

[Federal Register: January 4, 2008 (Volume 73, Number 3)]
[Rules and Regulations]               
[Page 1013-1042]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04ja08-8]                         


[[Page 1013]]

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Part IV





Department of Energy





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Federal Energy Regulatory Commission



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18 CFR Parts 260, 284, and 385



Transparency Provisions of Section 23 of the Natural Gas Act; Final 
Rule


[[Page 1014]]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 260, 284 and 385

[Docket No. RM07-10-000; Order No. 704]

 
Transparency Provisions of Section 23 of the Natural Gas Act

Issued December 26, 2007.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final Rule.

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SUMMARY: In the final rule, the Commission promulgates regulations that 
require certain natural gas market participants to report information 
regarding their reporting of transactions to price index publishers and 
their blanket sales certificate status, and to report annually certain 
information regarding their wholesale, physical natural gas 
transactions for the previous calendar year. Certain market 
participants engaged in a de minimis volume of transactions will not be 
required to report information regarding their transactions for the 
calendar year. The reported information will make it possible to 
estimate the size of the physical U.S. natural gas market, to assess 
the use of index pricing in that market, and to determine the size of 
the fixed-priced trading market that produces the information. These 
regulations facilitate price transparency in markets for the wholesale 
sale of physical natural gas in interstate commerce.

DATES: Effective Date: This rule will become effective February 4, 
2008.

FOR FURTHER INFORMATION CONTACT: Stephen J. Harvey (Technical), Office 
of Enforcement, Federal Energy Regulatory Commission, 888 First Street, 
NE., Washington, DC 20426, (202) 502-6372, Stephen.Harvey@ferc.gov.
    Christopher J. Peterson (Technical), Office of Enforcement, Federal 
Energy Regulatory Commission, 888 First Street, NE., Washington, DC 
20426, (202) 502-8933, Christopher.Peterson@ferc.gov.
    Eric Ciccoretti (Legal), Office of Enforcement, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 
(202) 502-8493, Eric.Ciccoretti@ferc.gov.

SUPPLEMENTARY INFORMATION: Before Commissioners: Joseph T. Kelliher, 
Chairman; Suedeen G. Kelly, Marc Spitzer, Philip D. Moeller, and Jon 
Wellinghoff.

I. Background

    1. In this final rule, the Commission promulgates regulations that 
require certain natural gas market participants to report annually 
certain information regarding their wholesale, physical natural gas 
transactions, their reporting of transactions to price index 
publishers, and their blanket certificate status. This rule arises from 
a Notice of Proposed Rulemaking (NOPR) issued on April 19, 2007, which 
set forth two proposals, an annual reporting requirement proposal and a 
daily pipeline posting proposal.\1\ This rule addresses the annual 
reporting requirement. The Commission addresses the daily pipeline 
posting proposal concurrently in a Notice of Proposed Rulemaking in a 
separate docket, Docket No. RM08-2-000.
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    \1\ Transparency Provisions of Section 23 of the Natural Gas 
Act, 72 FR 20791 (Apr. 26, 2007), FERC, Stats. and Regs. ] 32,614 
(2007).
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    2. The Commission largely adopts the annual reporting proposal in 
the NOPR issued in this docket, with a few changes and a few 
clarifications. The final rule requires that any buyer or seller of 
more than a de minimis volume of natural gas report aggregate volumes 
of relevant transactions in an annual filing using a new form, 
Commission Form No. 552. A market participant buying or selling less 
than a de minimis volume that operates under blanket sales certificate 
authority pursuant to Sec.  284.402 or Sec.  284.284 of the 
Commission's regulations must also submit a Form No. 552 for 
identification and certain reporting purposes, but is not required to 
report aggregate volumes of relevant transactions. A market participant 
that buys or sells less than a de minimis volume but that does not 
operate under blanket sales certificate authority need not submit a 
Form No. 552. Filings of the form will be due on May 1 of each year, 
starting on May 1, 2009 for the calendar year 2008.
    3. The significant changes from the proposal in the NOPR fall 
generally into four categories. The first category of changes focuses 
the reporting requirement solely on wholesale buyers and sellers by 
excluding retail transactions. The second category of changes, intended 
to focus on price formation in the spot markets, narrows the questions 
on new Form No. 552 to obtain information about the amount of daily or 
monthly fixed-priced trading that are eligible to be reported to price 
index publishers as compared to the amount of trading that uses or 
refers to price indices. The third category of changes expands the 
number of companies that must state publicly whether or not they report 
to index price publishers. The last category involves other 
clarifications of questions raised in comments and changes made to 
streamline completion of the form.
    4. In promulgating the final rule, the Commission exercises its new 
transparency authority under section 23 of the Natural Gas Act 
(transparency provisions).\2\ Congress added the transparency 
provisions in enacting the Energy Policy Act of 2005 (EPAct 2005).\3\ 
The transparency provisions direct the Commission ``to facilitate price 
transparency in markets for the sale or transportation of physical 
natural gas in interstate commerce, having due regard for the public 
interest, the integrity of those markets, and the protection of 
consumers,'' \4\ and further allow the Commission to ``prescribe such 
rules as the Commission determines necessary and appropriate to carry 
out the purposes of [the transparency provisions]''--rules that ``shall 
provide for the dissemination, on a timely basis, of information about 
the availability and prices of natural gas sold at wholesale and 
interstate commerce to the Commission, State commissions, buyers and 
sellers of wholesale natural gas, and the public.'' \5\
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    \2\ Section 23 of the Natural Gas Act, 15 U.S.C. 717t-2 (2000 & 
Supp. V 2005).
    \3\ Energy Policy Act of 2005, Pub. L. 109-58, 119 Stat. 594 
(2005).
    \4\ Section 23(a)(1) of the Natural Gas Act, 15 U.S.C. 717t-
2(a)(1) (2000 & Supp. V 2005).
    \5\ Section 23(a)(2) of the Natural Gas Act, 15 U.S.C. 717t-
2(a)(2) (2000 & Supp. V 2005).
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    5. The final rule will facilitate transparency of the price 
formation process in natural gas markets by collecting information to 
understand in broad terms the size of the natural gas market and the 
use of fixed prices and of index prices. Currently, because of the way 
transactions take place in the natural gas industry, there is no way to 
estimate in even the broadest terms the overall size of the natural gas 
market or its breakdown by types of contract provision, including 
pricing and term (e.g., spot or for delivery farther in the future).\6\ 
As noted by the price index developer Platts, the question of what is 
the total size of the traded market has ``hung over the gas market for 
years.'' \7\ More particularly, there is no way to determine important 
volumetric relationships between (a) the fixed-

