-Recelved-CFTC 

Rec~rds Section ;o;~iloCJ 

In affiliation with 

The Allen Consulting Group, Australia 

------·-· ~---

Mr. David A. Starwick 

Secretary 

-Eeonom&-

rNcoRPORATED 

Washington DC • San Francisco Bay Area 

1200 New Hampshire A venue, NW 

Suite 400 

Washington, DC 20036-6082 

~---M_am_· (202) 223-4700Xl1X (202) 296~7138 

October 26, 2009 

Commodity Futures Trading Commission 

Three Lafayette Centre 

COMMENT 1155 21 51 Street, NW 

Washington, DC 20581 

John R. Morris 

Direct Dial: (202), 833-5208 

morris.j@ei.com 

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Re: Notices oflntent, Pursant to the Authority in Section 2(h)(7) of the Commodity Exchange Act and Com~ion: Rule 36.3(c)(3), To Undertake a Determination Whether 15 Financial Basis Contracts, Offered for Trading on the -i 

Intercontinential Exchange, Iric., Perform Significant Price Discovery Functions: 

AECO Financial Basis (AEC) Contract 

Chicago Financial Basis (DGD) Contract 

Dominion-South Financial Basis (DOM) Contract 

HSC Financial Basis (HSC) Contract 

Malin Financial Basis (MLN) Contract 

NGPL TXOK Financial Basis (NTO) Contract 

Northwest Rockies Financial Basis (NWR) Contract 

Permian Financial Basis (PER) Contract 

PG&E Citygate Financial Basis (PGE) Contract 

San Juan Financial Basis (SNJ) Contract 

Socal Border Financial Basis (SCL) Contract 

TCO Financial Basis (TCO) Contract 

TETCO-M3 Financial Basis (1MT) Contract 

Waha Financial Basis (WAH) Contract 

Zone 6-NY Financial Basis (TZS) Contract 

Dear Mr. Starwick, 

Enclosed are my commments concerning whether the contracts listed above meet the criteria for significant 

price discovery contracts. The comments discuss and provide data for all 15 contracts. 

Respectfully submitted, 

Is/ f~ !!Jf. u/tu!d 

Dr. John R. Morris 

Cc: Gregory Price 

Susan Nathan 
Comments to the Commodity Futures Trading Commission 

Concerning 

·------~------

October 9, 20, and22, 2009 Notices of Intent to Determine Whether 15 

Financial Basis Swap Contracts Related to Natural Gas Prices Offered for 

. ___ Trading on the Intercontinental Exchange,Jnc., Perform Significant Price 

Discovery Functions 

By 

Dr. John R. Morris 

Economists Incorporated 

October 26, 2009 

On October 9, 2009, the Commodity Futures Trading Commission 

("Commission") issued a notice of intent to determine whether 17 contracts 

offered for trading on the Intercontinental Exchange, Inc. ("ICE") perform 

significant price discovery functions. Four of the 17 contracts are electric power 

contracts and 13 of the 17 contracts are financial basis swap contracts based on 

natural gas prices. On October 20, 2009, the Commission issued a similar notice 

for the Socal Border financial basis contract, and on October 22, 2009, the 

Commission issued a notice for the Northwest Rockies financial basis contract. 

This comment concerns the 15 natural gas financial basis swap contracts. The 

Commission requests comments by October 26, 2009. 
I. Background, Summary, and Conclusion 

A. Background 

Comments of Dr. John R Morris 

Page2 

My name is John R. Morris, and I am a PrinciJ:?~t_at Econoll]i§1§___ ··----------

Incorporated, an economic consulting firm located at 1200 New~ Hampshire 

__ _ ___ _ _ _ _ _ ___ ~\l~ll_ll_~. ~W._ vv~_shjl}gtQ_I!._PC ~OO~§. __ LhCi\/~ __ a_ bachelor's degree in economics 

from Georgetown University, and I have a master's degree and a Ph.D. in 

economics from the University of Washington. I have been studying and 

consulting in the natural gas industry since joining the Federal Trade 

Commission in 1985. Since joining Economists Incorporated in 1992, I have 

consulted on many competition matters involving electric and gas companies, 

examined competitive issues relating to utility rates, examined issues concerning 

undue discrimination by operators of natural gas and electric power transmission 

facilities, provided market power studies for applications for market-rate authority, 

and studied market power issues in state restructuring proceedings. I have 

published articles on competition and energy matters and have spoken on 

numerous occasions concerning competition in natural gas, electric power, and 

other industries. I have previously has been accepted as an expert witness on 

energy matters before ttie Federal Energy Regulatory Commission, state 

commissions, and in federal court. I have taught economics at the University of 

Washington, Indiana University, and Stanford University (Washington Campus). 

A complete listing of my experience, publications, and testimony is contained in 

. the curriculum vitae presented as Attachment 1. 

My experience includes testimony and consulting concerning pricing issues 

in the natural gas industry and the relationships between the prices of financial 

instruments such as financial basis swaps and the price of physical gas, 

including evaluating allegations that El Paso Merchant Energy exercised market 

power in California in 2000 and 2001, that Energy Transfer Partners manipulated 
Comments of Dr. John R Morris 

Page 3 

physical natural gas prices at the Houston Ship Channel, and whether a 

combination of Exelon Corporation and Public Service Enterprise Group would 

allow them to manipulate natural gas prices in the Mid-Atlantic region. As part of 

my work I have spoken with natural gas traders and managers, reviewed -------------- ------------------------ -------------------------------

testimony by traders, examine price relationships among various natural gas 

prices and market fundamentals, reviewed industry information and literature, ---·-------------- --------------- -

and spoken with industry and academic experts. 

The views expressed in these comments are mine alone and do not 

necessarily reflect the views of Economists Incorporated or any clients. The 

comments are not being sponsored by past or current clients. 

B. Financial Basis Swaps 

The 15 natural gas contracts considered by the Commission are all financial 

basis swaps. Although the contracts are purely financial, they are not really part 

of the financial banking system as are credit default swaps. Instead, financial 

basis swaps are instruments that settle based upon the actual physical prices of 

natural gas. For example, the Chicago basis swap settles on the difference 

between the NYMEX futures contract settlement price at the Henry Hub in 

Louisiana and the Natural Gas Intelligence ("NGI") reported index for Chicago. 

Because the NYMEX futures contract requires physical delivery of gas and the 

NGI Chicago index is based upon actual physical trades of gas, the financial 

basis swap derives its value from actual physical trades of gas. Basis swaps are 

financial because their settlements are based upon index values and no physical 

delivery of gas is required to settle the contracts. 

