Federal Register / Vol. 63, No. 79 / Friday, April 24, 1998 / Notices 20391

facility, which is located at the north

end of the 176-mile segment.

Natural states that it has agreed to sell

the 176 miles of pipe to a non-affiliated

third party, Mid-Valley Products

Pipeline L.L.C., (Purchaser) for an armslength negotiated sales price. Natural

explains that the Purchaser will convert

the 176 miles of pipe to petroleum

products service and therefore,

following receipt of abandonment

authority, the ownership and operation

of the pipe will not be subject to the

NGA authority of the Commission.

Natural indicates that the compressor

units, for which abandonment authority

is sought, are not being sold to the third

party. Natural claims that these

compressor units are old and have not

been needed for Gulf Coast Mainline

operations for some time.

Natural further states that Natural’s

remaining 30-inch No. 2 line and 36-

inch No. 3 line, and the remaining

compression along the 176-mile

segment, will be fully adequate to serve

current demand in that discrete section

of its Gulf Coast Mainline.

Any person desiring to participate in

the hearing process or to make any

protest with reference to said

application should on or before May 11,

1998, file with the Federal Energy

Regulatory Commission, Washington,

D.C. 20426, a motion to intervene or a

protest in accordance with the

requirements of the Commission’s Rules

of Practice and Procedure (18 CFR

385.214 or 385.211) and the Regulations

under the Natural Gas Act (18 CFR

157.10). All protests filed with the

Commission will be considered by it in

determining the appropriate action to be

taken but will not serve to make the

protestants parties to the proceeding.

Any person wishing to become a party

to a proceeding or to participate as a

party in any hearing therein must file a

motion to intervene in accordance with

the Commission’s Rules.

Take further notice that, pursuant to

the authority contained in and subject to

jurisdiction conferred upon the Federal

Energy Regulatory Commission by

Sections 7 and 15 of the Natural Gas Act

and the Commission’s Rules of Practice

and Procedure, a hearing will be held

without further notice before the

Commission or its designee on this

application if no motion to intervene is

filed within the time required herein, if

the Commission on its own review of

the matter finds that a grant of the

authorization is required by the public

convenience and necessity. If a motion

for leave to intervene is timely filed, or

if the Commission on its own motion

believes that a formal hearing is

required, further notice of such hearing

will be duly given.

Under the procedure herein provided

for, unless otherwise advised, it will be

unnecessary for Natural to appear or be

represented at the hearing.

Linwood A. Watson, Jr.,

Acting Secretary.

[FR Doc. 98–10900 Filed 4–23–98; 8:45 am]

BILLING CODE 6717–01–M

DEPARTMENT OF ENERGY

Federal Energy Regulatory

Commission

[Docket No. CP98–349–000]

Transcontinental Gas Pipe Line

Corporation; Notice of Application

April 20, 1998.

Take notice that on April 14, 1998,

Transcontinental Gas Pipe Line

Corporation (Transco), 2800 Post Oak

Blvd., Houston, Texas 77056, filed in

Docket No. CP98–340–000, an

application pursuant to Section 7(b) of

the Natural Gas Act, for permission and

approval to abandon certain firm sales

service provided to Owens-Corning

Fiberglas Corporation (Owens-Corning)

and the City of Lexington (Lexington),

all as more fully set forth in the

application on file with the Commission

and open to public inspection.

Transco states that it entered into firm

sales agreements with Owens-Corning

and Lexington on August 1, 1991, under

which Transco sells gas to OwensCorning and Lexington under Transco’s

Rate Schedule FS. It is stated that one

agreement is with Owens-Corning with

a Daily Sales Entitlement of 3,000 Mcf

per day, and that two of the agreements

are with Lexington each with a daily

Sales Entitlement of 1,000 Mcf per day.

In accordance with Paragraph 1 of

Article IV of its FS Agreement, Transco

states that it delivers gas to OwensCorning and Lexington at various

upstream points of delivery. Transco

indicates that it acts as agent for OwensCorning and Lexington, for the purpose

of arranging for the transportation of gas

purchased from the points of delivery to

the points of redelivery identified in

both Owens-Corning and Lexington’s FS

Agreement with Transco.

