Regulation of Short-Term Natural Gas Transportation Services, and Regulation of Interstate Natural Gas Transportation Services

The Federal Energy Regulatory Commission (Commission) is amending its regulations in response to the growing development of more competitive markets for natural gas and the transportation of natural gas. In this rule, the Commission is revising its current regulatory framework to improve the efficiency of the market and provide captive customers with the opportunity to reduce their cost of holding long- term pipeline capacity while continuing to protect against the exercise of market power. The rule revises Commission pricing policy to enhance the efficiency of the market by waiving price ceilings for short-term released capacity for a two year period and permitting pipelines to file for peak/off-peak and term differentiated rate structures. It effects changes in regulations relating to scheduling procedures, capacity segmentation and pipeline penalties to improve the competitiveness and efficiency of the interstate pipeline grid. It narrows the right of first refusal to remove economic biases in the current rule, while still protecting captive customers' ability to resubscribe to long-term capacity. And, it improves the Commission's reporting requirements to provide more transparent pricing information and permit more effective monitoring of the market.