All of the 15 natural gas basis swaps in the Notices are settled in part on 

the local published indices. .Chicago, Malin, PG&E Citygate, and Socal, are 

settled based on the NGI index and Dominion-South, HSC, NGPL TexOk, 
Comments of Dr. John R Morris 

Page4 

Northwest Rockies, Permian, San Juan, TCO, TETCO M-3, Transco Zone 6 NY, 

and Waha are settled based on Platts' Inside FERC ("IFERC") index. Both the 

NGI arid IFERC indices are based upon transactions conducted in the last five 

trading days of a month, known as "bidweek". The AECO index is published by 

Canadian Enerdata, Ltd.'s Canadian Gas Price Reporter ("CGPR"), which 

publishes the weighted average price of trades over t~e _!!'on~h prior. to the 

delivery month. Because all three publications report indices based on trades 

over multiple days, the indices do not represent prices on any one day but an 

average over several days. Hence, the basis swap prices have limited ability to 

predict prices on any given day of trading, especially during times of significant 

price volatility. 

C. Summary and Conclusions 

The 15 natural gas financial basis swap contracts proposed by the I 

Commission as Significant Price Discovery Contracts ("SPDCs") do not meet any 

previously articulated criteria for SPDCs. When the data are viewed properly, it 

becomes apparent that the contracts do not meet any indicia of material liquidity 

necessary for an SPDC. Moreover, each of the 15 financial basis swap contracts 

has a miniscule share of the total NYMEX trading volume, and 11 of the 15 

contracts have prices significantly different from the underlying contracts from 

which the basis swap contracts derive value. Finally, the financial basis swap 

contracts are not material price references. Other contracts are not indexed to 

the financial basis swap contracts and the market liquidity of the contracts is not 

robust enough to produce meaningful information on forward prices without a 

significant amount of additional information and editorial judgments. Given these 

facts, I recommend that the Commission determine that the 15 financial basis 

swap contracts are not SPDCs. 
Comments of Dr. John R Morris 

Page 5 

II. The CFTC Factors for Determining whether Contracts are 

Significant Price Discovery Contracts 

Section 2(h)(7) of the Commodity Exchange Act ("CEA") specifies four 

------------ ----faGtGI"sthat-the-G~TG-must-eonsider-when-Eiesignating-a-centraet-as-a--SPE>C--:-(-1-)-------­

Material Liquidity; (2) Price Linkage; (3) Arbitrage; and (4) Material Price 

Reference; I now consider-each ofthese factors-in relation to the 15-natu ral- gas 

basis swap contracts. 

A. Material Liquidity 

Sufficient material liquidity is required so that the trading of the target 

contract "is sufficient to have a material effect on other agreements, contracts or 

transactions listed for trading on or subject to the rules of a designated contract 

market, a derivatives transaction execution facility, or an electronic trading 

facility."1 Several concepts of liquidity are discussed in Appendix A to 17 CFR 

§36 ("Appendix A"). One concept is whether a steady enough stream of trades 

takes place to have a continuous stream of information on prices that is 

consistent with other prices in the marketplace. A second concept is whether 

someone can sell desired quantities at any time without a significant price 

concession. A third concept is whether the depth and breadth of the market for 

the target contract is sufficient to have an informational impact on other markets. 

This third concept is addressed in more detail in the discussions on price linkage, 

arbitrage, and material price reference. 

We can examine data from ICE to determine whether liquidity in the market 

exists in terms of trades and bids and offers to sell contracts. In liquid natural 

gas markets, transactions occur on a continuous basis with many trades 

1 Appendix A to 17 CFR §36 (2009). 
Comments of Dr. John R Morris 

Page 6 

occurring each day, as occurs with the NYMEX futures contract at the Henry 

Hub. 

The Notices specified data that allegedly indicate the potential for material ----- -----~--- ~-~~---- - -~~- ------ ----

liquidity. These data, however, have serious flaws and more careful inspection is 

likely to lead one to conclude that the contracts lack material ljquidity. The data 

presented in the Notices are summarized in Table 1. Although all the locations 

show more than--s-trades per day-on average~ this number is highly misleading 

because the average is over every month the contract is offered. Because the 

contracts can be offered for as long as 120 n:tonths, the average per day for an 

individual contract may be less than 1 per day. For example, the AECO contract 

is offered for delivery 120 months (1 0 years) into the future. Even though the 

AECO contract averages 113.5 trades per day, the average could be less than 1 

trade per day for any given delivery month. These contracts are also offered for 

strips of multiple months, further reducing the average per contract. 
-

Comments of Dr. John R Morris 

Page 7 

Table 1 -Summary Data from SPDC Notices 

Open 

Trades Contracts Interest 

---------- Hub Mo_n_thL ____ T_r_ades __ fJ.erDay_Contracts____j)_er_Day_Contracts _____________ _ 

AECO 120 7,263 113.5 806,438 12,601.0 443,402 

Chicago Citygates 

.. DominionSouthHSC 

Malin 

NGPL-TXOK 

Northwest Rockies 

Permian 

PG&E Citygate 

San Juan 

Socal Border 

TCO 

Tetco-M3 

Transco Z6-NY 

Wah a 

72 

-- 72-

84 

72 

72 

30 

72 

72 

72 

120 

72 

72 

72 

72 

1,572 24.6 

347 5.4 

2,524 39.4 

664 10.4 

1,083 16.9 

3,013 47.1 

727 11.4 

1,142 17.8 

391 6.1 

8,102 126.6 

583 9.1 

1,073 16.8 

522 8.6 

1,165 18.2 

146,193 2,284.3 127,744 

--38,872 607.4 97;240 

209,010 3,265.8 313,594 

59,564 930.7 65,804 

84,432 1,319.3 70,557 

276,187 4,315.4 349,931 

49,200 768.8 55,940 

99,418 1,553.4 150,299 

30,722 480.0 49,105 

612,452 9,569.0 417,121 

61,944 967.9 141,544 

145,328 2,270.8 168,963 

55,371 865.2 87,520 

100,490 1,570.2 96,371 

Another feature of the data is that the number of contracts per trade ranges 

from 67 to 135. This level of contracts per trade is many times the level that I 

have observed in trade data available from ICE. One reason is that the contract 

data used by the Commission includes bilateral over-the-counter ("OTC") 

contracts that are traded bilaterally or through brokers and then cleared through 

ICE for processing. These contracts do not represent trades on the ICE 

electronic trading platform, but other trades with prices confidential to the 

transacting parties. These contracts do not serve a price discovery function 

because their prices are not shown on ICE's real-time platform or daily reports 

l 

and are not generally made available to the public. It is also possible that the 

Commission has misinterpreted the data supplied by ICE. 