[[Page 1015]]

price, day-ahead or month-ahead transactions that form price indices; 
and (b) transactions that use price indices. Without the most basic 
information about these volumetric relationships, the Commission has 
been hampered in its oversight and its ability to assess the adequacy 
of price-forming transactions. Market participants are likewise unable 
to evaluate their use of indexed transactions. Typically, market 
participants rely on index-priced transactions as a way to reference 
market prices without taking on the risks of active trading. These 
market participants rely on index prices, often whether or not those 
prices are derived from a robust market of fixed-price transactions.
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    \6\ In its supplemental comments, Platts provided information 
regarding its use of physical basis transactions in compiling 
monthly indices. Supplemental Comments of Platt's, Transparency 
Provisions of the Energy Policy Act, Docket No. AD06-11-000 (filed 
Feb. 23, 2007).
    \7\ Comments of Platts at 6, Transparency Provisions of the 
Energy Policy Act, Docket No. AD06-11-000 (filed Nov. 1, 2006).
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    6. Price formation in natural gas markets makes no distinction 
between transactions that are jurisdictional to the Commission under 
the Natural Gas Act, absent new section 23 of that statute, and those 
that are not. While the Commission's traditional jurisdiction under 
sections 4, 5, and 7 of the Natural Gas Act is limited to ``natural gas 
compan[ies],'' \8\ this limitation is not applicable to the 
Commission's jurisdiction under the transparency provisions.\9\ As a 
consequence, in order to assess the size and structure of U.S. natural 
gas markets, information about wholesale natural gas transactions is 
required from a market participant regardless of whether it is subject 
to the Commission's traditional jurisdiction.
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    \8\ See 15 U.S.C. 717b-717i.
    \9\ Section 23 of the Natural Gas Act, 15 U.S.C. 717t-2 (2000 & 
Supp. V 2005).
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    7. By obtaining information about natural gas transactions, the 
final rule would further the Commission's efforts to monitor price 
formation in the wholesale natural gas markets, which support the 
Commission's market-oriented policies for the wholesale natural gas 
industries. Those policies in turn require that interested persons have 
broad confidence that reported market prices accurately reflect the 
interplay of legitimate market forces. Without confidence in the basic 
processes of price formation, market participants cannot have faith in 
the value of their transactions, the public cannot believe that the 
prices they see are fair, and it is more difficult for the Commission 
to ensure that jurisdictional prices are ``just and reasonable.'' \10\
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    \10\ See sections 4 and 5 of the Natural Gas Act, 15 U.S.C. 
717c, 717d; sections 205 and 206 of the Federal Power Act, 16 U.S.C. 
824d, 824e.
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    8. The performance of Western electric and natural gas markets 
early in the decade shook confidence in posted market prices for 
energy. In examining these markets, the Commission's Staff found, inter 
alia, that some companies submitted false information to the publishers 
of natural gas price indices, so that the resulting reported prices 
were inaccurate and untrustworthy.\11\ As a result, questions arose 
about the legitimacy of published price indices, remaining even after 
the immediate crisis passed. Moreover, market participants feared that 
the indices might have become even more unreliable, since reporting 
(which has always been voluntary) declined to historically low levels 
in late 2002.
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    \11\ See ``Initial Report on Company-Specific Separate 
Proceedings and Generic Reevaluations; Published Natural Gas Price 
Data; and Enron Trading Strategies--Fact Finding Investigation of 
Potential Manipulation of Electric and Natural Gas Prices,'' Docket 
No. PA02-2-000 (Aug. 2003).
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    9. The Commission recognized concerns about price discovery in 
electric and natural gas markets as early as January 2003, when, prior 
to passage of EPAct 2005, the Commission made use of its existing 
authority under the Natural Gas Act and the Federal Power Act to help 
restore confidence in natural gas and electricity price indices. The 
Commission expected that, over time, improved price discovery processes 
would naturally increase confidence in market performance. On July 24, 
2003, the Commission issued a Policy Statement on Electric and Natural 
