1996), order on remand, 

Order No. 636–C, 78 FERC ¶ 61,186 (1997). 

47See 18 CFR part 284, subpart L (Certain Sales 

for Resale by Non-interstate Pipelines). 

dissemination of information pursuant 

to the transparency provisions to ensure 

that ‘‘consumers and competitive 

markets are protected from the adverse 

effects of potential collusion or other 

anticompetitive behaviors by untimely 

disclosure of transaction-specific 

information.’’ 40

18. Finally, new section 23(d)(2) of 

the natural gas transparency provisions 

mandates an exemption from any 

reporting for ‘‘natural gas producers, 

processors, or users who have a de 

minimis market presence * * *.’’ 41

This paragraph does not exempt all 

producers and all processors from 

reporting, but exempts only producers 

that have a de minimis market presence 

and only processors that have a de 

minimis market presence. 

IV. Reporting of Flow Volume and 

Capacity by Intrastate Pipelines 

A. Proposal 

19. The Commission proposes that in 

order to make available the information 

needed to track daily flows of natural 

gas throughout the United States, each 

intrastate pipeline would be required to 

post daily to the Internet the capacities 

of, and volumes flowing through, their 

major receipt and delivery points and 

mainline segments. Postings would be 

required within 24 hours from the close 

of the gas day on which gas flowed, i.e., 

at or before 9 a.m. central clock time for 

flow that occurred on the gas day that 

ended 24 hours before. To illustrate, the 

volume of gas that flowed through a 

receipt point from 9 a.m. central clock 

time on Monday through 9:00 a.m. 

central clock time on Tuesday would be 

reported as a daily flow volume for that 

gas day and must be reported by 9 a.m. 

Wednesday central clock time. The 

Commission would implement this 

proposal by adding a new § 284.14 to its 

regulations. 

20. As explained in greater detail 

below, by adding information on 

intrastate pipeline flows to the 

information already available from 

interstate pipelines, the Commission, 

market participants, and the public 

could develop a better understanding of 

daily supply and demand conditions 

that directly affect U.S. wholesale 

natural gas markets. While distinctions 

between intrastate and interstate natural 

gas markets may be meaningful from a 

legal perspective, they are not 

meaningful from the perspective of 

market price formation. The U.S. natural 

gas market produces geographically 

diverse prices through the direct 

influence of supply, demand and 

transportation availability, but without 

ever differentiating interstate from 

intrastate commerce. Consequently, this 

proposal to increase information from 

intrastate pipelines would directly 

‘‘facilitate price transparency for the 

sale * * * of physical natural gas in 

interstate commerce’’ as authorized in 

the natural gas transparency 

provisions.42

B. Legal Considerations 

21. As discussed above, the natural 

gas transparency provisions provide the 

authority for the Commission to obtain 

information from otherwise nonjurisdictional entities, including 

intrastate pipelines. The proposal to 

require intrastate pipelines to post flow 

information raises the additional issue 

whether such information qualifies as 

‘‘information about the availability and 

prices of natural gas sold at wholesale 

in interstate commerce.’’ 43 If not, the 

Commission would be foreclosed from 

requiring the posting. 

22. The Commission believes that the 

information covered by the instant 

proposal qualifies as ‘‘information about 

the availability and prices of natural gas 

sold at wholesale and in interstate 

commerce.’’ Notwithstanding their 

intrastate status, most major intrastate 

pipelines today transport or buy and sell 

wholesale natural gas that eventually 

enters or at least impacts the interstate 

natural gas market. Further, supply and 

demand in intrastate markets have a 

direct effect on prices of gas destined for 

interstate markets because both 

intrastate and interstate consumers draw 

on the same sources of supply. This is 

the case because of the statutory, 

regulatory and market changes that have 

taken place in the last three decades. 

23. In 1978, in the Natural Gas Policy 

Act, Congress allowed an intrastate 

pipeline to transport natural gas in 

interstate commerce on behalf of any 

interstate pipeline or local distribution 

company served by an interstate 

pipeline, without losing its intrastate 

status.44 Congress likewise permitted an 

intrastate pipeline to sell natural gas to 

any interstate pipeline or any local 

distribution company served by any 

interstate pipeline, without losing its 

intrastate status.45 In addition, at the 

same time that the Commission issued 

Order No. 636 in 1992, it promulgated 

a new subpart of Part 284 (revised 

several times in the past 15 years) that 

provides blanket authority to any person 

who is not an interstate pipeline 

(including intrastate pipelines) to make 

sales for resale of natural gas in 

interstate commerce.46 This 

authorization is a limited jurisdiction 

certificate, which means that the holder 

does not become subject to the panoply 

of Natural Gas Act regulation by 

exercising its rights under the 

certificate.47

24. The market understandably 

reacted to these statutory and regulatory 

changes since 1978. As relevant here, 

and explained in greater detail below, 

natural gas sold at or destined to be sold 

at wholesale in the interstate market is 

frequently exchanged or the transactions 

consummated at market hubs where 

interstate and intrastate pipelines are 

interconnected (e.g., Waha, Katy, 

Houston Ship Channel, and Carthage in 

Texas and at Henry Hub in Louisiana). 

Prices formed at these hubs are, in 

effect, prices for wholesale transactions 

in interstate commerce, even if a portion 

of the gas priced at each market hub is 

consumed intrastate. In addition, 

transfer of natural gas can take place 

directly between parties who ship gas 

on both intrastate and interstate 

pipelines at any pipeline 

interconnection. 

C. Discussion 

25. Currently, through the availability 

of information regarding daily 

scheduled flows of natural gas through 

interstate pipelines, market participants 

have an increased, daily understanding 

of natural gas markets, including 

regional conditions and the pipeline 

capacity available to resolve different 

geographic supply/demand balances. 

This is due in part to Order No. 637, 

where the Commission required posting 

of capacity and scheduled volume 

information on interstate pipelines with 


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48Regulation of Short-Term Natural Gas 

Transportation Services and Regulation of 

Interstate Natural Gas Transportation Services, 

Order No. 637, 65 FR 10156, at 10204–10205, (Feb. 

25, 2000), FERC Stats. & Regs. 

¶ 31,091, at 31,320–31,321 (2000); order on reh’g, 

Order No. 637–A, 65 FR 35706 (June 5, 2000), FERC 

Stats. & Regs. 

¶ 31,099 (2000); order on reh’g, Order No. 637–B, 

65 FR 47284 (Aug. 2, 2000), affirmed in relevant 

part, Interstate Natural Gas Ass’n of America v. 

FERC, 285 F.3d 18 (D.C. Cir. 2002), order on 

remand, 101 FERC ¶ 61,127, order on reh’g, 106 

FERC ¶ 61,088, aff’d sub nom. American Gas Ass’n 

v. FERC, 428 F.3d 255 (D.C. Cir. 2005) (Order No. 

637). 

49 18 CFR 284.13(d). 

50Order No. 637, 65 FR at 10169. 

51See, e.g., Comments of Bentek Energy, LLC., 

Docket No. AD06–11–000 (filed Oct. 10, 2006). 

52See, e.g., Comments of Platt’s, at p. 11–13, 

Docket No. AD06–11–000 (information regarding 

the supply and demand of natural gas explains 

prices and such information is available from 

interstate pipelines, but not intrastate pipelines). 

53 Department of Energy, Energy Information 

Administration, Natural Gas Market Centers and 

Hubs: A 2003 Update, Oct. 2003, http:// 

www.eia.doe.gov/pub/oil_gas/natural_gas/ 

feature_articles/2003/market_hubs/mkthubs03.pdf. 

the direct intention of allowing shippers 

to monitor capacity availability.48

Accordingly, interstate pipelines must 

post available capacity information, 

specifically: 

The availability of capacity at receipt points, 

on the mainline, at delivery points, and in 

storage fields, whether the capacity is 

available directly from the pipeline or 

through capacity release, the total design 

capacity of each point or segment on the 

system; the amount scheduled at each point 

or segment whenever capacity is scheduled, 

and all planned and actual service outages or 

reductions in service capacity.49

In Order No. 637, the Commission 

anticipated that such postings would 

provide useful information regarding 

supply and demand fundamentals: 

The changes to the Commission’s reporting 

requirements will enhance the reliability of 

information about capacity availability and 

price that shippers need to make informed 

decisions in a competitive market as well as 

improve shippers’ and the Commission’s 

ability to monitor marketplace behavior to 

detect, and remedy anticompetitive 

behavior.50

26. Today, interested market 

participants as well as commercial 

vendors retrieve this information from 

the Web sites of interstate pipelines to 

obtain schedule information that is then 

used to estimate a variety of supply and 

demand conditions including 

geographic and industrial sector 

consumption, storage injections and 

withdrawals and regional production in 

almost real-time.51 Market participants 

have come to rely on this information to 

help price transactions. Commission 

staff has also come to rely on this 

information to perform its oversight and 

enforcement functions. In fact, observers 

believe that this information posting has 

contributed to market transparency by 

revealing the underlying volumetric (or 

availability) drivers behind price 

movements.52

27. Notwithstanding the contribution 

of posted interstate schedule 

information to the transparency of price 

and availability of natural gas, this 

information cannot provide a complete 

picture of natural gas flows in the 

United States—or even those flows 

directly relevant to the pricing of 

natural gas flowing in interstate 

commerce. Several major U.S. natural 

gas pricing points sit at the confluence 

of multiple interstate and intrastate 

pipelines. A recent study by the 

Department of Energy’s Energy 

Information Administration (EIA) 

identified 28 national market centers or 

pricing hubs, of which 13 are served by 

a combination of interstate and 

intrastate pipelines.53 The table below 

shows the capacity of interstate and 

intrastate pipelines connected to each of 

these 13 hubs. 

