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Power & Pipes

FERC, CFTC, and State Energy Law Developments

On September 15, 2011, FERC issued a Notice of Proposed Rulemaking (NOPR) proposing to eliminate the semiannual storage reporting requirements for interstate and intrastate natural gas companies. These requirements are set forth in 18 C.F.R. § 284.13(e) for interstate natural gas companies and in 18 C.F.R. § 284.126(c) for section 311 and Hinshaw pipelines providing interstate storage service. FERC found that these reports are largely duplicative of other reporting requirements.

Order No. 637, effective more than 10 years ago, requires interstate pipelines to post on their Internet websites basic information on the terms of each transportation and storage contract with individual shippers no later than the first nomination under a transaction. Much of this same information is contained in the pipelines’ semiannual storage reports. FERC found that there appears to be no need to require interstate pipelines to continue filing additional semiannual reports of their storage transactions that contain much of this same information. Although the posting information does not require that the total amount of gas injected into or withdrawn during a storage injection or withdrawal period and the associated revenue on a per-customer basis be included, FERC found that no party provided comments in this proceeding explaining how storage customers would benefit from having this information from all pipelines on a generic basis rather than a case-By-case basis.

In Order Nos. 735 and 735-A, FERC copied the substantive elements of the semiannual storage reports in developing requirements for the new Form 549D quarterly reports from section 311 and Hinshaw pipelines for both transportation and storage transactions. These reports do not require section 311 and Hinshaw storage providers to report revenues collected from each storage customer. No party provided comments indicating how per-customer revenue information would significantly enhance FERC’s or parties’ ability to determine whether a market-based storage provider should have its authorization to charge those rates reviewed. Section 311 and Hinshaw pipelines provided detailed arguments that providing the public with individual customer storage revenue is burdensome. Although one party requested that section 311 and Hinshaw pipelines provide information on its quarterly reports addressing storage compressor fuel and lost and unaccounted-for gas, FERC rejected this request because it generally requires these facilities to establish a tracker or true-up mechanism in their statements of operating condition for fuel and lost or unaccounted-for gas.

Although not required By President Obama’s Executive Order 13563, “Improving Regulation and Regulatory Review,” FERC noted that this NOPR is part of its efforts to streamline natural gas pipeline reporting requirements and to continue to ensure that FERC regulations are effective, timely, and up to date.

Comments addressing this NOPR proposing the elimination of the semiannual storage reporting requirements for interstate and intrastate natural gas companies are due 60 days after publication in the Federal Register.