Gas Price Indices (Policy Statement) that explained its expectations of 
natural gas and electricity price index developers and the companies 
that report transaction data to them.\12\ On November 17, 2003, the 
Commission adopted behavior rules for certain electric market 
participants in its Order Amending Market-Based Rate Tariffs and 
Authorizations relying on section 206 of the Federal Power Act to 
condition market-based rate authorizations,\13\ and for certain natural 
gas market participants in Amendments to Blanket Sales Certificates, 
relying on section 7 of the Natural Gas Act to condition blanket 
marketing certificates.\14\ The behavior rules bar false statements and 
require certain market participants, if they report transaction data, 
to report such data in accordance with the Policy Statement. These 
participants must also notify the Commission whether or not they report 
prices to price index developers in accordance with the Policy 
Statement.\15\ On November 19, 2004, the Commission issued an order 
that addressed issues concerning price indices in natural gas and 
electricity markets and adopted specific standards for the use of price 
indices in jurisdictional tariffs.\16\
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    \12\ 104 FERC ] 61,121 (2003). Subsequently, in the same 
proceeding, the Commission issued an Order on Clarification of 
Policy Statement on Natural Gas and Electric Price Indices, 105 FERC 
] 61,282 (2003) (Order on Clarification of Policy Statement) and an 
Order on Further Clarification of Policy Statement on Natural Gas 
and Electric Price Indices, 112 FERC ] 61,040 (2005) (Order on 
Further Clarification of Policy Statement).
    \13\ Investigation of Terms and Conditions of Public Utility 
Market-Based Rate Authorizations, 105 FERC ] 61,218, at P 1 (2003), 
superseded in part by, Conditions for Public Utility Market-Based 
Rate Authorization Holders, Order No. 674, 71 FR 9695 (Feb. 27, 
2006), FERC Stats. and Regs. ] 31,208 (2006).
    \14\ Amendments to Blanket Sales Certificates, Order No. 644, 68 
FR 66323 (Nov. 26, 2003), FERC Stats. and Regs. ] 31,153, at P 1 
(2003) (citing 15 U.S.C. 717f), reh'g denied, 107 FERC ] 61,174 
(2004).
    \15\ Certain portions of the behavior rules were rescinded in 
Amendments to Codes of Conduct for Unbundled Sales Service and for 
Persons Holding Blanket Marketing Certificates, Order No. 673, 71 FR 
9709 (Feb. 27, 2006), FERC Stats. and Regs. ] 31,207 (2006). The 
requirements to report transaction data in accordance with the 
Policy Statement and to notify the Commission of reporting status 
were retained in renumbered sections. 18 CFR 284.288(a), 284.403(a).
    \16\ Price Discovery in Natural Gas and Electric Markets, 109 
FERC ] 61,184, at P 73 (2004).
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    10. In the Policy Statement, among other things, the Commission 
directed Staff to continue to monitor price formation in wholesale 
markets, including the level of reporting to index developers and the 
amount of adherence to the Policy Statement standards by price index 
developers and by those who provide data to them.\17\ In adhering to 
this directive, Commission Staff documented improvements in the number 
of companies that reported prices from back offices, that adopted codes 
of conduct, and that audited their price reporting practices.\18\ These 
efforts resulted in significant progress in the amount and quality of 
both price reporting and the information provided to market 
participants by price indices.\19\ Further, in conformance with this 
directive, Commission Staff recently concluded audits of three natural 
gas market participants with blanket certificate authority that were 
data providers subject to Sec.  284.403 of the Commission's 
regulations.\20\
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    \17\ Policy Statement at P 43.
    \18\ Federal Energy Regulatory Commission, ``Report on Natural 
Gas and Electricity Price Indices,'' at 2, Docket No. PL03-3-004 
(2004).
    \19\ See, e.g., General Accountability Office, ``Natural Gas and 
Electricity Markets: Federal Government Actions to Improve Private 
Price Indices and Stakeholder Reaction'' (December 2005).
    \20\ The audits found general compliance with the price 
reporting standards. See April 5, 2007 letter issued to Anadarko 
Energy Services Co. in Docket No. PA06-11-000 by Director, Office of 
Enforcement and attached Audit of Price Index Reporting Compliance; 
April 5, 2007 letter issued to BG Energy Merchants, LLC in Docket 
No. PA06-12-000 by Director, Office of Enforcement and attached 
Audit of Price Index Reporting Compliance; April 5, 2007 letter 
issued to Marathon Oil Co. in Docket No. PA06-13-000 by Director, 
Office of Enforcement, and attached Audit of Price Index Reporting 
Compliance.