TABLE 1.—INTER- AND INTRASTATE PIPELINE DELIVERY CAPACITY AT SELECTED U.S. NATURAL GAS PRICING POINTS

Hub name State 

Receipt and delivery capacity 

Interstate 

pipelines 

(MMcfd) 

Intrastate 

pipelines 

(MMcfd) 

Carthage .................................................................................................... TX .................................................... 1,120 1,355 

Henry Hub .................................................................................................. LA .................................................... 2,770 1,215 

Katy—Enstore ............................................................................................ TX .................................................... 1,370 3,815 

Katy—DEFS ............................................................................................... TX .................................................... 260 2,360 

Mid Continent ............................................................................................. KS .................................................... 1,112 627 

Moss Bluff .................................................................................................. TX .................................................... 1,050 1,800 

Nautilus ...................................................................................................... LA .................................................... 1,200 1,350 

Perryville .................................................................................................... LA .................................................... 3,652 350 

Aqua Dulce ................................................................................................ TX .................................................... 855 835 

Waha—Lone Star ...................................................................................... TX .................................................... 810 1,140 

Waha—Encina ........................................................................................... TX .................................................... 525 800 

Waha—El Paso ......................................................................................... TX .................................................... 1,165 1,660 

Waha—DEFS ............................................................................................ TX .................................................... 300 1,850 

Source: Unpublished Energy Information Administration update to March 2005 of information presented in Natural Gas Market Centers and 

Hubs: A 2003 Update, October 2003. 

28. Many of these pricing points are 

closely connected to other regions of the 

United States, influencing prices across 

the country. The figure below shows the 

location and flow patterns of natural gas 

moving between intrastate and interstate 

markets through several of these pricing 

points. 

BILLING CODE 6717–01–P 


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54Federal Energy Regulatory Commission, 2006 

State of the Markets Report, at 48–50 (Jan. 2007), 

http://www.ferc.gov/market-oversight/marketoversight.asp, (follow link to the State of the 

Markets Full Report). 

55BENTEK Energy, LLC analysis of supply 

scheduled into interstate pipelines compared with 

EIA data from its table Natural Gas Gross 

Withdrawals and Production for Texas and 

Oklahoma available at http://tonto.eia.doe.gov/

dnav/ng/ng_prod_sum_dcu_NUS_m.htm. 

56Texas Railroad Commission, Onshore LNG 

Supply Terminal Projects Proposed for Texas (June 

28, 2006), http://www.rrc.state.tx.us/

commissioners/carrillo/press/LNGprojects.html. 

29. One pricing point directly 

connected to both interstate and 

intrastate pipelines is Henry Hub, 

Louisiana, the location for delivery of 

natural gas under the New York 

Mercantile Exchange’s (NYMEX) futures 

contract. Monthly settlement of 

NYMEX’s Henry Hub natural gas future 

contract has become important in 

determining a variety of monthly index 

prices used to set natural gas prices in 

a variety of transactions, some in 

interstate commerce, particularly along 

the East Coast and Gulf Coast of the 

United States. The nature of this 

influence is detailed in Commission 

staff’s 2006 State of the Markets 

Report.54

30. Purchasers of natural gas in 

interstate commerce draw on the same 

sources of supply as users and buyers of 

natural gas in intrastate commerce. For 

example, much of the recent Barnett 

Shale development in the Fort Worth 

basin flows into intrastate systems 

before moving into interstate markets. In 

total, slightly more than 40 percent of 

total on-shore production in Texas is 

connected to interstate pipelines, less 

than 60 percent in Louisiana and less 

than 80 percent in Oklahoma.55 Though 

daily volume flowing from intrastate 

into interstate pipelines can be 

estimated, the supply dynamics that 

make these volumes available cannot. 

31. Send-out from current liquefied 

natural gas (LNG) terminals—Cove 

Point, Elba Island, Everett and Lake 

Charles—is observable through 

interstate receipt point flow postings. Of 

seven approved, but not yet operational, 

terminals in Texas and Louisiana, all 

would discharge in whole or in part to 

intrastate pipelines.56

32. The Commission proposes to 

require posting of actual flow 

information from intrastate pipelines 

rather than scheduled volumes, as it 

does for interstate pipelines. Intrastate 

pipelines operate in different regulatory 

and business contexts from interstate 

pipelines, making scheduled volumes 

less helpful in estimating movement of 

natural gas. For example, interstate 

pipelines primarily operate as open 

access transporters, not as sellers of 

natural gas. Scheduled volumes 

represent the communication that must 

occur between the shipper and the 

pipeline to conduct most of their 

business. As a consequence, interstate 

receipt, transportation and delivery 

schedules, as updated before and 


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57 In the case of ‘‘no-notice’’ service, see 18 CFR 

284.7(a)(4), interstate pipeline schedules do not 

reflect flows. Consequently, information about 

interstate flows in areas using no-notice service is 

less useful. 

58See, e.g., Comments of Platt’s, at p. 11, Docket 

No. AD06–11–000 (filed Nov. 1, 2006) (explaining 

that, to understand prices, ‘‘the marketplace must 

look to * * * information on [the] availability of 

and demand for natural gas * * *.’’). 

59See Comments of Platt’s, at p. 13, Docket No. 

AD06–11–000 (filed Nov. 1, 2006) (stating that 

much of the fundamental supply and demand data 

is missing from natural gas markets and advocating 

for reporting by intrastate pipelines). 60See, e.g., Transcript of the Oct. 13, 2006 

Technical Conference (Tr.), at 25, Transparency 

Provisions of the Energy Policy Act of 2005, Docket 

No. AD06–11–000 (Comments of Sheila Rappazzo, 

Chief of Policy Section of the Office of Gas and 

Water of the New York State Department of Public 

Service). 

61Tr. at 25 (Comments of Sheila Rappazzo) 

(describing how after the 2005 hurricanes data 

availability differed widely). 

62Along these lines, this proposal is consistent 

with a recent Commission final rule and a proposed 

survey by EIA. On August 23, 2006, the 

Commission revised its reporting regulations to 

require jurisdictional natural gas companies to 

report damage to facilities due to a natural disaster 

or terrorist activity that results in a reduction in 

pipeline throughput or storage deliverability. 

Revision of Regulations to Require Reporting of 

Damage to Natural Gas Pipeline Facilities, Order 

No. 682, 71 FR 51098 (Aug. 29, 2006), FERC Stats. 

and Regs. ¶ 31,227 (2006), order on reh’g, 118 FERC 

¶ 61, (2007). On January 30, 2007, EIA proposed to 

survey natural gas processing plants ‘‘to monitor 

their operational status and assess operations of 

processing plants during a period when natural gas 

supplies are disrupted.’’ Agency Information 

Collection Activities, 72 FR 4248 (Jan. 30, 2007). 

The purpose of the survey would be to ‘‘inform the 

public, industry, and the government about the 

status of supply and delivery activities in the area 

affected by the disruption.’’ Id. 

63See Prohibition of Energy Market 

Manipulation, Order No. 670, 71 FR 4244 (Jan. 26, 

2006), FERC Stats. & Regs. ¶ 31,202 (2006) 

(implementing section 4A of the Natural Gas Act, 

to be codified at 15 U.S.C. 717c–1, which prohibits 

natural gas market manipulation), reh’g denied, 114 

FERC ¶ 61,300 (2006). 

64Section 23(a)(1) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t–2(a)(1). 

through the delivery day, reflect actual 

flows on their systems as well.57 In 

contrast, intrastate pipelines often sell 

gas directly to customers under a variety 

of regulatory regimes. Much of such gas 

can flow without being scheduled, 

especially for customers’ variable 

requirements. Similarly, many direct 

pipeline purchases from the wellhead 

and from smaller gathering systems 

need not be scheduled. Given the 

different business models, and the 

likelihood that scheduling information 

on intrastate pipelines would be 

unhelpful, we conclude that actual flow 

information, posted after-the-fact, would 

be needed to develop an understanding 

of these flows. 

33. The daily posting of flow 

information by intrastate pipelines 

would provide several benefits to the 

functioning of natural gas markets in 

ways that would protect the integrity of 

physical, interstate natural gas markets, 

protect fair competition in those 

markets and consequently serve the 

public interest by better protecting 

consumers. First, by providing a more 

complete picture of supply and demand 

fundamentals, these postings would 

improve market participants’ ability to 

assess supply and demand and to price 

physical natural gas transactions. 