To address these issues, I have examined actual transactions data from the 

ICE electronic trading platform. Data from the second quarter of 2009 could not 

---------- --- -- ·------ ---·-
~----- -~---- ·-- ---·- ------ ------·-··-~------~-·---------~ -- ,-,---~~----~~------

Comments of Dr. John R Morris 

Page 8 

be obtained and processed in the short period allowed for comments. 

Accordingly, I have used the most recent data that I had available, which runs 

from trades on September 1, 2008 through November 30, 2008. Although these 

data are from an earlier period, they are close enough in time to illustrate the ------~--~---··. -----------·-·------------------- . --------~-------·---­

actual trading activity on ICE for the 15 contracts. 

----

For each of the 15 contracts, Table 2 shows the average number of trades 

per day, the total number of contract-equivalents per trade, and the average 

number of trades per day for the December 2008 contracts. 2 Table 2 shows that 

the number of transactions in the December 2008 contracts, the most commonly 

traded contract of the available delivery terms, were significantly less than the 

average number of total trades, as expected. On average, the December 2008 

contracts accounted for less than one out of three trades. Only AECO and Socal 

averaged more than 20 trades per day for the last 90 days of trading a contract. 

Moreover, the number of contracts per trade averages less than 3. This 

compares to over 67 contracts per trade in the Notices. This difference (3 is 

actual trade data versus 67 in the Notices) suggests that the Commission's data 

are unrelated to the actual trading activity on the ICE electronic trading platform. 

2 The number of contract-equivalents is equal to the total mmBtu/d volume transacted divided 

by the 2,500 mmBtu/d standard contract size. 
Comments of Dr. John R Morris 

Page 9 

Table 2 - Summary of Actual ICE Trading Data, September 1, 2008 through 

November 30, 2008 

Average Number of 

----- ----~ -·--------------------Average-Number-ot- ---Numbe-r-of----~rradeSPer-oay ror·---------·---------

Hub Trades Per Day Contracts Per Trade Dec. 2008 Strip 

AECO 99.5 2.9 25.3 

--Chicago Gitygates ... -- - -- -1-2:-3 2.3 . 2:9 

Dominion South 6.2 3.0 3.0 

HSC 50.6 2.8 . 10:1 

Malin 7.4 2.3 2.3 

NGPL-TXOK 7.9 2.6 2.9 

Northwest Rockies 41.8 2.0 7.5 

Permian 18.6 1.9 5.2 

PG&E Citygate 15.0 2.3 3.9 

San Juan 7.0 1.8 1.6 

Socal 100.8 2.1 28.6 

TCO 3.7 2.5 1.5 

Tetco-M3 13.8 2.7 6.2 

Transco Z6-NY 8.6 2.0 6.3 

Waha 20.5 2.1 7.1 

Table 3 provides additional data on liquidity. It provides a percentage 

distribution of the number of trades per day in the last 90 days of trading for the 

prompt-months of October, November, and December 2008. For the most liquid 

trading point, Socal, it shows that on 3.1 percent of days no contacts were 

traded. Moreover, only 42.7 percent of days at Socal have more than 30 trades 

per day, less than one-half the number of trades necessary to .have a minimum 

level of liquidity. 

Necessary liquidity must be viewed in relationship to the volatility in the 

market under consideration. NYMEX future prices can easily change value by 1 

percent within a minute, and by 10 percent within a day. Daily natural gas prices 

can change by over 20 percent from one ·day to the next. Given this volatility, it 

would seem that trades would need to occur on average at least every five 

minutes to give any buyer or seller a reasonable expectation that he could make 
Comments of Dr. John R Morris 

Page 10 

trades when desired without a price concession. Trades every five minutes 

would be twelve trades per hour, or 72 trades over a six-hour trading session. 

Without at least an average of 72 trades per day for each monthly contract within 

90 days of the beginning of the delivery month (or strip), material liquidity ·--------------------- ~---- ----- -~----·---··----·-----­

appears unlikely to exist in natural gas markets. 

Table 3 - Percentage Distribution of the Number of Trades per Day in the 

_Last 90 Days of TradingJor ~romptMonths October, November, and 

December 2008 

1-5 6-10 11-20 21-30 More than 

Hub 0 Trades Trades Trades Trades Trades 30 Trades 

AECO 1.5 5.6 11.3 26.2 24.1 31.3 

Chicago Citygates 31.9 52.9 9.9 3.1 1.0 1.0 

Dominion South 47.6 38.2 10.5 3.1 0.5 0.0 

HSC 9.4 26.2 20.9 16.8 15.2 11.5 

Malin 36.6 49.7 9.9 3.1 0.5 0.0 

NGPL-TXOK 44.0 38.2 11.0 5.8 1.0 0.0 

Northwest Rockies 7.9 34.6 24.1 14.7 10.5 8.4 

Permian 17.8 41.9 14.7 19.4 3.1 3.1 

PG&E Citygate 29.8 41.9 15.7 10.5 2.1 0.0 

San Juan 50.3 33.0 11.0 4.7 1.0 0.0 

Socal 3.1 7.3 12.0 19.3 15.6 42.7 

TCO 58.1 29.8 9.4 2.1 0.0 0.5 

Tetco-M3 37.2 42.4 8.9 7.3 3.1 1.0 

Transco Z6-NY 43.5 41.4 6.8 6.3 1.6 0.5 

Waha 20.9 36.1 18.3 12.0 7.9 4.7 

Only four locations, AECO, HSC, Northwest Rockies, and Socal had more 

than 5 trades on 50 percent of days or more. At two of these locations, HSC and 

Northwest Rockies, over 50 percent of days had 10 or fewer trades. In total, only 

AECO and Socal had more than 12 percent of days with 30 or more trades. In 

other words, 13 of 15 locations did not have even one-half of the necessary 

trading volume to demonstrate sufficient liquidity on over 85 percent of days. 