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[[Page 1016]]

    11. Congress recognized that the Commission might need expanded 
authority to mandate additional reporting to improve market confidence 
through greater price transparency and included in EPAct 2005 authority 
for the Commission to obtain information on wholesale electric and 
natural gas prices and availability. Under the Federal Power Act \21\ 
and the Natural Gas Act,\22\ the Commission has long borne a 
responsibility to protect wholesale electric and natural gas consumers. 
EPAct 2005 emphasized the Commission's responsibility for protecting 
the integrity of the markets themselves as a way of protecting 
consumers in an active market environment. In particular, Congress 
directed the Commission to facilitate price transparency ``having due 
regard for the public interest, the integrity of [interstate energy] 
markets, [and] fair competition.'' \23\ In the new transparency 
provisions of section 23 of the Natural Gas Act, Congress provided that 
the Commission may, but is not obligated to, prescribe rules for the 
collection and dissemination of information regarding the wholesale, 
interstate markets for natural gas, and authorized the Commission to 
adopt rules to assure the timely dissemination of information about the 
availability and prices of natural gas and natural gas transportation 
in such markets.\24\
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    \21\ 16 U.S.C. 824 et seq.
    \22\ 15 U.S.C. 717 et seq.
    \23\ Section 23(a)(1) of the Natural Gas Act, 15 U.S.C. 717t-
2(a)(1) (2000 & Supp. V 2005); see also section 220 of the Federal 
Power Act, 16 U.S.C. 824t (2000 & Supp. V 2005) (identical 
language).
    \24\ Section 23(a)(2) & (3) of the Natural Gas Act, 15 U.S.C. 
717t-2(a)(2) & (3) (2000 & Supp. V 2005).
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II. Overview of Final Rule

    12. In this final rule, the Commission largely adopts the proposal 
in the NOPR, with a few changes and a few clarifications. The final 
rule requires that any buyer or seller of more than a de minimis volume 
of natural gas report aggregate volumes of relevant transactions in an 
annual filing using a new form, Commission Form No. 552. A market 
participant that buys or sells less than a de minimis volume and that 
operates under blanket sales certificate authority under Sec.  284.402 
or Sec.  284.284 of the Commission's regulations must also submit a 
Form No. 552 for identification and certain reporting purposes, but is 
not required to report aggregate volumes of relevant transactions. A 
market participant that buys or sells less than a de minimis volume but 
that does not operate under blanket sales certificate authority need 
not submit a Form No. 552. Filings of the form will be due on May 1 of 
each year, starting on May 1, 2009 for the calendar year 2008.
    13. The significant changes from the proposal in the NOPR fall 
generally into four categories. The first category of changes focuses 
the reporting requirement solely on wholesale buyers and sellers by 
excluding retail transactions. The second category of changes, intended 
to focus on price formation in the spot markets, narrows the questions 
on new Form No. 552 to obtain information about the amount of daily or 
monthly fixed-price trading that are eligible to be reported to price 
index publishers as compared to the amount of trading that uses or 
refers to price indices. The third category of changes expands the 
number of companies that must state publicly whether or not they report 
to index price publishers. The last category involves other 
clarifications of questions raised in comments and changes made to 
streamline completion of the form.
    14. On Form No. 552, certain wholesale natural gas buyers and 
sellers must identify themselves to the Commission and report summary 
information about their physical natural gas transactions for the 
previous calendar year including:
    a. the total volume of transactions for the previous calendar year;
    b. the volume of transactions that were priced at fixed prices for 
next-day delivery and were reportable to price index publishers;
    c. the volume of transactions priced by reference to next-day gas 
price indices;
    d. the volume of transactions that were priced at fixed prices for 
next-month delivery and were reportable to price index publishers; and,
    e. the volume of transactions priced by reference to next-month gas 
price indices.
    15. As defined in Form No. 552, a transaction is ``reportable to 
price index publishers'' if it is made at a reportable location where a 
price index publisher collects information for fixed-price transactions 
with next-day or next-month delivery obligations in order to create a 
price index. As these locations may change over time, Commission Staff 
will post each year a list for the coming year of current ``Reportable 
Locations'' for each price index publisher on the Commission Web site 
at http://www.ferc.gov/docs-filing/eforms.asp#552. This information 