Second, during periods when the U.S. 

natural gas delivery system is disturbed, 

for instance due to hurricane damage to 

facilities in the Gulf of Mexico, these 

postings would provide market 

participants a clearer view of the effects 

on infrastructure, the industry, and the 

economy as a whole. Finally, these 

postings would allow the Commission 

and other market observers to identify 

and remedy potentially manipulative 

activity. We discuss each of these points 

in turn. 

34. First, the proposed daily intrastate 

pipeline capacity and volume postings 

would improve market participants’

ability to assess supply and demand and 

price physical natural gas transactions 

by providing a more complete picture of 

supply and demand fundamentals.58 As 

discussed above and noted in comments 

filed in these proceedings, interstate 

pipeline information does not provide a 

complete picture of the supply and 

demand fundamentals that apply to 

interstate commerce because much of 

the natural gas in the U.S. is moved 

through the intrastate pipeline system.59

35. Second, the proposed daily 

intrastate pipeline capacity and volume 

postings would provide market 

participants—and the Commission in its 

market oversight efforts—a clearer view 

of the effects on infrastructure, the 

industry, and the economy as a whole 

during periods when the U.S. natural 

gas delivery system is disturbed. For 

example, after landfall of hurricanes 

Katrina and Rita in late 2005, even the 

most interested of governmental and 

commercial market observers were not 

able to obtain complete information 

regarding the extent of the damage at 

production facilities.60 By monitoring 

receipt and delivery points for 

production facilities on interstate 

pipelines, market participants were able 

to obtain only a limited sense of 

production facility output.61 Similarly, 

market participants, State commissions 

and others were unable to assess effects 

on natural gas consumption in the Gulf 

Coast, including consumption by the 

petrochemical industry, for some 

period. The significance and duration of 

these effects on this industry—

vulnerable to energy price and 

availability disruptions—remain 

unclear. This proposal would allow 

interested governmental and private 

parties to gain a much better picture of 

disruptions in natural gas flows in the 

case of future hurricanes in the Gulf 

region.62

36. Third, the proposed daily 

intrastate pipeline capacity and volume 

postings would allow the Commission 

and other market observers to identify 

and remedy potentially manipulative 

activity more actively by tracking price 

movement in the context of natural gas 

flows.63 In particular, information 

regarding availability on intrastate 

pipelines could be used to track 

manipulative or unduly discriminatory 

behavior intended to cause harm to 

consumers by distorting market prices 

in interstate commerce. For example, 

Commission staff overseeing markets 

routinely check for unused interstate 

pipeline capacity between 

geographically distinct markets with 

substantially different prices as a sign 

that flows may be managed to 

manipulate prices. Given the 

importance of intrastate pipeline 

connections to 13 major pricing hubs, 

including Henry Hub, as discussed 

above, the lack of flow information on 

intrastate pipelines hinders the 

Commission’s market oversight and 

enforcement efforts. 

37. This benefit comports with EPAct 

2005, in which Congress directed the 

Commission to facilitate price 

transparency in physical, interstate 

natural gas markets ‘‘with due regard for 

the public interest, the integrity of those 

markets, fair competition, and the 

protection of consumers.’’ 64 By this 

language, Congress intended that the 

improvement of Commission market 

oversight activities is a legitimate 

justification for proposing rules under 

the natural gas transparency provisions. 

Monitoring and preventing 

manipulative or unduly discriminatory 

activity would meet the Commission’s 

responsibility for ensuring the integrity 

of the physical interstate natural gas 

markets. The proposal to make intrastate 

pipeline information available to the 

public would assist the Commission in 

fulfilling that responsibility. 

D. Solicitation of Comments 

38. The Commission seeks comments 

on its proposal to be codified in subpart 

A of part 284 of the Commission’s 

regulations that intrastate pipelines be 

required to post daily to the Internet the 

capacities of, and volumes flowing 

through their major receipt and delivery 


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65The Commission is not proposing to amend 

subparts C and D of part 284, because those 

subparts govern interstate transactions by intrastate 

pipelines under the authority of the Natural Gas 

Policy Act. The instant proposal is based on the 

Commission’s Natural Gas Act jurisdiction as 

amended by EPAct 2005. 

66Section 23(d)(2) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t–2(d)(2). 67 18 CFR 284.13(d)(1). 

68Pursuant to § 375.314(f) and (g), the Director of 

the Office of Enforcement or the Director’s designee, 

could deny or grant waivers of the requirements of 

this form and could act on requests for extensions 

of time to file the form. 18 CFR 375.314(f) and (g). 

The Commission anticipates directing staff to make 

changes to the format of the form. Cf. Revised Public 

Utility Filing Requirements, 106 FERC ¶ 61,281 

(2004) (directing staff to make future changes to the 

Electric Quarterly Reports). 

69Although the standard contract for the most 

significant natural gas futures market traded on the 

New York Mercantile Exchange (NYMEX) requires 

physical delivery, the vast majority of those 

transactions do not go to delivery. For the purposes 

of this proposal, and despite the particulars of the 

futures contract language, we intend to explicitly 

exclude volumes of futures transactions from 

consideration. Indeed, information about volumes 

of futures transactions is already publicly available 

through a variety of commercial means or directly 

through NYMEX at http://www.nymex.com, so 

collection of the information would be redundant 

and unnecessary. 

points and mainline segments.65 In 

particular, the Commission seeks 

comment on whether market 

participants believe that the posting of 

flow information on intrastate pipelines 

would provide valuable additional 

information on supply and demand 

fundamentals for interstate markets and 

whether such information would be 

sufficient. The Commission also seeks 

comment on the burden this proposal 

would impose on intrastate pipelines. 

Those providing burden estimates 

should provide support for their 

estimate and compare that estimate to 

the burden currently borne by interstate 

pipelines that report capacity 

availability pursuant to § 284.13(d) of 

the Commission’s regulations. 

39. The Commission seeks comment 

on how to define ‘‘major’’ receipt and 

delivery points and mainline segments 

on intrastate systems. The Commission 

does not wish to include extremely 

small points connected to one or a few 

customers, which it would consider 

burdensome and possibly even anticompetitive in certain cases. 

40. The proposal does not make an 

exception for intrastate pipelines 

transporting de minimis volumes. 

Although the natural gas transparency 

provisions mandate that the 

Commission create an exception from 

reporting requirements for ‘‘natural gas 

producers, processors, or users who 

have a de minimis market presence,’’

they do not mandate a de minimis 

exception for natural gas pipelines.66

The Commission seeks comment on 

whether the Commission should create 

a de minimis threshold under which 

certain intrastate pipelines should not 

be required to report or should create a 

method for certain intrastate pipelines 

to seek waiver of these requirements. 

How would such a de minimis 

threshold be measured, for instance, by 

throughput volume? The Commission 

also seeks comment on whether the 

proposed flow posting requirements 

should apply to all intrastate pipelines, 

or whether it should be limited to 

intrastate pipelines in states where a 

significant percentage of supply and 

demand information is not observable 

through current interstate pipeline 

posting requirements. 

41. The Commission seeks comment 

on the difference in approach applied to 

intrastate and interstate pipelines by 

requiring intrastate pipelines to post 

actual natural gas flows instead of 

scheduled flows. Should the 

Commission require intrastate pipelines 

to post information about capacity 

availability at major points on a daily 

basis, similar, or identical, to the 

information that interstate pipelines are 

required to post under § 284.13(c)? Is it 

possible to determine major intrastate 

pipeline flows using schedule 

information? 

42. Regarding the method of posting, 

the Commission seeks comment on the 

format for posting flow information by 

intrastate pipelines, including whether 

intrastate pipelines should follow the 

standards of the North American Energy 

Standards Board. If not, what additional 

accommodations would need to be 

made for their different operations? 

Further, how would § 284.12, which 

outlines formatting requirements for 

interstate pipeline postings be modified 

to accommodate intrastate pipelines and 

to accommodate posting of flow 

information as opposed to scheduling 

information? Also, the timing in the 

proposal requires the posting of flow 

information within 24 hours from the 

close of the gas day on which gas flows 

(i.e., on or before 9 a.m. central clock 

time for flows occurring on the gas day 

that ended 24 hours before). Does this 

timing create an undue burden? Is it 

sufficiently timely? 

43. Finally, the Commission seeks 

comment on whether it should revise 

the posting requirements applicable to 

interstate pipelines provided in 

§ 284.13(d)(1) of the Commission’s 

regulations.67 Since those posting 

requirements were mandated, have 

there been changes in technology or the 

marketplace that justify changing the 

posting requirements for interstate 

pipelines? In addition to current posting 

requirements, should interstate 

pipelines be required to post actual flow 

information as we propose to require 

intrastate pipelines to do? Would 

posting of actual flow information 

provide useful information regarding 

actual capacity use, for instance, by 

providing information regarding nonotice service? 

