Federal Regulatory Issues and Advocacy

 

Federal Regulatory Issues and Advocacy

AGA advocates on behalf of its member natural gas distribution utilities before Federal agencies in the area of energy market regulation. The Federal Energy Regulatory Commission (FERC) regulates wholesales sales, transportation and storage of natural gas in interstate commerce. AGA members purchase these services from interstate pipelines regulated by FERC, and some AGA members provide interstate services and are directly regulated by FERC for part of their operations. The Commodity Futures Trading Commission regulates commodity exchanges and financial and derivative transactions related to commodities, including natural gas. Many AGA members use financial transactions, both exchange-traded and over-the-counter, to hedge volatility in the cost of providing natural gas service. The AGA FERC Regulatory Committee implements the AGA's policy priorities in the area of energy market regulation, including formulating responses to FERC and CFTC regulatory initiatives.

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Capacity Release

Local natural gas utilities have an important stake in how the Federal Energy Regulatory Commission (FERC) regulates the rates, terms and conditions of interstate pipeline transportation and storage services.
FERC Order 636 & 637

The Natural Gas Act (NGA) of 1938 and subsequent amendments define the Federal Energy Regulatory Commission's (FERC) role regulating the natural gas industry. Under the NGA, the Commission regulates both the construction and operation of natural gas pipelines, on-shore LNG import terminals, and related facilities. In this role, FERC oversees the rates, terms and conditions of sales for resale and transportation of natural gas in interstate commerce.
Fuel Retention Practices

Interstate natural gas pipelines consume volumes of natural gas in their operations to fuel compressor stations and to make up for lost and unaccounted-for gas. Pipelines frequently require their shippers to contribute a percentage of the volumes of natural gas tendered for transportation for these operational purposes. Pipelines also include in their tariffs the mechanism for retaining a percentage for fuel and the percentage retention rates. Currently effective fuel retention rates range from fractions of a percent to as high as 13 percent.
Gas-Electric Coordination

AGA believes that the overall goal of gas-electric coordination efforts should be to preserve and, where appropriate, enhance reliability for all customers, both natural gas and electric.
Natural Gas Price Transparency

FERC is approaching transparency more broadly than it did price reporting, as was the case through 2006, and making efforts to enhance transparency in various proceedings or initiatives recently set in motion by the Commission. The policy driver is a desire to increase confidence in the functioning of natural gas commodity markets.
Natural Gas Quality and Gas Interchangeability

Quality and interchangeability issues are being addressed in individual pipeline and LNG proceedings before the Federal Energy Regulatory Commission (FERC).
North American Energy Standards Board

Because many AGA members have a stake in the outcome of NAESB deliberations, AGA monitors NAESB activities to mitigate adverse effects on the business and operations of local distribution companies and their approaches in their efforts in front of regulatory bodies.
Pipeline Capacity

The U.S. natural gas pipeline grid is an integrated system of interstate and intrastate transportation that has moved gas to and from nearly any location in the lower-48 states.
Purchased Gas Adjustments

Natural gas distribution companies typically include in their base rates the cost of gas the utilities purchase for customers. Utilities do not mark-up or earn a profit on the sale of the natural gas commodity they acquire on behalf of their customers. Instead, utilities are reimbursed the costs of natural gas supplies through base rates, which are set in periodic rate cases before state regulatory commissions.
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