will allow a market participant to determine whether a transaction 
should be classified on Form No. 552 as a reportable transaction, i.e., 
one made at a reportable location.
    16. In addition, on the form, a natural gas seller must state 
whether it operates under blanket certificate authority under Sec.  
284.402 of the Commission's regulations, whether it reports 
transactions to price index publishers, and whether any such reporting 
complies with the standards provided in Sec.  284.403(a).\25\ 
Similarly, an interstate pipeline must state whether it operates under 
blanket certificate authority under Sec.  284.284 of the Commission's 
regulations, whether it reports transactions to price index publishers 
and whether any such reporting complies with the standards provided in 
Sec.  284.288(a).\26\
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    \25\ In its regulations, the Commission grants automatically 
blanket certificates of convenience and necessity under section 7 of 
the Natural Gas Act to interstate natural gas pipelines ``to provide 
unbundled firm and interruptible sales,'' 18 CFR 284.284 (blanket 
certificates for unbundled sales services), and to any person who is 
not an interstate pipeline ``to make sales for resale at negotiated 
rates,'' 18 CFR 284.402 (blanket market certificate).
    \26\ The Commission recognizes that few if any interstate 
natural gas pipelines still make wholesale sales. Nevertheless, if 
they were to sell gas at wholesale in interstate commerce, they 
would be subject to the final rule. More relevant, of course, is the 
fact that all of their affiliates making wholesale sales in 
interstate commerce would be subject to the final rule.
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    17. The final rule requires these holders of blanket sales 
certificates and, also, wholesale buyers and sellers of more than a de 
minimis volume in the reporting year to report to the Commission on 
Form No. 552 whether they report transactions to natural gas price 
index publishers.\27\ Sellers with blanket sales authority must 
indicate whether such reporting complies with the Commission's 
standards for such reporting. Prior to this final rule, such sellers 
were required to notify the Commission only when it changed their 
practice regarding such reporting. The final rule will make 
notifications of reporting status more reliable.
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    \27\ New 18 CFR 260.401.
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    18. The final rule is designed to permit an annual estimate of (a) 
the size of the physical domestic natural gas market, (b) the use of 
index pricing in that market, (c) the size of the fixed-price trading 
market that produces price indices from the subset reported to index 
publishers, and (d) the relative size of major traders. Obtaining such 
estimates requires information from all significant buyers and sellers 
of wholesale natural gas in the United States. The final rule creates 
an annual requirement that buyers and sellers of more than a de minimis 
volume of

[[Page 1017]]

natural gas report volumes of relevant transactions to the Commission.
    19. Although the natural gas transparency provisions authorize the 
Commission to require reporting of detailed transaction-by-transaction 
information from wholesale natural gas buyers and sellers, the 
Commission will collect a more limited set of aggregate information 
designed to assess the market.

III. Notice of Proposed Rulemaking

    20. In the NOPR, the Commission proposed that buyers and sellers of 
more than a de minimis volume of natural gas be required to report 
aggregate numbers and volumes of relevant transactions in an annual 
filing. The Commission proposed a form for this reporting, which was 
attached to the NOPR as ``Form [X].''
    21. Under the proposed reporting requirement, certain natural gas 
buyers and sellers would have had to identify themselves to the 
Commission and report summary information about physical natural gas 
transactions for the previous calendar year including: (a) Their total 
amount of physical natural gas transactions by number and volume; (b) 
the breakdown of their transactions by purchases and sales; (c) the 
number and volume breakdown of their purchases and sales by whether 
they were conducted in monthly or daily spot markets; and (d) the 
number and volume breakdown of their purchases and sales by type of 
pricing, in particular whether that pricing was fixed or indexed.
    22. In addition, under the proposal, a natural gas seller would 
have been required to state whether it operates under blanket 
certificate authority under Sec.  284.402 of the Commission's 
regulations, whether it reports transactions to price index publishers 
and whether any such reporting complies with the standards provided in 
Sec.  284.403(a). Similarly, an interstate pipeline would have been 
required to state whether it operates under blanket certificate 
authority under Sec.  284.284 of the Commission's regulations, and 
whether it reports transactions to price index publishers and whether 
any such reporting complies with the standards provided in Sec.  
284.288(a).
    23. In response to the NOPR, seventy-four entities filed comments. 
Commission Staff held an informal workshop to discuss implementation 
and other technical issues associated with the proposals set forth in 
the NOPR on July 24, 2007. Following the workshop, twenty-nine entities 
filed reply comments.