V. Annual Reporting of Natural Gas 

Transactions 

A. Proposal 

44. The Commission proposes that 

buyers and sellers of more than a de 

minimis volume of natural gas be 

required to report aggregate numbers 

and volumes of relevant transactions in 

an annual filing using an electronic 

form to be provided by the Commission 

on its Internet Web page. This proposal 

would be codified at § 260.401 of the 

Commission’s regulations. This 

information would provide regularly an 

estimate of (a) the size of the physical 

domestic natural gas market, (b) the use 

of index pricing in that market, (c) the 

size of the fixed-price trading market 

that produces price indices, and (d) the 

relative size of major traders. Although 

the natural gas transparency provisions 

authorize the Commission to require 

reporting of detailed transaction-bytransaction information, the 

Commission proposes obtaining this 

more limited set of information 

designed to assess the market. The 

requirement would be applied to 

companies both traditionally 

jurisdictional to the Commission and 

others. This form would also serve to 

identify users of blanket certificates and 

document their reporting status as 

required under § 284.403(c) and 

§ 284.288(a), discussed further below. A 

proposed form for the report is set forth 

in Appendix A.68

45. Under the proposed reporting 

requirement, certain natural gas buyers 

and sellers would identify themselves to 

the Commission and report summary 

information about physical natural gas 

transactions for the previous calendar 

year including: (a) Their total amount of 

physical 69 natural gas transactions by 

number and volume; (b) the breakdown 

of their transactions by purchases and 

sales; (c) the number and volume 

breakdown of their purchases and sales 

by whether they were conducted in 

monthly or daily spot markets; and (d) 

the number and volume breakdown of 

their purchases and sales by type of 

pricing, in particular whether that 

pricing was fixed or indexed. 


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20800 Federal Register / Vol. 72, No. 80 / Thursday April 26, 2007 / Proposed Rules 

70The Commission recognizes that few if any 

interstate natural gas pipelines still make wholesale 

sales. Nevertheless, if they were to sell gas at 

wholesale in interstate commerce, they would be 

subject to the proposed rule. More relevant, of 

course, is the fact that all of their affiliates making 

wholesale sales in interstate commerce would be 

subject to the proposed rule. 

71Section 23(a)(1) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t–2(a)(1). 

72Section 23(a)(2) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t–2(a)(2) (emphasis added). 

73Policy Statement on Price Indices at P 34. 74Section 23(a)(2) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t–2(a)(2). 75Section 23(a)(4) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t–2(a)(4). 76 In its supplemental comments, Platt’s provided 

information regarding its use of physical basis 

transactions in compiling monthly indices. 

Supplemental Comments of Platt’s, Transparency 

Provisions of the Energy Policy Act, Docket No. 

AD06–11–000 (filed Feb. 23, 2007). 

77Comments of Platt’s, at 6, Transparency 

Provisions of the Energy Policy Act, Docket No. 

AD06–11–000, (filed Nov. 1, 2006). 78See, 15 U.S.C. 717b–717i (2000). 79To be codified at 15 U.S.C. 717t–2. 

80Section 23(d)(2) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t–2(d)(2). 

46. In addition, a natural gas seller 

would be required to state whether it 

operates under blanket certificate 

authority under § 284.402 of the 

Commission’s regulations, and whether 

it reports transactions to price index 

publishers and whether any such 

reporting complies with the standards 

provided in § 284.403(a). Similarly, an 

interstate pipeline would be required to 

state whether it operates under blanket 

certificate authority under § 284.284 of 

the Commission’s regulations, and 

whether it reports transactions to price 

index publishers and whether any such 

reporting complies with the standards 

provided in § 284.288(a).70

B. Legal Considerations 

47. The Commission intends 

‘‘physical natural gas transaction’’ to 

mean a sale or purchase of natural gas 

with an obligation to deliver or receive 

physically, even if the natural gas is not 

physically transferred due to some 

offsetting or countervailing trade. Thus, 

with one explicit exception, even if the 

transaction does not go to physical 

delivery, it would still be included as a 

physical transaction. The exception is 

physically settled futures contracts. The 

Commission would require such a 

contract to be reported only if it actually 

goes to delivery. Although the language 

of the natural gas transparency 

provisions address sales of natural gas, 

it does not limit the Commission from 

seeking information about natural gas 

purchases as well as sales. They are 

simply different sides of the same 

transaction. Congress directed the 

Commission to ‘‘facilitate price 

transparency in markets for the sale 

* * * of physical natural gas in 

interstate commerce,’’ but that language 

does not limit the Commission to 

seeking information regarding only 

sales.71 Purchases of physical natural 

gas are also a part of such markets; there 

is no market for the sale of natural gas 

that does not include purchases. Nor 

does the natural gas transparency 

provision language that provides for the 

‘‘dissemination * * * of information 

about the availability and prices of 

natural gas sold at wholesale and 

interstate commerce’’ restrict the 

Commission.72 As a practical matter, 

information regarding purchases of 

natural gas is necessary to evaluate the 

reliability of information regarding sales 

of natural gas. Both types of information 

are necessary to obtain a useful gauge of 

price transparency in natural gas 

markets. 

48. Further, in its Policy Statement, 

the Commission states that data 

providers should provide both sale and 

purchase information to price index 

developers.73 As the Policy Statement 

and related Commission initiatives were 

major Commission proceedings 

regarding this topic, we can presume 

that Congress was aware of this Policy 

Statement when it wrote the 

transparency provisions and, thus, 

contemplated that the Commission 

would continue its practice of seeking 

both sale and purchase information in 

facilitating price transparency. 

49. The proposed public nature of the 

filings would comport with the 

transparency provisions which require 

that any such rules ‘‘provide for the 

dissemination, on a timely basis, of 

information * * * to the public.’’ 74 The 

transparency provisions further direct 

the Commission to ‘‘rely on [existing 

price publishers and providers of trade 

processing services] to the maximum 

extent possible.’’ 75 By requiring public 

filings by market participants, the 

Commission would provide an 

opportunity for trade publications and 

commercial vendors to aggregate the 

information and provide any analysis 

should a desire for such services arise 

in the energy information marketplace. 

C. Discussion 

50. Because of the way transactions 

currently take place in the natural gas 

industry, there is no way to estimate in 

even the broadest terms the overall size 

of the natural gas market or its 

breakdown by types of contract 

provision, including pricing and term 

(e.g., spot or longer term forwards).76

More particularly, there is no way to 

determine important volumetric 

relationships between the fixed-price 

day-or month-ahead transactions that 

form price indices or to determine the 

use of price indices themselves. As 

noted by the price index developer 

Platt’s, the question of what is the total 

size of the traded market has ‘‘hung over 

the gas market for years.’’ 77 Without the 

most basic of volumetric information, 

the Commission has been hampered in 

its oversight and its ability to assess the 

adequacy of price-forming transactions. 

Market participants are likewise unable 

to evaluate their use of indexed 

transactions. Typically, market 

participants rely on index-price 

transactions as a way to reference 

market prices without taking on the 

risks of active trading. These market 

participants rely on index prices, often 

whether or not those prices are derived 

from a robust market of fixed-price 

transactions. 

51. Price formation in natural gas 

markets makes no distinction between 

transactions that are jurisdictional to the 

Commission under the Natural Gas Act 

absent new section 23 of that statute and 

those that are not. As discussed above, 

generally, while the Commission’s 

traditional jurisdiction arising from 

sections 3 through 10 of the Natural Gas 

Act is limited to ‘‘natural gas 

compan[ies],’’ 78 this limitation is not 

applicable to the Commission’s 

jurisdiction under new section 23 of the 

Natural Gas Act,79 the natural gas 

transparency provisions. As a 

consequence, in order to assess the size 

and structure of U.S. natural gas 

markets, information is required from 

transacting companies whether or not 

they fall under the Commission’s 

traditional jurisdiction. 

52. Notwithstanding Congress’s 

broadening of the scope of the 

Commission’s jurisdiction in new 

section 23 of the Natural Gas Act with 

respect to transparency, Congress also 

mandated that the Commission exempt 

‘‘natural gas producers, processors or 

users who have a de minimis market 

presence [from compliance] with the 

reporting requirements of this 

section.’’ 80 In establishing a de minimis 

threshold for reporting, which would 

apply to all market participants, the 

Commission seeks to require reporting 

from only those market participants 

whose transactions could have an effect 

on the price for the sale of physical 

natural gas in interstate commerce and 

to obtain reporting from a sufficient 

number of market participants to 

ensure, in the aggregate, an accurate 

picture of the physical natural gas 

market as a whole. To this end, we 

propose to define such a de minimis 

market participant as a market 


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Federal Register / Vol. 72, No. 80 / Thursday April 26, 2007 / Proposed Rules 20801 

81Proposed 18 CFR 284.401 (defining de minimis 

market participant). The Commission proposes to 

define a market participant as ‘‘any buyer or seller 

that engaged in physical natural gas transactions for 

the previous calendar year.’’ Proposed 18 CFR 

284.401. 

82 Department of Energy, Energy Information 

Administration, Natural Gas Summary, Data Series: 

Total Consumption, 2006, http://tonto.eia.doe.gov/ 

dnav/ng/ng_sum_lsum_dcu_nus_a.htm. 