Finally, in liquid markets buyers and sellers continuously seek to buy and 

sell the product. Although actual transactions may not occur every minute, at 
Comments of Dr. John R Morris 

Page 11 

least bids and offers are continuously available. In my experience in reviewing 

bids and offers for basis swaps on ICE, it is common that there will be no offers 

to sell and no bids to purchase specific basis swaps. This provides a further 

indication of a lack of material liquidity for basis swaps on the ICE electronic ----·--------·-·-----~ 

trading platform. 

B. Price Linkage 

On a very superficial level, basis swaps are linked to the NYMEX gas 

futures contact and the bidweek prices at the basis location. But, as the 

Commission has stated: 

For a linked contract, the mere fact that a contract is linked to another 

contract will not be sufficient to support a determination that a contract 

performs a significant price discovery function. To assess whether 

such a determination is warranted, the Commission will examine the 

relationship between transaction prices of the linked contract and the 

prices of the referenced contract(s). The Commission believes that 

where material liquidity exists, prices for the linked contract would be 

observed to be substantially the same as or move substantially in 

conjunction with the prices of the referenced contract(s). 3 

The Commission articulated two criteria that it would consider. First, it 

would consider whether the volume of the target contract is 5 percent or greater 

of the volume of the contract to which it is linked.4 Second, it will consider 

whether the target contract price is within 2.5 percent of the linked contract 

price(s) more than 95 percent of the time. 5 If two contracts are truly linked, then 

the prices should be very close (within 2.5 percent) virtually all the time. 

Accordingly, I have examined these two conditions. 

3 Appendix A, at (8)2. 

4 Appendix A, at (8)3. 

5 Appendix A, at (8)4. 
Comments of Dr. John R Morris 

Page 12 

Table 4 shows the volume of trades on ICE as a percentage of the volume 

of trading for the NYMEX contract. None of the locations even reached 0.1 

percent of the volume on NYMEX in any of the three months. These shares are 

substantially below the 5 percent threshold established by the Commission. ----------~-------~~ ~-~~- ---~------- ------------~-------

These shares are so small that it is clear that trading in financial basis swaps 

cannot influence trading for the NYMEX futures contract. - --------------- ---------·----------- - ---- - - - -- --· 

- ----Table 4 _...;Basis Swap Volume Compared to NYMEX Volume, Last 90 Days 

of Trading for October, November, and December 2008 Prompt-months 

Hub Oct-08 Nov-08 Dec-08 Overall 

AECO 0.07 0.09 0.09 0.08 

Chicago Citygates 0.01 0.01 0.01 0.01 

Dominion South 0.01 0.01 0.01 0.01 

HSC 0.06 0.05 0.03 0.05 

Malin 0.01 0.01 0.01 0.01 

NGPL-TXOK 0.01 0.01 0.01 0.01 

Northwest Rockies 0.03 0.03 0.02 0.03 

Permian 0.02 0.02 0.01 0.02 

PG&E Citygate 0.01 0.02 0.01 0.01 

San Juan 0.00 0.01 0.00 0.01 

Socal 0.07 0.10 0.07 0.08 

TCO 0.01 0.00 0.00 0.01 

Tetco-M3 0.01 0.02 0.02 0.01 

Transco Z6-NY 0.00 0.00 0.01 0.01 

Waha 0.02 0.02 0.02 0.02 

Table 5 shows the percentage of basis swap trades that have values within 

2.5 percent of the value of the actual trades during bidweek at each of the 15 

locations.6 The values were calculated by taking a financial basis trade and 

subtracting the actual basis at settlement. This difference was then divided by 

6 At the AECO location, the results were based upon the IFERC Index as opposed to the CGPR 

index. This gives a higher percentage because the IFERC Index is based upon bidweek 

trades whereas the CGPR is based upon trades over a month. 
Comments of Dr. John R Morris 

Page 13 

the local settlement price to obtain the percentage difference.7 Trades were 

limited to bidweek trades because the local settlement price is based upon trades 

only in bidweek. Table 5 then gives the percentage of financial basis trades with 

implied prices within 2.5 percent of the local settlement price for each year from 

----~ --2oo4 through 2008 ~nd th~- five-y~-~r average. 8 -

Table 5 - Share of Financial Basis Swap Trades Within 2.5 Percent of Final 

Settlement Price, 2004 through 2008 

Hub 2004 2005 2006 2007 2008 5-:tear 

AECO* 15 17 29 36 29 

Chicago Citygates 57 64 79 60 73 67 

Dominion South 100 100 100 100 100 100 

HSC 89 44 62 73 83 76 

Malin 0 25 30 58 67 51 

NGPL-TXOK 87 42 90 73 78 77 

Northwest Rockies 40 20 32 39 38 37 

Permian 26 7 49 61 47 50 

PG&E Citygate 38 33 31 76 64 56 

San Juan 28 59 30 62 29 41 

Socal 36 47 42 56 60 53 

TCO 100 100 100 100 100 100 

Tetco-M3 61 100 100 100 100 99 

Transco Z6-NY 65 99 100 95 100 96 

Waha 31 52 54 56 41 48 

*Compared with IFERC Index and not the CGPR index 

The results reveal that only 4 of the 15 locations have more than 95 percent 

of financial basis trades with implied prices within 2.5 percent of the local 

settlement price: Dominion South, TCO, Tetco-M3, and Transco Z6-NY. It 

should be noted that all four of these locations have IFERC indices comprised 

mainly of physical basis trades, which are indexed to NYMEX, as are financial 

basis contracts. Hence, at these locations we would expect the financial basis 

7 Hence, the percentage difference was give by (Basis Price - (Local Settlement- NYMEX 

Settlement))/Local Settlement. The results in Table 5 would not be materially different if the 

NYMEX settlement price was the divisor instead of the local settlement price. 

8 The years are based upon the delivery month for the natural gas. 

----------
Comments of Dr. John R Morris 

Page 14 

contracts to be consistent with the IFERC indices. In other words, the financial 

basis trades provide little or no additional information beyond the actual prices of 

the physical basis trades for physical gas. At all of the locations where fixedpriced trades predominate the local price indices, the implied prices from -------

financial basis trades are within 2.5 percent of the local settlement prices less 

than 95 percent of !~_e Yl'l'IC:_· __ Thi_~ indicates th~J>ric_~s__o!_!i_rl_a':l_C:LC1Lb<!~is_ S\JI/C!fJ~ 

are not sufficiently linked to the prices of the underlying physical transactions in 

the NYMEX futures-ma-rket and the local physical natural gas markets to meet 

the Commission's articulated standard for price linkage. 