IV. Comments on the Notice of Proposed Rulemaking

A. Merits of Annual Reporting Requirement

    24. As an initial matter, no commenter asserted that the Commission 
lacked jurisdiction to implement the annual reporting proposal or 
lacked jurisdiction over market participants required to report, i.e., 
``any buyer or seller that engaged in wholesale physical natural gas 
transactions the previous calendar year.'' \28\
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    \28\ New 18 CFR 260.401(b).
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    25. The vast majority of commenters on this issue supported the 
annual reporting proposal, although many suggested refinements. For 
instance, MidAmerican Energy Company and PacifiCorp (MidAmerican) 
supported the reporting proposal and praised FERC's ``sensible 
approach,'' which would ``help market participants and state and 
federal regulators better understand the natural gas market and pricing 
process.'' \29\ Similarly, Wisconsin Electric Power Company and 
Wisconsin Gas Company LLC (the Wisconsin Companies) supported the 
reporting proposal stating that the ``benefits of such a reporting 
regime outweigh the expenditures of resources necessary to implement.'' 
\30\ The Wisconsin Companies cautioned, however, that ``[a]ny further 
frequency or granularity in the reporting requirements * * * would be 
unduly burdensome.'' \31\ The Wisconsin Companies proposed changes to 
the information reported, suggesting a simple breakdown for transaction 
information between monthly or daily spot markets would be insufficient 
and suggesting obtaining information about transactions of longer than 
a month and intraday transactions.\32\ The Wisconsin Companies reasoned 
that these categories of transactions ``make up a substantial amount of 
the purchases and sales conducted by the Companies and therefore need 
to be included in the reporting.'' \33\
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    \29\ MidAmerican Comments at 1 & 5; see also Statoil Comments at 
4-5 (supporting annual reporting requirement).
    \30\ Wisconsin Companies Comments at 4.
    \31\ Id.
    \32\ Id. at 6.
    \33\ Id.
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    26. The Public Service Commission of New York (PSCNY) supported the 
annual reporting proposal as a way to ``provide critical information to 
analyze the important volumetric relationships between the fixed-price 
day-ahead or month-ahead transactions that form price indices.'' \34\ 
The Producer Coalition \35\ also supported the annual reporting 
proposal as a way to create greater market confidence and transparency. 
The information obtained from the requirement, according to the 
Producers Coalition, would result in greater understanding of the 
prices and availability of physical natural gas in interstate commerce 
and allow for assessment of the ratio of fixed-price transactions to 
index-priced transactions.\36\ AGA supported the annual reporting of 
transaction data ``because it could provide valuable information 
regarding the size of the physical natural gas markets.'' \37\
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    \34\ PSCNY Comments at 2.
    \35\ The Producer Coalition consists of three independent 
producers: Forest Oil Corporation; Hydro Gulf of Mexico LLC; and, 
Newfield Exploration Company.
    \36\ Producer Coalition at 3.
    \37\ AGA Comments at 3.
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    27. In opposition to the annual reporting proposal, Morgan Stanley 
Capital Group Inc. (MSCG) contended that the Commission did not 
establish in the NOPR a clear connection between the required annual 
reporting and the statutory goal to achieve price transparency in the 
physical gas markets.\38\ For its part, MSCG asserted its confidence in 
the markets and contended it did not need the information that would be 
provided through the annual reporting requirement proposal.\39\ MSCG 
observed that the price indices are already good and are getting better 
which renders any annual reporting requirement an unnecessary 
burden.\40\ MSCG described the proposal as an ``additional regulatory 
intervention to benefit the publishers' commercial enterprise.'' \41\ 
Also in opposition, DCP Midstream LLC (DCP) objected to the annual 
reporting proposal as unnecessary given that there are other sources 
available for the information sought in the proposal.\42\
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    \38\ MSCG Comments at 7.
    \39\ Id.
    \40\ Id.
    \41\ Id.
    \42\ DCP Comments at 4-6.
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    28. Platts, a price index publisher, proposed revisions to the 
annual reporting proposal. Platts contended that as drafted the annual 
reporting proposal could provide misleading information regarding the 
universe of fixed-price transactions and create a misleading comparison 
of fixed-priced transactions and index-priced transactions.\43\ This 
problem arises, according to Platts, because the proposed definition of 
fixed-price transactions lumped together two

[[Page 1018]]

categories of fixed-price transactions: (a) Fixed-price transactions 
that are eligible for inclusion in a published price index 
(``indexable'' as described by Platts); and (b) fixed-price 
transactions that are not eligible. Without distinguishing these two 
categories, the information reported could not be used to determine the 
percentage of fixed-price transactions that are reported to price index 
publishers.\44\ Platts summarized the problem: ``the proposed reporting 
form would sweep up far more physical fixed-price deals than are 
eligible for inclusion in Platts's indices. Rather than enabling a 
comparison of apples to apples, it would compare apples and fruit 
salad.'' \45\
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    \43\ Platts Comments at 4-7.
    \44\ Id. at 5.
    \45\ Id. at 7.
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    29. To avoid this problem, Platts recommended that the Commission 
distinguish between ``transactions that are eligible to be included in 
[published price] indices and those that are not.'' \46\ In support of 
this recommendation, American Public Gas Association (APGA) advocated 
changing the survey form to obtain data to determine ``what proportion 
of reportable fixed-price transactions are actually being reported'' to 
index publishers.\47\ APGA asserted that, when survey data are 
collected, FERC should ``be able to determine once and for all whether 
the indices, on the basis of which hundreds of millions of dollars of 
natural gas are traded, are grounded in fixed-price transactions 
representing most of the fixed-price transactions being consummated in 
the market.'' \48\
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    \46\ Id. at 4.
    \47\ APGA Reply Comments at 1; see also AGA Reply Comments at 7 
(supporting ``capture'' of transactions eligible to be reported to a 
price index publisher).
    \48\ APGA Reply Comments at 3.
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    30. Platts, in its comments, also suggested that all companies--not 
just blanket certificate holders--notify the Commission annually of 
their price reporting status.\49\ Additionally, Platts suggested that 
all companies affirm that their price reporting practices comply with 
the Policy Statement procedures.\50\
---------------------------------------------------------------------------