83The Commission makes this proposal under 

section 4, 5 and 7 of the Natural Gas Act, 15 U.S.C. 

717c, 717d, and 717f (2000), and, thus, is not 

required to create a de minimis exception for 

holders of blanket marketing certificates or for 

interstate pipelines that have blanket unbundled 

sales services certificates. 

84Order No. 644 at P 70–72. 

85 18 CFR 284.403(a). 

86See, Pinnacle West Capital Corporation and 

Pinnacle West Marketing and Trading Co., LLC, 

Investigation of Terms and Conditions of MarketBased Rate Tariffs and Authorizations, Docket No. 

EL01–118–000 (filed Feb. 12, 2007). 

87Tr. at 13–14 (Ms. Lewis-Raymond on behalf of 

the American Gas Association) (calling for 

mandatory reporting of fixed-price trades); Tr. at 

18–19 (Mr. Les Fyock on behalf of the American 

Public Gas Association (APGA)) (calling for 

mandatory price reporting); Comments of the 

APGA, Transparency Provisions of the Energy 

Policy Act, Docket No. AD06–11–000 (filed Nov. 1, 

2006) (same). 

88See, e.g., Tr. at 12–13 (Mr. Christopher Conway 

on behalf of Conoco-Phillips Gas and Power, the 

Natural Gas Supply Association, and the 

Independent Producers Association of America) 

(asserting that mandatory price reporting could 

drive market participants away from reportable 

transactions, thereby, possibly reducing liquidity); 

Tr. at 35–36, 38–39 (Mr. Alex Strawn on behalf of 

the Process Gas Consumers Group) (asserting that 

mandatory reporting of fixed price transactions 

would drive market participants to use index-price 

transactions, thereby, reducing liquidity); 

Comments of Independent Petroleum Association of 

America, at p. 3, Transparency Provisions of the 

Energy Policy Act, Docket No. AD06–11–000 (filed 

Nov. 1, 2006) (mandatory reporting would push 

market participants away from reportable 

transactions and cause them to do more index-price 

transactions); Comments of Natural Gas Supply 

Association, Transparency Provisions of the Energy 

Policy Act, Docket No. AD06–11–000 (filed Nov. 1, 

2006) (similar). 

89Section 23(b)(2) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t–2(b)(2). 

participant that engages in physical 

natural gas transactions that amount by 

volume to less than 2,200,000 MMBtus 

annually.81 This figure is based on the 

rather simple calculation of one-ten 

thousandth (1⁄10,000th) of the annual 

physical volumes consumed in the 

United States, which is approximately 

22 trillion cubic feet (Tcf) (or roughly 

22,000,000,000 MMBtus).82

Consequently, a de minimis market 

participant would trade the equivalent 

of less than one standard NYMEX 

futures contract per day. Although a 

market participant that contracts for 

1⁄10,000th of the nation’s annual physical 

volume may appear to have little effect 

on natural gas prices, that participant 

may be transacting only at one location 

and, thus, have a much greater pricing 

effect there. Although we do not expect 

annual physical volumes consumed in 

the United States to remain constant, 

the figure of 22 Tcf is a useful snapshot 

of consumption and a useful startingpoint for setting the de minimis 

exemption. 

53. The proposed reporting 

requirement would also shift the 

notification regarding the index 

reporting practices of companies selling 

under blanket certificates to this annual 

form and away from the prior practice 

of a letter notification upon a change in 

company policy. Consequently, if a 

market participant makes use of its 

blanket certificate authority, even if its 

sales are de minimis, it would still be 

required to report, but only its 

identification information, whether it 

reports transaction information to price 

index publishers, and whether any such 

reporting complies with the regulations 

governing reporting to price index 

publishers. This proposal would be 

codified at § 284.403(a) for blanket 

marketing certificate holders and at 

§ 284.288(a) for interstate pipelines with 

unbundled sales service certificates. The 

Commission would impose these 

requirements on all blanket certificate 

holders regardless of size.83

54. In Order No. 644, the Commission 

required each holder of blanket 

marketing certificate authority to notify 

the Commission whether it engages in 

reporting of its transactions to 

publishers of electricity or natural gas 

price indices according to the standards 

set out in the Commission’s Policy 

Statement on Price Indices.84 Pursuant 

to § 284.403(a) of the Commission’s 

regulations, if a holder of a blanket 

marketing certificate changes its 

reporting standards, it is required to 

report that change to the Commission.85

Pursuant to § 284.288(a) of the 

Commission’s regulations, if an 

interstate pipeline that holds blanket 

unbundled sales service certificate, it is 

similarly required to report that change 

to the Commission. 

55. Several data providers asked for 

clarification as to whether they may 

report certain classes of products traded, 

but not others. In one instance, related 

to electricity, the data provider was 

reporting all transactions other than 

next-hour electric transactions.86 We 

clarify that a data provider remains 

eligible for the safe harbor provisions if 

it reports certain products but not 

others, provided that it provides all of 

the same type of transactions and that 

it notifies the Commission which 

products it will report in its annual 

filing or other notification. A data 

provider would be required to notify the 

commission of any change in the types 

of products it reports within 15 days of 

any such change. We intend to reiterate 

this clarification in the preamble of any 

final rule issued in these proceedings. 

56. At the October 13, 2006 technical 

conference, several participants called 

for mandatory reporting of all fixedprice transactions.87 Mandatory 

reporting would appear to provide 

additional benefits in that it could assist 

in determining whether the price 

indices are an accurate reflection of 

underlying fixed-price trading. Market 

participants, State commissions, and 

this Commission could gain a clearer 

sense of the volume and number of 

natural gas transactions that form prices 

by location and duration. For the 

following reasons, however, we believe 

that mandatory reporting is not 

appropriate at this time. 

57. First, mandatory reporting of 

certain transactions would create an 

incentive for wholesale buyers and 

sellers to consider structuring 

transactions based on avoiding reporting 

requirements rather than simply on the 

economics of the transaction. Even very 

subtle shifts in the form of transactions 

could easily make them non-reportable 

in any pre-defined system. For instance, 

if the Commission required reporting of 

fixed-price, day-ahead transactions, 

market participants could create twoday transactions, achieve substantially 

the same economic result and avoid 

reporting. 

58. Second, buyers and sellers might 

shift away from fixed-price transactions 

to indexed-price transactions. Fixedprice transactions could easily decrease 

to the point that indices that rely on 

them would no longer represent reliable 

indicators of the market. Such indices 

would likely become more volatile as 

they moved more in response to fewer 

transactions. At the October 13, 2006 

technical conference, several panelists 

raised similar concerns and advocated 

against mandatory price reporting.88

59. Third, broad availability of 

detailed transaction data might prove to 

be anticompetitive. By contrast, our 

proposal herein is intended to adhere to 

the requirement provided in section 23 

of the Natural Gas Act that 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.’’ 89

In its comments in these proceedings, 

the Department of Justice echoed this 

caution, stating that the Commission 

‘‘may be able to achieve the benefits of 


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90Comments of the Department of Justice, 

Antitrust Division, Transparency Provisions of the 

Energy Policy Act, Docket No. AD06–11–000 (filed 

Jan. 25, 2007). The Department of Justice’s 

comments focused on the electricity markets, 

although it did note that the same general 

considerations that applied to electricity markets 

also applied to natural gas markets. 

91See, e.g., Tr. at 22–24, Comments of Industrial 

Energy Consumers of America, (arguing that 

because the physical and financial natural gas 

markets are linked, the Commission and the 

Commodity Futures Trading Commission should 

make Over-the-Counter markets more transparent.) 

92Federal Energy Regulatory Commission, 2006 

State of the Markets Report, at 48–50 (Jan. 2007), 

http://www.ferc.gov/market-oversight/marketoversight.asp, (follow link to the State of the 

Markets Full Report). 

93 In the transparency provisions, Congress 

mandated that this Commission and the CFTC 

conclude a memorandum of understanding relating 

to information sharing to include ‘‘provisions 

ensuring that information requests to markets 

within the respective jurisdiction of each agency are 

properly coordinated to minimize duplicative 

information requests, and provisions regarding the 

treatment of proprietary trading information.’’

Section 23(c)(1) of the Natural Gas Act, 15 U.S.C. 

717t–2(c)(1); see also section 220(c)(1) of the 

Federal Power Act, 16 U.S.C. 824t(c)(1) (identical 

language). The Commission and the CFTC entered 

into the memorandum of understanding on October 

12, 2005. Memorandum of Understanding Between 

FERC and the CFTC Regarding Information Sharing 

And Treatment Of Proprietary Trading And Other 

Information, available at http://www.ferc.gov/legal/ 

maj-ord-reg/fed-sta/ene-pol-act.asp (follow 

‘‘Interagency/Tribal,’’ then, ‘‘MOU’’). 

94Tr. at 32 (Comments of Ms. Jane LewisRaymond, American Gas Association) (surmising 

that we currently cannot know the amount of fixedprice transactions and the amount of fixed-price 

trades that make up an index). 

