Fed Try to Shore Up Gas Index

By Published On: September 23, 2008

The Federal Energy Regulatory Commission voted to increase requirements for data supplied by natural gas companies on volume, purchases, and sales that could be reported to assemble natural gas indexes. The move comes as a result of authority granted by the 2005 Energy Policy Act requiring price transparency in gas markets. “People have lost confidence in the index,” said FERC member Philip Moeller during a September 18 meeting. In California, one of the fallouts from the 2000-01 energy crisis was accusations by state government that gas traders fed the publishers of indexes false information to make it appear that the wholesale gas market was more liquid than in actuality. According to regulatory staff, the new requirements are aimed at large-scale gas companies. “It targets the significant players,” said Gabe Sterling, FERC Office of Enforcement investigator. FERC also approved plans by the California Independent System Operator to model its interconnections with neighboring grid operators. The move arises due to a tiff between the grid operator, the Sacramento Municipal Utility District, and the Turlock Irrigation District. The latter two have been reluctant to share data on their own grids. “The California ISO remains open to further discussions with SMUD, TID and others to determine how they can provide the data the ISO needs to develop more specific pricing,” according to CAISO spokesperson Gregg Fishman. The model would establish proxy prices for transactions.

Share this story

Not a member yet?

Subscribe Now