    \49\ Platts Comments at 8.
    \50\ Id.
---------------------------------------------------------------------------

    31. Calpine Corporation (Calpine) contended that the Commission 
should avoid collection of information that is available elsewhere. As 
an example, Calpine suggested that a market participant that submits 
information on its fossil-fuel purchases to the U.S. Department of 
Energy's Energy Information Administration (EIA) not be required to 
file an annual report at the Commission.\51\
---------------------------------------------------------------------------

    \51\ Calpine Comments at 4.
---------------------------------------------------------------------------

B. De Minimis Threshold

    32. In the NOPR, the Commission proposed to define a de minimis 
market participant as a market participant that engages in physical 
natural gas transactions that amount by volume to less than 2,200,000 
MMBtus annually and to exclude such de minimis market participants from 
reporting transaction information.\52\ Several commenters sought to 
increase the de minimis threshold.\53\ MSCG supported a higher de 
minimis volume based on 200 standard futures contracts per day as a way 
to focus only on large sellers.\54\ Northwest Industrial Gas Users 
(Northwest Industrials) argued for increasing the annual volume 
threshold significantly from the proposed 2,200,000 MMBtus per year to 
136,000,000 MMBtu per year.\55\ Independent Oil & Gas Association of 
West Virginia proposed a greater de minimis threshold of 10,000,000 
MMBtu/year.\56\ A greater de minimis threshold would reduce the burden, 
it contended, for some of its small producer-members.\57\ The Wisconsin 
Companies called for a greater de minimis threshold because the 
threshold set forth in the NOPR uses ``physical volumes consumed [and, 
thus], may ignore the reality of daisy chain sales; that is, many 
transactions can occur before natural gas ultimately reaches the 
consumer.'' \58\
---------------------------------------------------------------------------

    \52\ NOPR at P 52.
    \53\ MSCG Comments at 10; Northwest Industrial Gas Users 
Comments at 7-10; Independent Oil & Gas Association of West Virginia 
at 3-4.
    \54\ MSCG Comments at 10; see also INGAA Comments at 8 
(supporting MSCG's de minimis proposal).
    \55\ Northwest Industrials at 7-10.
    \56\ West Virginia Independents Comments at 3-4.
    \57\ Id.
    \58\ Wisconsin Companies Comments at 5.
---------------------------------------------------------------------------

    33. Some commenters supported the Commission's proposed de minimis 
threshold.\59\ The Texas Alliance of Energy Producers (Texas Alliance) 
contended that the de minimis threshold for annual transaction 
reporting is reasonable.\60\ IPAA advocated setting the de minimis 
threshold as a function of the market size rather than setting it as a 
fixed number.\61\
---------------------------------------------------------------------------

    \59\ See, e.g., APGA Comments at 10.
    \60\ Texas Alliance Comments at 12.
    \61\ IPAA Comments at 3-4.
---------------------------------------------------------------------------

    34. The Interstate Natural Gas Association of America (INGAA) 
sought clarification that a de minimis market participant need only 
file basic identification and whether it reports transactions to index 
price publishers.\62\
---------------------------------------------------------------------------

    \62\ INGAA Comments at 8.
---------------------------------------------------------------------------

C. Exclusion of Certain Transactions

    35. Commenters sought to exclude certain transactions from the 
reporting requirement. INGAA sought to exclude interstate pipeline 
transactions associated with cash-out and operations because such 
information is already reported by some in Form No. 2 and on electronic 
bulletin board (EBB) postings and because such operational transactions 
would only distort assessment of the quantity of gas available for 
trading in the interstate market.\63\ The Oklahoma Independent 
Petroleum Association (Oklahoma IPA) sought to exclude transactions 
priced pursuant to a ``percentage of proceeds'' contract under which a 
producer is required to sell any gas produced and receive the 
percentage of proceeds realized by the buyer.\64\ Oklahoma IPA argued 
that sellers of such contracts have no influence on the price for the 
sale of gas.\65\ Along those lines, Oklahoma IPA argued that the de 
minimis threshold is too low.\66\
---------------------------------------------------------------------------

    \63\ Id. at 9.
    \64\ Oklahoma IPA Comments at 3.
    \65\ Id. at 3; see also Hess Corporation Comments at 4-6.
    \66\ Oklahoma IPA Comments at 3.
---------------------------------------------------------------------------