95See supra, notes 5–11. 

96Order on Further Clarification of Policy 

Statement at P 21. 

transparency while limiting its potential 

harm by aggregating, masking, and 

lagging the release of such 

information.’’ 90 The Commission’s 

proposal would not provide for the 

collection and disclosure of 

‘‘transaction-specific information.’’ The 

proposal is intended to avoid facilitating 

anti-competitive behavior in several 

ways: (i) Reported information would 

not include specific price information; 

(ii) reported information would be 

aggregated information over a period of 

one year and not transaction-specific 

information; and (iii) reported 

information would be made on an 

aggregated, national level, and not by 

point or even region. 

60. The Commission also does not 

propose that market participants report 

information regarding their financiallysettled transactions nor regarding their 

physically-settled futures contracts that 

do not go to delivery.91 The 

Commission has noted significant 

interactions among financial, futures 

and physical natural gas markets.92 The 

most direct and important influence of 

this type on physical markets is from 

the futures market, which is regulated 

by the Commodities Futures Trading 

Commission (CFTC). The CFTC actively 

monitors that market, and 

communicates regularly with the 

Commission regarding market matters.93

61. By obtaining the number and 

volume of transactions conducted for 

each market participant, the 

Commission, market participants and 

others would be able to determine the 

overall level of activity of market 

participants in the physical natural gas 

market. In particular, the information 

would provide regularly an estimate of 

(a) The size of the physical U.S. 

domestic natural gas market, (b) the use 

of index pricing in that market, (c) the 

size of the fixed-price trading market 

that produces price indices, and (d) the 

relative sizes of major traders. 

62. The information provided through 

the Commission’s proposal would 

improve the understanding of index 

pricing by interested entities, including 

the market participants and State energy 

regulators who use them. The number 

and volume break-down of transactions 

by price type, fixed-price or index-price, 

should permit an overall assessment of 

the ratio of index-using transactions to 

price-forming transactions, i.e., fixedprice transactions. At present, we do not 

know how much fixed-price 

transactions are a part of the universe of 

natural gas transactions, although they 

may be the minority of natural gas 

transactions.94

63. As noted in the introduction, the 

Commission has taken several steps to 

restore confidence in natural gas index 

prices and their formation.95 By 

obtaining information regarding the 

extent that market participants make 

fixed-price transactions, market 

participants would be able to evaluate 

their confidence in the index prices that 

are formed by those fixed-price 

transactions. By collecting sales and 

purchases information, results could 

also be cross-checked to ensure that 

information was accurate. In effect, total 

sales should roughly equal total 

purchases, with some allowance for de 

minimis buyers and sellers. 

64. The Commission also proposes to 

require a holder of blanket market 

certificates or an interstate pipeline with 

an unbundled sales service certificate to 

notify the Commission annually about 

its reporting of transaction information 

to price index publishers and whether 

any such reporting conforms to the 

Policy Statement. After the Policy 

Statement’s notification requirement 

took effect, we observed that blanket 

marketing certificate holders may have 

overlooked this requirement and we 

provided the opportunity for blanket 

marketing certificate holders to notify 

the Commission by August 1, 2005 of 

their reporting status.96 Based on 

Commission staff’s experience 

monitoring price indices and adherence 

to the Policy Statement, as discussed in 

the introduction, the Commission 

believes that notification on an annual 

basis would make the information more 

reliable. As a further benefit, notifying 

companies would have the opportunity 

to review their practices in coordination 

with their response to the data 

collection proposal described above. 

D. Solicitation of Comments 

65. The Commission seeks comment 

on this proposal, including whether 

market participant responses to the 

questions would provide useful 

information to market participants, State 

commissions, this Commission and the 

public in understanding the natural gas 

market, the price formation process, and 

the use of price indices. 

66. In particular, the Commission 

encourages market participants to 

review the questions (in draft form at 

Appendix A) and determine whether 

they would result in useful information 

for understanding the prices and 

availability of physical natural gas in 

interstate commerce. What adjustments 

might improve these questions? What 

alternative or additional questions 

might add sufficient information to 

justify additional burden on filers? Does 

the format for responses ensure 

consistency for aggregation and 

analysis? The Commission anticipates 

holding meetings, if needed, to consider 

the details of this annual filing 

requirement. 

67. The Commission seeks comment 

on its proposed definition of a de 

minimis market participant. Is this 

threshold sufficiently low to permit a 

comprehensive picture of the U.S. 

wholesale natural gas market? Is it 

sufficiently high so that persons or 

municipalities not able to prices of 

natural gas in interstate commerce are 

not required to report? Is there another, 

more effective bright-line measure that 

allows market participants to determine 

easily whether they are exempt? 

Further, the Commission seeks 

comment on the burden this proposal 

would impose on market participants. 

For instance, is it unduly burdensome 

for market participants to file the 

information by February 15 of each 

year? 

68. The Commission seeks comments 

on its proposal that buyers and sellers 

of more than a de minimis volume of 


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Federal Register / Vol. 72, No. 80 / Thursday April 26, 2007 / Proposed Rules 20803 

97Section 23(a)(1) of the Natural Gas Act, to be 

codified at 15 U.S.C. 717t–2(a)(1). 

98 18 CFR 284.403(a); see, also, 18 CFR 284.288(a) 

(identical language). 

99Section 23(a)(3)(B) and (b) of the Natural Gas 

Act, to be codified at 15 U.S.C. 717t–2(a)(3)(B) and 

(b). 

100 5 CFR 1320.11. 

101The OMB regulations cover both the collection 

of information and the posting of information. 5 

CFR 1320.3(c). Thus, the proposal to post 

information would create an information collection 

burden. 

102 44 U.S.C. 3507(d). 

103See 5 CFR 1320.3(b)(2) (‘‘The time, effort, and 

financial resources necessary to comply with a 

collection of information that would be incurred by 

persons in the normal course of their activities (e.g., 

in compiling and maintaining business records) 

will be excluded from the ‘‘burden’’ if the agency 

demonstrates that the reporting, recordkeeping, or 

disclosure activities needed to comply are usual 

and customary.’’) 

natural gas be required to report 

aggregate numbers and volumes of 

relevant transactions in an annual filing 

with the Commission. Does information 

regarding purchases of natural gas at 

wholesale ‘‘facilitate price transparency 

in markets for the sale and 

transportation of physical natural gas in 

interstate commerce,’’ as provided in 

the natural gas transparency 

provisions? 97

69. The Commission seeks comment 

on whether reporting information 

aggregated by calendar year is adequate. 

Would a monthly breakdown create an 

undue burden compared to providing 

the information by calendar year? 

Would it provide a better understanding 

of the physical natural gas market given 

the seasonal nature of the market? 

70. The Commission seeks comment 

on the proposed modifications to the 

notification requirements regarding 

reporting of transactions to publishers of 

price indices imposed on those entities 

who hold blanket marketing certificates 

in proposed § 284.403(a) and imposed 

on intrastate pipelines with blanket 

unbundled sales service certificates in 

proposed § 284.288(a). Also, as 

currently codified, those sections refer 

to the procedural requirements for 

reporting to publishers of price indices 

‘‘set forth in the Policy Statement on 

Electric and Natural Gas Price Indices, 

issued by the Commission in PL03–3–

000 and any clarifications thereto.’’ 98

Instead of referring to policy statements 

in that proceeding for the procedural 

requirements, should the Commission 

codify in the regulations the procedural 

requirements that such reporting 

entities must follow in reporting 

transactions to publishers of electric and 

natural gas price indices? 

71. The Commission seeks comment 

on making public participant responses 

to these questions through public filing 

requirements. Commenters who suggest 

an alternate method, such as aggregating 

data received before disseminating it to 

the public, should address whether such 

an approach meets the objectives of the 

statute sufficiently. 

72. The Commission seeks comment 

on whether, in lieu of this proposal, to 

require mandatory, detailed transaction 

reporting by market participants. 

Commenters should address the 

burdens and benefits of such an 

approach. Commenters supporting 

mandatory reporting of transactions 

should address the cautions set forth in 

the natural gas transparency provisions 

and echoed by the Department of Justice 

in the discussion above. If detailed 

transaction reporting were mandatory, 

could these concerns be addressed by 

making the reporting non-public, 

aggregating the reported information, 

and disseminating publicly only the 

aggregated information (either by the 

Commission or, as contemplated in the 

natural gas transparency provisions, by 

other entities) subject to sufficient 

disclosure rules? 99

VI. Information Collection Statement 

73. The Office of Management and 

Budget (OMB) regulations require it to 

approve certain reporting and 

recordkeeping (information collection) 

requirements imposed by an agency.100

In this NOPR, the Commission makes 

two proposals that would require the 

posting or collection of information.101

The Commission is submitting 

notification of these proposed 

information collection requirements to 

OMB for its review and approval under 

section 3507(d) of the Paperwork 

Reduction Act of 1995.102

74. The proposal to require intrastate 

pipelines to post flow information 

would impose an information collection 

burden on intrastate pipelines. We 

presume that intrastate pipelines 

already collect flow information for 

receipt and delivery points and, thus, 

the burden that would be imposed by 

this proposed requirement is only for 

the posting of this information in the 

required format.103 The proposal to 

require market participants to file 

annually a form regarding their physical 

natural gas transactions would impose 

an information collection burden on 

market participants. Again, we presume 

that market participants already collect 

transaction information and, thus, the 

burden imposed by this proposed 

requirement is only for completing and 

submitting the form. 