Transco seeks authorization to

abandon the FS Agreements with Daily

Sales Entitlement of 3,000 Mcf daily to

Owens-Corning, and a total of 2,000 Mcf

daily to Lexington, effective March 31,

1999, pursuant to the election of OwensCorning and Lexington to terminate

their respective FS Agreements with

Transco.

Transco states that Paragraph 2 of

Article II of the FS Agreements that

Transco has with Owens-Corning and

Lexington provides that at the end of the

Primary Term, and on each anniversary

date thereafter, the term of the service

agreement will be extended by

successive one Contract Year periods,

unless either party notifies the other in

writing not less than two Contract Years

prior to the end of the Primary Term or

two Contract Years prior to any

anniversary date thereafter, of its

election not to extend the term of the

service agreement. Transco further

states that Paragraph 1 of Article II of

the FS Agreements define ‘‘Contract

Year’’ as the period from the effective

date (specified as November 1, 1990)

through March 31, 1991, and each

twelve month period thereafter for the

term of the agreement.

It is stated that the Primary Term of

the Owens-Corning Agreement ended

on March 31, 1996, and that the Primary

Term of the two Lexington FS

Agreements ended March 31, 1994 and

March 31, 1996, respectively. Transco

avers that the Primary Terms of the FS

Agreements were extended in

accordance with Paragraph 2 of Article

II of the FS Agreements. OwensCorning, by letter dated March 31, 1997,

and Lexington by letter also dated

March 31, 1997, provided Transco with

two-years notice to terminate their

respective FS Agreements as of March

31, 1999.

Any person desiring to be heard or to

make any protest with reference to said

application should on or before May 11,

1998, file with the Federal Energy

Regulatory Commission, Washington,

D.C. 20426, a motion to intervene or a

protest in accordance with the

requirements of the Commission’s Rules

of Practice and Procedure (18 CFR

385.214 or 385.211) and the Regulations

under the Natural Gas Act (18 CFR

157.10). All protests filed with the

Commission will be considered by it in

determining the appropriate action to be

taken but will not serve to make the

protestants parties to the proceeding.

Any person wishing to become a party

to a proceeding or to participate as a

party in any hearing therein must file a

motion to intervene in accordance with

the Commission’s Rules.

Take further notice that, pursuant to

the authority contained in and subject to

the jurisdiction conferred upon the

Federal Energy Regulatory Commission

by Sections 7 and 15 of the Natural Gas

Act and the Commission’s Rules of

Practice and Procedure, a hearing will

be held without further notice before the

Commission or its designee on this

application if no motion to intervene is
20392 Federal Register / Vol. 63, No. 79 / Friday, April 24, 1998 / Notices

1 Inquiry Concerning the Commission’s Merger

Policy Under the Federal Power Act: Policy

Statement, Order No. 592, FERC Stats. & Regs.

¶ 31,044 (1996), order on reconsideration, 78 FERC

¶ 61,321 (1997) (Policy Statement).

2Appendix to DOJ Merger NOI Comments at A–

11, n12.

3Wisconsin Electric Power Company, et al.

(Primergy), 79 FERC ¶ 61,158 at 61,694 (1997).

4Typically, the interconnected areas would be

control or planning areas, but the exact geographic

area would depend on how the model was

implemented.

filed within the time required herein, if

the Commission on its own review of

the matter finds that permission and

approval for the proposed abandonment

are required by the public convenience

and necessity. If a motion for leave to

intervene is timely filed, or if the

Commission on its own motion believes

that a formal hearing is required, further

notice of such hearing will be duly

given.

Under the procedure herein provided

for, unless otherwise advised, it will be

unnecessary for Transco to appear or be

represented at the hearing.

Linwood A. Watson, Jr.,

Acting Secretary.