C. Arbitrage 

The Commission also inquires whether the contracts can be used to 

arbitrage a designated contract market or other market under regulation by the 

Commission. The empirical factors for evaluating arbitrage possibilities are the 

sa~J1e ones used for price linkage.9 The reasoning is that without price linkage, 

the ability to arbitrage will be limited. In addition to price linkage, it is also 

necessary to have material liquidity. Arbitrage can occur when traders notice 

price discrepancies and can execute trades to lock in a profit with little or no risk. 

If a trader must wait to trade or must offer a significant price concession to trade 

quickly, then arbitrage will be limited because the trader would take the risk that 

market conditions could change or the price concession could evaporate the 

potential gains from arbitrage. In other words, without material liquidity and the 

ability to trade quickly, traders may speculate, but they will not be able to 

arbitrage. For the reasons discussed above, it appears that the basis swaps do 

not meet Commission standards for material liquidity and price linkage. Hence, 

the ability to arbitrage using basis swaps is limited. 

9 Appendix A, at (C)3. 
D. Material Price Reference 

Comments of Dr. John R Morris 

Page 15 

The Commission examines both direct and indirect evidence for material 

price reference.10 Direct evidence is whether other contracts directly reference 

----~-----the-prices-in-the-t-arget-contracts:-tndirect-evidence-occurs·from-sources-such-a-s- ----------------

whether the ECM distributes or sells the price data from its exchanges or other 

- -evidence-that- market-participants-rely ·on-the target prices in their pricing 

decisions for regulated contracts. As discussed below, the 15 financial basis 

swaps do not appear to meet the standards for material price reference. 

I am unaware of any direct evidence of material price reference. Rather 

than being contracts to which others are referenced, financial basis swaps 

reference other contracts and indices. Rather than referencing the prices of 

financial basis swaps, other contracts routinely reference the underlying 

contracts and indices: the NYMEX futures settlement and the local indices 

reported by NGI, IFERC, and CGPR. Hence, there is simply no need to 

reference the prices of financial basis swaps. 

Nor am I aware of indirect evidence. Physical natural gas contracts have 

indices reported daily, weekly, and monthly. In the case of monthly contracts, 

IFERC also reports volumes and average prices of physical basis trades. But 

prices of financial basis swaps are not reported in the same manner. 

Platts publishes prompt-month basis and forward curves based, in part, on 

ICE basis trades. But the methodology described by Platt's clearly shows that 

these published data incorporate substantial amounts of other information and 

editorial judgment because of the lack of material liquidity in the financial basis 

swap market. Platts states: 

10 Appendix A, at (0)1. 
Comments of Dr. John R Morris 

Page 16 

Methodology ·systems used to assess forward markets remain the 

preserve of Platts editorial. ICE provides some of the data considered 

by Platts editorial experts who formulate forward assessments for the 

gas and electricity markets. ICE transactions play a valuable but not 

dominant role in editors' analysis of price term structure and outright 

___________________ valuations_of_the_daily_forward_ market_and_thusthe .. determinatioll-of~-·-­

market-on-Ciose assessments. 11 

-- ----- --- --In--addition to--the--ICE electronic trading data, Platts seeks information from theback-office operations of companies and interviews brokers and traders. Platts 

also reviews historical and spatial price relationships as part of its editorial 

process. So, although the pricing data from ICE on financial basis swaps are 

"valuable", they do not play a "dominant role" is formulating the prices published 

by Platts. 

Although the data from the financial basis swaps are available from ICE in a 

number of different packages as indicated in the Notices, it should be noted that 

these packages include data for all the products in a region (or all regions) 

including NYMEX look-a-like contracts, fixed-priced physical daily contracts, 

indexed physical daily contracts, fixed-priced physical monthly contracts, index 

physical monthly contracts, and physical-basis monthly contracts. Given the 

electronic world in which it is often lower-cost to include data rather than to 

exclude specific data, the fact that financial basis swaps are included as part of 

these data packages provides little to no probative value on material price 

reference for any particular product, including financial basis swaps. Indeed, the 

data packages include products (for example, local fixed-for-float swaps) that 

clearly would not meet any material liquidity criteria, and the presence of any 

particular product provides little to no information that the data for that product 

are providing material price references. 

11 Platts, Methodology and Specification Guide: Platts-ICE FoiWard Curve- Natural Gas (North 

America), October 2008, at 3. 
---------------- ---------0VERVIEW--

EDUCATION 

PRESENT POSITION 

PREVIOUS 

EXPERIENCE 

MEMBERSHIPS 

EXPERIENCE AND QUALIFICATIONS OF 

Dr. John R. Morris 

Attachment I 

Page I of7 

--------- -DcMorris;-aTecognized<:xpertinsrudying competition m energy 

industries, currently is a Principal at Economists Incorporated. 

He began his research of competition in energy industries in 1985 

while worl<_ing for_the FederaiTr!lcle_CQmm_iss.iQn. __ Sin<:<ejoining _ 

Economists Incorporated in 1992, he has consulted on many 

mergers and acquisitions involving energy companies, examined 

competitive issues relating to rates, and studied issues in state 

restructuring proceedings. He has published articles on 

competition and energy matters, and he has spoken on numerous 

occasions concerning competition in natural gas, electric power 

and other industries. He has been accepted as an expert witness 

on energy matters before the Federal Energy Regulatory 

Commission, state regulatory commissions, and in federal court. 

Ph.D., University of Washington, August 1985 Dissertation: 

Intellectual Property: Creating, Pricing, Copying M.A., 

University of Washington, December 1983 • A.B., Georgetown 

University, May 1981 

Dr. Morris is a Principal at Economists Incorporated, an 

economic consulting firm located at 1200 New Hampshire 

Avenue, NW, Suite 400, Washington, DC 20036. (202-223-

4700) Economists Incorporated studies competitiOn and 

regulation in many industries in the United States and in other 

countries. It is a leading firm in studying the competitive effects 

ofmergers and acquisitions. 

