Subject: FERC Issues for ENA/EES
From: [email-masked]
To: [email-masked]
Cc: [email-masked]
Date: Wed, 22 Aug 2001 08:57:02 -0700 (PDT)

Per your request, here is the status of two issues we are addressing which are currently on the radar screen at FERC.

Reporting Requirements for Sales to California

On July 25, 2001, FERC issued an Order imposing reporting requirements on natural gas sales to California.  The order affects transporters and LDCs as well as sellers.  FERC has provided templates which parties must use in compiling the reports, which are due thirty days after the end of the month.  Sellers are required to report all their sales that are made either at the California border or within the state on a daily basis.  They must also report separately the transportation component and the gas commodity component of the price for each sales contract.  In essence, the FERC requirement assumes that sellers can track individual packages of gas from the wellhead to the point of sale.

ENA/EES are filing a request for rehearing of the Order, arguing:

1.	That it is an error to formalize the reporting requirements.  They should only be in place on an ad hoc basis to allow FERC to collect and review data for the periods of time that an actual situation deserving of analysis exists.  The formalized and generally applicable requirements adopted go far beyond the scope of FERC's authority.
2.	That FERC must properly assess the time and work burden on the companies subject to the requirements.  Neither ENA nor EES manage their business in a way that would allow them to extract the required information without making arbitrary, after-the-fact determinations of which purchases were made for which customers, and this would involve significant manual intervention.  The Gas Operations group, who have been evaluating our systems to determine how we could comply, believe that it may be necessary to assign at least one person full-time to the task of compiling the data.  Therefore, reporting entities should not be required to supply "manufactured data" simply to complete the forms.
3.	That FERC should extend the deadline for reporting to 45 days from the end of the reporting month.  The personnel in gas accounting who will have to extract the data are busiest at the first of the month.  Extending the deadline to mid-month would make compliance easier and more accurate.

The first two arguments are generally the same ones we made when we filed comments in the original NOPR.  

Marketing Affiliate NOPR

It is almost certain that FERC will issue a NOPR sometime in September to address possible changes in the marketing affiliate rule.  Some issues that we expect to be addressed include expanding the definition of marketing affiliates to include electric generators and some further tightening of the regulations in response to the "funny money" issue that certain parties keep bringing up.  

We have gotten informal feedback that certain staff persons at FERC are questioning why they have not been hearing from marketing affiliates while the pipelines and their association have been coming in arguing against any changes to the rule.  Therefore, we have tentatively scheduled a meeting next week, while we are in D.C. for a technical conference on the El Paso Reallocation issues, to meet with selected staff personnel to discuss the reasons we do not see any need for changes, although we are willing to accept a designation of affiliates engaged in electric generation development as marketing affiliates.  This position should not disadvantage us in any way, since we fall under the designation anyway because of our organizational structure.  We are also developing data on our firm contracts with the Enron pipelines in anticipation of responding to the NOPR.