[FR Doc. 98–10899 Filed 4–23–98; 8:45 am]

BILLING CODE 6717–01–M

DEPARTMENT OF ENERGY

Federal Energy Regulatory

Commission

[Docket No. PL98–6–000]

Inquiry Concerning the Commission’s

Policy on the Use of Computer Models

in Merger Analysis; Notice of Request

for Written Comments and Intent To

Convene a Technical Conference

The Federal Energy Regulatory

Commission (Commission) hereby

announces that it is requesting

comments on the use of computer

models in merger analysis and intends

to convene a public conference to

discuss this matter. The purpose of this

inquiry is to gain further input and

insight into whether and how computer

models should be used in the analysis

of mergers, including whether computer

models can be useful in a horizontal

screen analysis that follows the

Appendix A guidelines of the Merger

Policy Statement.1

We are issuing this request

concurrently with the Notice of

Proposed Rulemaking on Revised Filing

Requirements Under Part 33 of the

Commission’s Regulations (Docket No.

RM98–4–000). In that NOPR we identify

the use of computer models as an

emerging issue in the analysis of

mergers. We are issuing this notice

concurrently in order to inform the

Commission’s understanding of the

current and likely future role played by

computer models in merger analysis.

The attachment to this notice provides

a framework for discussion of models

and includes a sample model intended

to serve as a starting point for

discussion and comment.

I. Introduction

The use of computer models—

specifically, computer programs used to

simulate the electric power market—has

been raised in comments on the Policy

Statement and also in specific cases. In

comments on the Policy Statement, the

Department of Justice (DOJ)

recommended using computer

simulations to delineate markets. DOJ

also noted that these simulations could

be helpful in gauging the market power

of the merged firm.2

In Primergy, the applicants used a

computer simulation in their market

power analysis. We did not accept the

results of this computer simulation, in

part because we felt that the model was

not properly structured or tested.

However, it was not our intention to

inhibit the use of computer models. We

emphasized that ‘‘we do not wish to

discourage the development of

computer models for use in merger

analysis’’.3

The Commission continues to believe

that a properly structured computer

model could account for important

physical and economic effects in

analyses of mergers and may be a

valuable tool to use in horizontal screen

analyses. A computer model could be

particularly useful in identifying the

suppliers in the geographic market that

are capable of competing with the

merged company. A computer model

may also provide a framework to help

ensure consistency in the treatment of

those data in identifying suppliers in a

geographic market.

Two important ways in which a

computer model could improve the

accuracy of the delivered price test are:

(1) by explicitly representing economic

interactions between suppliers and

loads at various nodes in the

transmission network and (2) by

accounting for the transmission flows

that result from power transactions. We

discuss these and other matters in

greater detail in the Attachment.

Interactions between suppliers and

loads. In competitive markets for

electric energy, decisions about what

suppliers would serve what loads are

likely to be driven by short-run marginal

costs, including the opportunity cost to

suppliers of serving one load rather than

another. Because there can be many

possible combinations of supplies and

loads, some form of computer model

could be helpful in estimating such

combinations.

Transmission flows from exchanges of

power. Because of the properties of

electric power flows, exchanges of

power between control areas affect

flows throughout the transmission grid.

Any reasonable approximation of these

effects may require a computer model to

make the many calculations needed to

simulate the electric power flows.

Developing and using a computer

model involves a number of choices

about the structure of the model, the

level of detail reflected in the model, the

sources of information, and other issues.

These issues are discussed in the

Attachment. If these technical aspects of

model design and development can be

addressed adequately, a computer

program could be helpful in defining

geographic markets. One common

approach to market simulation,

discussed further as an example in the

Attachment, is to model the dispatch of

generation to meet loads in the

transmission network. The simulation

model in the example estimates market

outcomes that minimize the total cost of

generation and transmission. The

contribution of such a program to a

delivered price analysis is illustrated by

briefly describing the output

information that the model could

provide. Typical output from a program

could consist of the following:

• Generation levels. The computer

model would show the level of output

of each generator.

• Power traded. The model would

show the net quantity of power traded

between interconnected areas 4 under

economic dispatch.

• Flows on the transmission grid. The

model would show the quantity of

power flowing through each

transmission facility represented in the

model, constrained by any transmission

capacity limits that have been input to

the model. The effects of binding limits

would be reflected in model output of

generation levels and power prices.

• Prices for power. For each area, the

model would show the marginal cost of

power. This price can also be

interpreted as the market-clearing price

for the area.

II. Request for Written Comments

If a computer model were available to

produce the types of output described

above, we believe that its use could both

enhance and potentially expedite

delivered price analyses. However, the