Senior Vice President, Economists Incorporated, December 2001 

- December 2002 • Vice President, Economists Incorporated, 

December 1995 - December 200 I • Senior Economist, 

Economists Incorporated, June 1992 - December 1995 • 

Economic Tutorial Leader, Stanford University (Stanford in 

Washington), April 1993 - June 1995 • Visiting Assistant 

Professor, Department of Business Economics and Public Policy, 

School of Business, Indiana University, September 1991 - May 

1992 • Assistant to the Director for Antitrust, Bureau of 

Economics, Federal Trade Commission, November 1989 -

August 1991 • Economic Advisor, Office of Commissioner 

Machol, Federal Trade Commission, December 1988 - October 

1989 • Economist, Division of Antitrust, Bureau of Economics, 

Federal Trade Commission, October 1985 -December 1988 

Member, International Association of Energy Economics • 

Associate, Energy Bar Association • Member, American Economic 

Association Member, Western Economic Association 

International • Associate, American Bar Association 
Qualifications of Dr. Morris 

AWARDS & HONORS 

Attachment I 

Page 2 of7 

Award for Excellence in Law Eriforcement, Federal Trade 

Commission, 1988 • Graduate School Scholarship, University of 

Washington, 1984 • Graduated Cum Laude Georgetown 

University, 1981 • Senior Comprehensive Passed with Distinction, 

Georgetown University, 1981 

----- -----~----- -~---- ----TESTIMONYBEFO~ - --------Pn:pareaAnsweiing Testimony, People ofthe State of California, -~----------

THE FEDERAL ex ref; Bill Lockyer, Attorney General of the State of California 

ENERGY v. Powerex Corp., et a/., EL02-71-000 (2009) • Affidavit, 

REGULATORY ________ Jntegcys--Energy--Services,- Inc.- -V. -New- Brunswick---PowerCOl\tiMISSION Generation Corporation, EL09-32-002 (2009) • Affidavit, People 

of the State of California, ex rei; Edmund G. Brown Jr. Attorney 

General of the State of California v. Powerex Corp., et a/., EL09-

56-000 (2009) • Affidavit, San Diego Gas & Electric Company v. 

Sellers of Energy and Ancillary Services, EL00-95-000 (2009) • 

Affidavit, Troy Energy, LLC, et a/., ER02-25-0IO (2009) • 

Affidavit, Combined Locks Energy Center, LLC, et a!., EROI2659-015 (2009) • Prepared Direct Testimony and Deposition, 

Energy Transfer Partners, et a/., IN06-3-003 (2009) • Prepared 

Direct Testimony and Hearing, Mobil Pipe Line Company, 

OR07-21-000 (2009) • Idaho Power Company, ER06-787-002 

(2009) • Affidavit, Southern Indiana Gas and Electric Co. d/b/a 

Vectren Energy Delivery oflndiana, Inc. ER96-2734-007 (2008) 

• Affidavit, Choctaw Gas Generation, LLC, eta/. ER08-1332-002 

• Affidavit, TransCanada Energy Sales Ltd., ER09-328-001 

(2008) • Prepared Direct Testimony and Deposition, Oasis 

Pipeline L.P., et al., IN06-3-004 (2008) • Affidavit, Tampa 

Electric Company, ER99-2342-012 • Affidavit, ANP Bellingham 

Energy Company, LLC, et al., ER00-2117-005 (2008) • 

Affidavit, SUEZ Energy Marketing, NA, et al., ER06-169-003 

(2008) • Affidavit, TransCanada Energy Marketing ULC, et al., 

ER07-1274-00I (2008) • Affidavit, Georgia-Pacific Brewton 

LLC, et a!., ER08-1126-000 (2008) • Affidavit, Montgomery 

L'Energia Power Partners LP, ER08-864-000 (2008) • Affidavit 

(with Joseph P. Kalt), Energy Transfer Partners, et al., IN06-3-

002 (2008) • Affidavit, Energy Transfer Partners, eta!., IN06-3-

002 (2008) • Affidavit, TransCanada Maine Wind Development 

Inc., ER08-685-000 (2008) • Affidavit (with Joseph P. Kalt), 

Energy Transfer Partners, et al., IN06-3-000 (2007) • Affidavit, 

Energy Transfer Partners, et al., IN06-3-000 (2007) • Affidavit, 

The People of the State of Illinois, ex ref. Illinois Attorney 

General Lisa Madigan v. Exelon Generation Co., LLC, et al., 

EL07-47-000 (2007) • Affidavit, Baltimore Gas and Electric 

Company, ER07-576-000 (2007) • Affidavit, Trans-Allegheny 

Interstate Line Company, ER07-562-000 (2007) • Affidavit, 

TransCanada Energy Marketing Ltd., et al., ER07-331-000 

(2006) • Affidavit, Tampa Electric Company, ER99-2342-000, 

ER07-173-000 (2006) • Affidavit, Koch Supply & Trading, LP, 

ER07-100-000 (2006) • WPS Resources Corporation and Peoples 

Energy Corporation, EC06-152-000 (2006) • Affidavit, Sabine 

Cogen, LP, ER06-744-000 (2006) • Affidavit, Air Liquide Large 

Industries U.S. LP, ER06-743-000 (2006) • Affidavit, ANP 

Bellingham Energy Company, LLC., et a!., ER00-2117-000 
Qualifications of Dr. Morris Attachment I 

Page 3 of7 

(2005) • Affidavit, Duke Energy Corporation and Cinergy Corp., 

EC05-103-000 (2005) • Affidavit, El Paso Marketing, L.P., et 

a/., ER95-428-000 (2005) • Affidavit, TransCanada Energy Ltd., 

et al., ER95-692-000 (2005) • Affidavit, Granite Ridge Energy, 

LLC, ER00-1147-000, ER05-287-001 (2005) • Affidavit, 

TransCanada Power (Castleton) LLC, ER05-743-000 (2005) • ------Affioavit, Tampa Electric Company, e{ al., ER99-2342-003 ______________ _ 

(2005) • Affidavit, Wisconsin Public Service Corporation, WPS 

-Energy Services, Inc., and WPS Power Development, Inc., ER96-

- __ _ ____ __ _ __ ----1088-035-and-Wisconsin Rublic Service-Corporation, ER95-

TESTIMONY BEFORE 

STATE REGULATORY 

COMMISSIONS 

1528-010 (2005) • Affidavit, Wisconsin River Power Company, 

ER05-453-000 (2005) • Affidavit, Upper Peninsula Power 

Company~:tR05-89-00I (2005} • Affidavit; Southern Indiana Gas 

and Electric Company, ER96-2734-003 (2004) • Affidavit, 

Tampa Electric Company, et al., ER99-2342-003 (2004) • 

Affidavits, TransCanada Hydro Northeast, Inc., et al., EC05-12-

000, ER05-lll-OOO (2004) • Affidavits, Dominion Energy New 

England, Inc., et al., EC05-4-000, ER05-34-000 (2004) • 

Affidavit, Wisconsin Public Service Corporation, WPS Energy 

Services, Inc., and WPS Power Development, Inc., ER96-l 088-

033 and Wisconsin Public Service Corporation, ER95-1528-008 

(2004) • Affidavit, NorthPoint Energy Solutions Inc. ER04-1244-

000 (2004) • Affidavit, Union Power Partners, L.P., EROI-930-

004 (2004) • Affidavit, Panda Gila River, L.P., EROI-931-004 

(2004) • Affidavit, Dominion Energy Kewaunee, Inc., ER04-318-

000 (2003) • Affidavit, TPS GP, Inc., TPG LP, Inc., Panda GS V, 

LLC & Panda GS VI, LLC, EC03-90-000 (2003) • Affidavit, 

Berkshire Power Company, L.L.C. et al., ER99-3502-00I (2002) 