75. OMB regulations require OMB to 

approve certain information collection 

requirements imposed by agency rule. 

The Commission is submitting 

notification of this proposed rule to 

OMB. 

Public Reporting Burden: The start-up 

and annual burden estimates for 

complying with this proposed rule are 

as follows: 

Data collection Number of 

respondents 

Number of 

responses 

per 

respondent 

(per year) 

Estimated 

annual 

burden hours 

per 

respondent 

(hours) 

Total annual 

hours for 

all 

respondents 

Estimated 

start-up 

burden per 

respondent 

(hours) 

Part 284 FERC–xxx: 

Intrastate Pipeline Postings .......................................... 179 365 183 32,757 160 

Annual Reporting Requirement .................................... 1,500 1 4 6,000 40 

Total ....................................................................... ........................ ........................ ........................ 38,757 ........................

The total annual hours for collection 

(including recordkeeping) for all 

respondents is estimated to be 38,757. 

Information Collection Costs: The 

average annualized cost for each 

respondent is projected to be the 

following (savings in parenthesis): 


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20804 Federal Register / Vol. 72, No. 80 / Thursday April 26, 2007 / Proposed Rules 

104Order No. 486, Regulations Implementing the 

National Environmental Policy Act, 52 FR 47897 

(Dec. 17, 1987), FERC Stats. & Regs. Preambles 

1986–1990 ¶ 30,783 (1987). 

105 18 CFR 380.4(a)(5) and (a)(27). 

106 5 U.S.C. 601–612. 

107This industry comprises establishments 

primarily engaged in the pipeline transportation of 

natural gas from processing plants to local 

distribution systems. 2002 North American Industry 

Classification System (NAICS) Definitions, http:// 

www.census.gov/epcd/naics02/def/ND486210.HTM. 

108See Table of Small Business Size Standards, 

U.S. Small Business Administration (effective July 

31, 2006), available at http://www.sba.gov/idc/ 

groups/public/documents/sba_homepage/ 

serv_sstd_tablepdf.pdf. 

109For the purposes of analyzing the impact of 

the proposed filing requirement on small entities, 

the Commission classifies market participants 

under the NAICS category of ‘‘Natural Gas 

Distribution,’’ Code 221210, which includes gas 

marketers, and establishments engaged in gas 

distribution. Under that classification, a small 

entity is any entity with less than 500 employees. 

See Table of Small Business Size Standards, U.S. 

Small Business Administration (effective July 31, 

2006), available at http://www.sba.gov/idc/groups/ 

public/documents/sba_homepage/ 

serv_sstd_tablepdf.pdf. 

Annualized capital/ 

startup costs (10 

year amortization) 

Annual costs Annualized costs 

total 

FERC–xxx: 

Intrastate Pipeline Postings .......................................................................... $1,600 $18,300 $19,900 

Transaction Reporting Requirement ............................................................ 400 400 800 

Title: FERC–xxx. 

Action: Proposed Information Posting 

and Information Filing. 

OMB Control No: 

Respondents: Business or other for 

profit. 

Frequency of Responses: Daily posting 

requirements and annual filing 

requirements. 

Necessity of the Information: The 

daily posting of flow information by 

intrastate pipelines is necessary to 

provide information regarding the price 

and availability of natural gas to market 

participants, State commissions, the 

FERC and the public. The annual filing 

of transaction information by market 

participants is necessary to provide 

information regarding the size of the 

physical natural gas market, the use of 

the natural gas spot markets and the use 

of fixed and index price transactions. 

Internal Review: The Commission has 

reviewed the requirements pertaining to 

natural gas pipelines and natural gas 

market participants and determined 

they are necessary to provide price and 

availability information regarding the 

sale of natural gas in interstate markets. 

76. These requirements conform to 

the Commission’s plan for efficient 

information collection, communication, 

and management within the natural gas 

industry. The Commission has assured 

itself, by means of internal review, that 

there is specific, objective support for 

the burden estimates associated with the 

information posting requirements. The 

Commission seeks comment on these 

estimates. 

77. Interested persons may obtain 

information on the reporting 

requirements by contacting: Federal 

Energy Regulatory Commission, 888 

First Street, NE., Washington, DC 20426, 

[Attention: Michael Miller, Office of the 

Chief Information Officer], phone: (202) 

502–8415, fax: (202) 208–2425, e-mail: 

Michael.Miller@ferc.gov. Comments on 

the requirements of the proposed rule 

also may be sent to the Office of 

Information and Regulatory Affairs, 

Office of Management and Budget, 

Washington, DC 20503 [Attention: Desk 

Officer for the Federal Energy 

Regulatory Commission]. 

78. Comments on the requirements of 

the proposed rule may also be sent to 

the Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Washington, DC 20503 

[Attention: Desk Officer for the Federal 

Energy Regulatory Commission] (202) 

395–4650 or 

oira_submission@omb.eop.gov. 

VII. Environmental Analysis 

79. The Commission is required to 

prepare an Environmental Assessment 

or an Environmental Impact Statement 

for any action that may have a 

significant adverse effect on the human 

environment.104 The actions taken here 

fall within categorical exclusions in the 

Commission’s regulations for 

information gathering, analysis, and 

dissemination, and for sales, exchange, 

and transportation of natural gas that 

requires no construction of facilities.105

Therefore, an environmental assessment 

is unnecessary and has not been 

prepared in this rulemaking. 

VIII. Regulatory Flexibility Act 

Analysis 

80. The Regulatory Flexibility Act of 

1980 (RFA) generally requires a 

description and analysis of final rules 

that will have significant economic 

impact on a substantial number of small 

entities.106 The two proposals in this 

NOPR will not have a significant 

economic impact on a substantial 

number of small entities. 

81. The proposal to require daily 

postings by intrastate pipelines will not 

impact small entities. Natural gas 

pipelines are classified under NAICS 

code, 486210, Pipeline Transportation 

of Natural Gas.107 A natural gas pipeline 

is considered a small entity for the 

purposes of the Regulatory Flexibility 

Act if its average annual receipts are less 

than $6.5 million.108 The Commission 

does not believe that any intrastate 

pipeline has receipts less than $6.5 

million. Thus, the daily posting 

proposal will not impact small entities. 

82. The proposal to require annual 

reporting of physical natural gas 

transactions will have minimal impact 

on small entities.109 By incorporating a 

de minimis exemption into the 

regulations, the Commission has 

reduced the number of small entities 

subject to the requirements; de minimis 

entities without blanket certificates will 

not be required to report. This reporting 

proposal will affect small entities but 

the burden on them will be minimal. 

For each entity, small or otherwise, that 

is required to comply with the annual 

reporting requirement, the Commission 

estimates that the compliance would 

require a one-time cost of approximately 

$4,000 and an annual cost thereafter of 

$400. Although some costs would 

increase for market participants with a 

greater number of transactions, we 

expect that that increase would be likely 

offset because such entities would have 

already compiled information regarding 

their transactions in the aggregate. The 

Commission bases its one-time cost 

estimate on an assumption that it would 

take approximately one person one 

week to set up the reporting and file the 

report initially and that their time costs 

$100 per hour. The Commission bases 

its annual estimate on an assumption 

that it would take one person four hours 

to compile the information and that his 

or her time costs $100 per hour. On an 

annualized basis, costs would amount to 

approximately $1,200 per entity. This 

amount is not a significant burden on 

small entities. The Commission seeks 

comment on its Regulatory Flexibility 

Act analysis and the assumptions on 

which it is based. 

IX. Comment Procedures 

83. The Commission invites interested 

persons to submit comments on the 


jlentini on PROD1PC65 with PROPOSALS
Federal Register / Vol. 72, No. 80 / Thursday April 26, 2007 / Proposed Rules 20805 

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 June 11, 2007. Reply 

comments are due July 10, 2007. 

Comments must refer to Docket No. 

RM07–10–000, and must include the 

commenter’s name, the organization 

they represent, if applicable, and their 

address in their comments. Comments 

may be filed either in electronic or 

paper format. 

84. Comments may 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 

and requests commenters to submit 

comments in a text-searchable format 

rather than a scanned image format. 

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. 

85. 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. 

X. Document Availability 

86. 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 p.m. Eastern time) at 888 First 

Street, NE., Room 2A, Washington DC 

20426. 

87. 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. 

88. User assistance is available for 

eLibrary and the FERC’s Web site during 

normal business hours from our Help 

line at (202) 502–8222 or the Public 

Reference Room at (202) 502–8371, 

Press 0, TTY (202) 502–8659. E-Mail the 

Public Reference Room at 

public.referenceroom@ferc.gov. 

