Tuesday, February 2, 2010

Judge orders FERC to reconsider pipeline reporting rules

WASHINGTON - The D.C. Circuit has ordered the Federal Energy Regulatory Commission to reconsider its reporting requirements for interstate natural gas pipelines, saying the agency "failed to respond to the reasonable concerns of a dissenting commissioner."
In 2008, FERC adopted new reporting requirements that called for greater clarity, so users could better determine if pipelines were charging too much for operating costs.
The agency took action after discovering that pipelines were carrying over enormous fuel costs beyond what was consumed - $711 million in 2005, for example. This meant higher "fuel charges" for customers, who were billed a percentage of the retained fuel costs to offset the pipelines' costs.
FERC required pipelines to break down their costs, including showing the difference between the amount of gas received from shippers and the volume of gas consumed each month.
"In the commission's view, customers should only pay for the services they use," Judge Janice Rogers Brown explained.
The American Gas Association, a national trade group of gas utilities, agreed that reporting revisions were needed, but argued that "greater clarity regarding gas purchase and sales activities can be achieved."

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