• Affidavit, El Paso Merchant Energy, L.P., ER95-428-024 

(2002) • Affidavit, Tampa Electric Company, ER99-2342-001 

(2002) • Affidavit, Hardee Power Partners Limited, ER99-2341-

001 (2002) • Affidavit, TECO-PANDA Generating Company, 

L.P ., ER02-1 000-000 (2002) • Affidavit, Commonwealth 

Chesapeake Company, LLC, ER99-415-004 (2002) • Affidavit, 

Wisconsin Public Service Corporation, WPS Energy Services, 

Inc., and WPS Power Development, Inc., ER96-1 088-031 and 

Wisconsin Public Service Corporation, ER95-1528-006 (2001) • 

Affidavit, TPS McAdams, LLC and TPS Dell, LLC, ER02-507-

000 and ER02-510-000 (2001) • Affidavits, Prepared Direct 

Testimony, and Hearing, CPUC v. El Paso Natural Gas 

Company, et al., RP00-241-000 (2000-2001), Affidavit, El Paso 

Energy Corporation and The Coastal Corporation, EC00-73-000, 

(2000) • Affidavit, El Paso Energy Corporation and Sonat Inc., 

EC99-73-000 (1999) • Prepared Testimony, San Diego Gas & 

Electric Company and En ova Energy, Inc., EC97 -12-000 (1997) • 

Prepared Testimony and Hearing, Wisconsin Electric Power Co., 

Northern States Power Co. (Minnesota), Northern States Power 

Co. (Wisconsin), and Cenerprise, Inc., EC95-16-000 (1996) 

Prepared Direct Testimony, Application of Wisconsin Power and 

Light Company for Issuance of a Certificate of Public 

Convenience and Necessity for Construction and Placement in 

Operation of an Approximately 300 MW Coal-Fired Baseload 

Qualifications of Dr. Morris 

lESTIMONY BEFORE 

STAlE COURTS 

OTIIER 1ESTIMONY 

PUBLICATIONS 

WORKING PAPERS 

PRESENTATIONS & 

PROFESSIONAL 

ACTIVITIES 

Attachment 1 

PageS of7 

Affidavit, City Public Service Board of San Antonio vs. Public 

Utility Commission of Texas, et al., No. 97-02917, District Court 

ofTravis County, Texas, 200th Judicial District (1997) 

Report, Metromedia Energy, Inc. v. Mirant Americas Energy 

Marketing, RE: 18 198 Y 18484 03 (2005) • ReQQrt and 

Deposition, King ]?rovision--Corporation v._ Burger King 

Corporation and Grand Metropolitan PLC, 90-05718-CA, 4th 

Cir., Duval Co., Florida (1992) • Deposition, West Texas 

Transmission-L.P. v. Enron -Corp. et al., SA88-CA-0638,-W~D,- -- ------- -·· --·- ---

Texas, San Antonio Division (1988) 

"The Likely Effect of the Proposed Exelon-PSEG Merger on 

Wholesale Electricity Prices," Electricity Journal21 (1) (Jan./Feb. 

2008): 45-54 • "FERC MBR Screens: The Good, the Bad, and the 

Ugly," Public Utilities Fortnightly 143(7) (July 2005): 37-42 • 

"Finding Market Power in Power Markets," International 

Journal ofthe Economics of Business, 7(2) (July 2000): 167-178 

• "Why Applicants Should Use Computer Simulation Models to 

Comply with the FERC's New Merger Policy," with Mark 

Frankena, Public Utilities Fortnightly, 135(3) (February I, 1997): 

22-26 • Electric Utility Mergers, with Mark Frankena and Bruce 

Owen, Chapters 1, 4, & 5, _1994 • "International Trade and 

Antitrust: Comments," University of Cincinnati Law Review, 

61(3) (1993): 945-953 • "Upstream Vertical Integration with 

Automatic Price Adjustments," Journal of Regulatory Economics 

4 (1992): 279-287 • "Should the U.S. Department of Justice 

deviate from the 5% price test for market definition on a case-bycase basis?" with Gale Mosteller, International Merger Law, 

April 1992 • "Defining Markets for Merger Analysis," with Gale 

Mosteller, Antitrust Bulletin 36 (Fall 1991 ): 599-640 • 

"Analyzing Agreements Among Competitors: What Does the 

Future Hold?" with Jim Langenfeld, Antitrust Bulletin 36 (Fall 

1991): 651-679 • "In Defense of Antitrust," witH Jim 

Langenfeld, Regulation 14(2) (Spring 1991): (Letters) 2-4 • 

"Enforcement of Property Rights and the Provision of Public 

Good Attributes," Information Economics and Policy 3 (1988): 

91-108 

"Advertising Restrictions as Rent Increasing Costs," FTC Bureau 

of Economics Working Paper No. 196, May 1992 • "Rent 

Increasing Costs: The Antitrust Implications from a Paradox in 

Value Theory," FTC Bureau of Economics Working Paper No. 

182, November 1990 • "The Relationship BetWeen Industrial 

Sales Prices and Concentration of Natural Gas Pipelines," FTC 

Bureau of Economics Working Paper No. 168, November 1988 • 

"Deregulation by Vertical Integration?" FTC Bureau of 

Economics Working Paper No. 166, November 1988 

"Efficacy of Vertical Integration in Energy Industries with 

Applications to Proposed Standards of Conduct for Transmission 

Providers," submitted to FERC by Santee Cooper in Docket No. 