List of Subjects 

18 CFR Part 260 

Natural gas; Reporting and 

recordkeeping requirements. 

18 CFR Part 284 

Continental Shelf; Incorporation by 

reference; Natural gas; Reporting and 

recordkeeping requirements. 

By direction of the Commission. 

Philis J. Posey, 

Deputy Secretary. 

In consideration of the foregoing, the 

Commission proposes to amend parts 

260 and 284 Chapter I, Title 18, Code of 

Federal Regulations, to read as follows. 

PART 260—STATEMENTS AND 

REPORTS (SCHEDULES) 

1. The authority citation for part 260 

continues to read as follows: 

Authority: 15 U.S.C. 717–717w, 3301–

3432; 42 U.S.C. 7101–7352. 

2. Section 260.401 is added to read as 

follows: 

§ 260.401 FERC Form No. [X], Annual 

Reporting of Natural Gas Transactions and 

Blanket Certificate Authorities. 

Unless otherwise exempted or granted 

a waiver by Commission rule or order, 

each natural gas market participant that 

is not a de minimis market participant 

as defined in § 284.401 of this chapter 

and each de minimis market participant 

that holds a blanket marketing 

certificate under § 284.402 of this 

chapter or a blanket unbundled sales 

service certificate under § 284.284 of 

this chapter must file with the 

Commission by February 15, 2008, and 

by February 15 of each year thereafter, 

a report, FERC Form No. [X], for the 

prior calendar year. Every such report 

must be prepared in conformance with 

the Commission’s software and 

guidance posted and available for 

downloading from the FERC Web site 

(http://www.ferc.gov). 

PART 284—CERTAIN SALES AND 

TRANSPORATION OF NATURAL GAS 

UNDER THE NATURAL GAS POLICY 

ACT OF 1978 AND RELATED 

AUTHORITIES 

3. The authority citation for part 284 

continues to read as follows: 

Authority: 15 U.S.C. 717–717w, 3301–

3432; 42 U.S.C. 7101–7352; 43 U.S.C. 1331–

1356. 

4. Section 284.14 is added to read as 

follows: 

§ 284.14 Intrastate pipeline flow 

information. 

An intrastate pipeline must provide 

on a daily basis on an Internet Web site 

and in downloadable file formats, in 

conformity with § 284.12 of this chapter, 

access to information on flowing 

volumes and capacities at each major 

receipt point, mainline segment, and 

delivery point on its pipeline. This 

information must be posted within 24 

hours from the close of the gas day on 

which gas flows, i.e., on or before 9:00 

a.m. central clock time for flows 

occurring on the gas day that ended 24 

hours before. 

5. In § 284.288, paragraph (a) is 

revised to read as follows: 

§ 284.288 Code of conduct for unbundled 

sales service. 

(a) To the extent Seller engages in 

reporting of transactions to publishers of 

electricity or natural gas indices, Seller 

shall provide accurate and factual 

information, and not knowingly submit 

false or misleading information or omit 

material information to any such 

publisher, by reporting its transactions 

in a manner consistent with the 

procedures set forth in the Policy 

Statement on Natural Gas and Electric 

Price Indices, issued by the Commission 

in Docket No. PL03–3–000 and any 

clarifications thereto. Seller shall notify 

the Commission as part of its annual 

reporting requirement in § 260.401 of 

this chapter whether it reports its 

transactions to publishers of electricity 

and natural gas indices. Seller shall 

notify the Commission within 15 days 

of any subsequent change to its 

transaction reporting status. In addition, 

Seller shall adhere to such other 

standards and requirements for price 

reporting as the Commission may order. 

* * * * * 

6. In § 284.401, definitions of ‘‘de 

minimis market participant’’ and 

‘‘market participant’’ are added in 

alphabetical order to read as follows: 

§ 284.401 Definitions. 

* * * * * 

De minimis market participant. For 

purposes of this subpart, a de minimis 

market participant is a market 

participant that engaged in physical 

natural gas transactions that by volume 

amounted to less than 2,200,000 

MMBtus for the previous calendar year. 

Market participant. For purposes of 

this subpart, a market participant is any 

buyer or seller that engaged in physical 

natural gas transactions the previous 

calendar year. 

7. In § 284.403, paragraph (a) is 

revised to read as follows: 


jlentini on PROD1PC65 with PROPOSALS
20806 Federal Register / Vol. 72, No. 80 / Thursday April 26, 2007 / Proposed Rules 

§ 284.403 Code of conduct for persons 

holding blanket marketing certificates. 

(a) To the extent Seller engages in 

reporting of transactions to publishers of 

electricity or natural gas indices, Seller 

shall provide accurate and factual 

information, and not knowingly submit 

false or misleading information or omit 

material information to any such 

publisher, by reporting its transactions 

in a manner consistent with the 

procedures set forth in the Policy 

Statement on Natural Gas and Electric 

Price Indices, issued by the Commission 

in Docket No. PL03–3–000 and any 

clarifications thereto. Seller shall notify 

the Commission as part of its annual 

reporting requirement in § 260.401 of 

this chapter whether it reports its 

transactions to publishers of electricity 

and natural gas indices. Seller shall 

notify the Commission within 15 days 

of any subsequent change to its 

transaction reporting status. In addition, 

Seller shall adhere to such other 

standards and requirements for price 

reporting as the Commission may order. 

* * * * * 

Note: The following Appendix will not be 

published in the Code of Federal 

Regulations. 

Appendix A to Notice of Proposed 

Rulemaking—Transparency Provisions 

of Section 23 of the Natural Gas Act; 

Transparency Provisions of the Energy 

Policy Act of 2005, Docket Nos. RM07–

10–000 and AD06–11–000: Proposed 

FERC Form No. [X] 

Provide accurate and complete responses 

to the following questions. 

Purchases by 

number 

Purchases by 

volume 

(TBtu/Bcf) 

Sales by 

number 

Sales by 

volume 

(TBtu/Bcf) 

A. How much physical gas,* did you transact in the prior calendar year? 

B. Of the amount reported in Row A, what number and volume are transacted for next-day delivery? 

C. Of these next-day transactions, what number and volume are priced at a 

fixed price? 

D. Of these next-day transactions, what number and volume are priced at 

an index price? 

E. Of the amount reported in Row A, what number and volume are transacted for delivery in the next month? 

F. Of your transactions for delivery in the next month, what number and volume are priced at a fixed price during bid week? ** 

G. Of your transactions for delivery in the next month, what number and 

volume are priced at an index price? 

H. Of your transactions for delivery beyond next-day or month, what number and volume are priced using next-day or next-month index prices? 

* Notwithstanding its physical delivery provisions, for the purposes of this form, exclude NYMEX futures contracts or any other physically-settled futures contract unless the contract actually goes to delivery. 

** Bid week is defined as the last 5 working days prior to the delivery month. Please include those transactions in this row. 

[FR Doc. E7–7822 Filed 4–25–07; 8:45 am] 

BILLING CODE 6717–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 1051 

[EPA–HQ–OAR–2006–0858; FRL–8305–7] 

RIN 2060–A035 

Exhaust Emission Test Procedures for 

All-Terrain Vehicles 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Notice of proposed rulemaking. 

SUMMARY: In a rule published November 

8, 2002, EPA promulgated new emission 

standards for recreational vehicles 

beginning in model year 2006. This 

included a newly regulated class of 

nonroad vehicles/engines commonly 

referred to as all-terrain vehicles. In that 

rulemaking, a temporary provision was 

included allowing manufacturers to 

certify all-terrain vehicles over a steadystate, engine-based, duty cycle for 

exhaust emissions prior to the 2009 

model year in lieu of the transient, 

chassis-based, Federal Test Procedure 

which was effective for 2006 and later 

model years. In this rulemaking we are 

proposing to extend the availability of 

this temporary provision for in some 

cases up to an additional six model 

years, after which the chassis-based 

Federal Test Procedure would become 

the only available test cycle. More 

specifically, manufacturers would have 

to certify exhaust emission engine 

families representing not less than 50 

percent of their U.S.-directed 

production on the Federal Test 

Procedure in model year 2014 and 100 

percent in 2015. Manufacturers with 

only one all-terrain vehicle exhaust 

emission engine engine family would 

not be required to use the Federal Test 

Procedure until the 2015 model year. 

For those manufacturers who have not 

yet done so, this will allow additional 

time to certify to the previously 

promulgated Federal Test Procedurebased emission standards using either 

contract facilities or by obtaining inhouse capability. 

DATES: Written comments must be 

received by May 29, 2007. Request for 

a public hearing must be received by 

May 11, 2007. If we receive a request for 

a public hearing, we will publish 

information related to the timing and 

location of the hearing and the timing of 

a new deadline for public comments. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–HQ–

OAR–2006–0858, by one of the 

following methods: 

• www.regulations.gov: Follow the 

on-line instructions for submitting 

comments. 

• E-mail: a-and-r-docket@epa.gov. 

• Fax: (202) 566–1741. 


jlentini on PROD1PC65 with PROPOSALS