RM07-l-OOO (2007) • Chair, Antitrust Committee, Energy Bar 
Qualifications ofDr. Morris Attachment 1 · 

Page 6 of7 

Association, 2004--2005 • "Competition in the Natural Gas 

Industry: An Antitrust Perspective, presentation to staff of the 

Federal Energy Regulatory Commission," March 28, 2005 • Vice 

Chair, Antitrust Committee, Energy Bar Association, 2003-2004 

• "Weston 4 Effec( on Wholesale Competition in WUMS," 

submitted to the Public Service Commission of Wisconsin by --------------------------------·------------w.sconsint>U6Iic-Servtce Corporation in Docket No. 6690-CE.: ---

187, September 26, 2003 • "Computer Models _In The Electric 

Power Industry," presented to staff of the Federal Trade 

Commission, ___ Washington, -- DC,- June 11, -2002 •- -"TEGG-- ---------- ---

EnergySource Market Share Analysis," submitted to FERC by 

TECO EnergySource, Inc. in Docket No. ER96-1563-0 17, 

September 1 o, 2001 • "Finding Market Power in Power Markets,'' 

presented to staff of the Federal Trade Commission, Washington, 

DC, June 20, 2001 • "A Study of Marketing Affiliate and Other 

Affiliate Holdings of Firm Capacity on Interstate Natural Gas 

Pipelines and the Effects on Natural Gas Markets," April. 30, 

2001, submitted to FERC by the Interstate Natural Gas 

Association of America in Docket No. PL00-1-003 • "Why We 

Should Use Computer Models to Unveil Market Power," 

presented atthe Sixth DOE-NARUC National Electricity Forum, 

Brown Convention Center, Houston, TX, September 16, 1998 • 

Comments, Agency Information Collection and Dissemination 

Activities: Comment Request, U.S. Department ofEnergy,.Energy 

Information Administration, August 28, 1998 • Comments, 

Revisedfiling Requirements Under Part 33 ofthe Commission's 

Regulations, Federal Energy Regulatory Commission Docket No. 

RM98-4-000, August 21, 1998 • "Use of Computer Simulation 

Models to Unveil Market Power," presented to staff of the 

Federal Trade Commission, Federal Energy Regulatory 

Commission and U.S. Department of Justice, Federal Trade 

Commission, Washington, DC, April 10, 1998 • "Use of 

Computer Simulation Models to Unveil Market Power: The 

Primergy Case," presented to the Bureau of Economics, Federal 

Trade Commission, Washington, DC, December 8, 1997 • "Use 

of Computer Simulation Models to Unveil Market Power," 

presented at the 29th Annual Conference of the Institute of Public 

Utilities, Williamsburg, Virginia, December 3, 1997 • "Mergers 

and Market Power," presented at the National Association of 

State Utility Consumer Advocates Mid-Year Meeting, 

Charleston, South Carolina, June 9, 1997 • "Market Power 

Analysis: An Economic Perspective," (with Mark Frankena), 

presented at the Strategic Research Institute Conference on The 

Legal Challenges of Restructuring, Arlington, Virginia, April 16, 

1997 • "Mergers and Market Power," presented at the Edison 

Electric Institute Workshop on FERC Merger Policy Guidelines, 

Arlington, Virginia, April I, 1997 • "New Approaches to 

Controlling Distribution Company Market Power," presented at 

the New York Energy Efficiency Council Conference on 

Innovative Solutions to a Changing Energy Market, New York 

Athletic Club, February 7, 1997 • Description of the Western 

Power Model, with Mark Frankena, Exhibit 8 to Prepared 

Testimony Before the Nevada Public Service Commission, 
Qualifications ofDr. Morris Attachment I 

Page 7 of7 

January 31, 1997 • Reviewer, American Bar Association, Section 

of Antitrust Law, Manual on the Economics of Antitrust Law, 

14th Supplement, 1995 • Referee, Quarterly Journal of Business 

and Economics, 1994-1995 • Reviewer, American Bar 

Association, Section of Antitrust Law, Manual on the Economics 

of Antitrust Law, lOth Supplement, 1993 • Expert Witness, 

----rederal American Inn of Court, Washington, DC, Winter 1993-.-------------

"Advertising Restrictions as Rent Increasing Costs," presented at 

a Contemporary Policy Issues Session of the Western Economics 

_____ Association's 67th--AnnuaLConference, July -1-9-92 • "Let's Make - --

Merger Policy 'Fully Consonant With Economic Theory,"' 

presented at a Contemporary Policy Issues Session of the 

Western Economics Association's 67th Annuar Conference, July 

1992 • "Advertising Restrictions as Rent Increasing Costs," 

Seminar, Department of Business Economics, Indiana University, 

October 1991 • "International Trade and Antitrust: Comments," 

presented at a Contemporary Policy Issues Session of the 

Western Economics Association's 66th Annual Conference, July 

1991 • Discussant, Western Economics Association's 66th 

Annual Conference, July 1991 • Horizontal Restraints Cases at 

the Federal Trade Commission: From American Medical 

Association through the Present," with Jim Langenfeld, presented 

at the 60th Annual Conference of the Southern Economics 

Association, November 1990 • "Defining Markets for Merger 

Analysis," with Gale Mosteller, presented at a Contemporary 

Policy Issues Session of the Western Economics Association's 

65th Annual Conference, cosponsored by the Antitrust Bulletin 

and the Antitrust and Trade Regulation Section of the Federal Bar 

Association, July 1990 • "Analyzing Agreements Among 

Competitors: What Does the Future Hold?" with Jim Langenfeld, 

presented at a Contemporary Policy Issues Session of the 

Western Economics Association's 65th Annual Conference, 

cosponsored by the Antitrust Bulletin and the Antitrust and Trade 

Regulation Section of the Federal Bar Association, July 1990 • 

"The Relationship Between Industrial Sales Prices and 

Concentration of Natural Gas Pipelines," Seminar, Office of 

-Economic Policy, Federal Energy Regulatory Commission, 

Summer 1989 • "The Relationship Between Industrial Sales 

Prices and Concentration of Natural Gas Pipelines," Seminar, 

Economic Analysis Group, Antitrust Division, U.S. Department 

of Justice, February 1989 • "Deregulation by Vertical 

Integration?" Seminar, Department of Business Economics, 

Indiana University, January 1989 • Discussant, Industrial 

Organization Society Session, Annual Meeting of the American 

Economics Association, December 1988 • "Concentration and 

Price in the Natural Gas Industry," Seminar, Federal Trade 

Commission, July 1988 • "Relevant Measures of Concentration 

for Antitrust Policy," presented at an Industrial Organization 

Society Session of the 57th Annual Conference of the Southern 

Economics Association, November 1987