    36. Shell sought to exclude reporting transactions that are related 
to operational functions and transactions between affiliates.\67\ As 
transactions related to operational functions, Shell included imbalance 
make-up, royalty-in-kind payments, gas provided for processing such as 
plant thermal reduction (shrinkage), and purchases and sales related to 
the production and gathering function.\68\ Such transactions, Shell 
contended, are not part of the wholesale market and their reporting 
would not provide a meaningful benefit.\69\ As to affiliate 
transactions, Shell noted that the Commission's Policy Statement 
excludes transactions between affiliate companies.\70\
---------------------------------------------------------------------------

    \67\ Shell Comments at 8.
    \68\ Id.
    \69\ Id. at 8-9.
    \70\ Id. at 9 (citing Price Discovery in Natural Gas and 
Electric Markets, Policy Statement on Natural Gas and Electric Price 
Indices, 104 FERC ] 61,121 (2003) (Policy Statement)).
---------------------------------------------------------------------------

    37. MSCG supported the exclusion of financially settled 
transactions from the proposed reports, claiming that the Commission 
lacks jurisdiction over natural gas futures contracts that are not 
settled through physical delivery.\71\ Further, MSCG asserted that the 
Commission's memorandum of understanding with the Commodity Futures 
Trading Commission could facilitate obtaining such information.\72\
---------------------------------------------------------------------------

    \71\ MSCG Comments at 8.
    \72\ Id.

---------------------------------------------------------------------------

[[Page 1019]]

    38. The Natural Gas Supply Association (NGSA) sought clarification 
that a market participant did not need to report the following 
transactions: (1) liquefied natural gas (LNG) import transactions prior 
to regasification; (2) natural gas exports from LNG liquefaction 
facilities; (3) transactions related to export for re-import; (4) 
transactions among affiliates; (5) sales and purchases in Alaska; and 
(6) sales to or purchases by an end-user.\73\
---------------------------------------------------------------------------

    \73\ NGSA Comments at 15.
---------------------------------------------------------------------------

    39. Several commenters sought to exclude retail transactions 
involving end-use customers from reporting. In its reply comments, the 
American Forest & Paper Association contended that end-use customers 
should not be required to report end-use purchases because end-use 
purchases do not play a role in setting index prices.\74\ NGSA sought 
clarification that the Commission did not intend to require the 
reporting of non-wholesale transactions in the annual report.\75\ NGSA 
contended that the Commission must limit reporting to wholesale 
transactions made in interstate commerce because section 23 of the 
Natural Gas Act limits the information the Commission may obtain to 
wholesale transactions in interstate commerce.\76\
---------------------------------------------------------------------------

    \74\ AF&PA Comments at 5-7; see also NGSA Comments at 12-14; 
Industrial Energy Consumers of America Comments at 3.
    \75\ NGSA Comments at 14.
    \76\ NGSA Comments at 12; see also Honeywell Reply Comments at 
2.
---------------------------------------------------------------------------

    40. AGA called for the Commission to exclude reporting of retail 
sales or volumes transported for others under retail choice 
programs.\77\ The National Energy Marketers Association (NEM) requested 
that retail transactions be exempt from any reporting requirement.\78\
---------------------------------------------------------------------------

    \77\ AGA Comments at 3.
    \78\ NEM Comments at 4-7.
---------------------------------------------------------------------------

    41. EnCana Marketing seeks clarification that the reporting 
requirement only applies to transactions in the United States.\79\
---------------------------------------------------------------------------

    \79\ EnCana Marketing Comments at 5.
---------------------------------------------------------------------------

D. Mandatory Reporting of Fixed-Price Transactions to Publishers

    42. Some commenters advocated for the Commission to use its 
transparency authority to require mandatory reporting of fixed-price 
transactions directly to price index publishers or indirectly to them 
through the Commission. APGA sees the annual reporting proposal set 
forth in the NOPR ``as an important first step in the journey towards 
full transparency in the physical market,'' but stated that the 
Commission should go further and seek mandatory reporting of fixed-
price transactions.\80\
---------------------------------------------------------------------------

    \80\ APGA Comments at 5-8.
---------------------------------------------------------------------------

    43. In contrast, other commenters objected to any mandatory 
reporting of fixed-price transactions.\81\ For instance, concurring 
with the Commission's reasoning set forth in the NOPR, the NEM opposed 
mandatory reporting, saying that voluntary reporting with a safe harbor 
for a good-faith effort is sufficient.\82\
---------------------------------------------------------------------------

    \81\ Platts also supports FERC's ``continued reliance on 
voluntary price reporting.'' Platts Comments at 2; see also Electric 
Energy Institute (EEI) and the Alliance of Energy Suppliers Reply 
Comments at 3; ONEOK Energy Services Co. L.P. Comments at 3.
    \82\ NEM Comments at 2-3.
---------------------------------------------------------------------------

E. Purchases and Sales

    44. Several commenters objected to reporting of information 
regarding purchases. Several parties asserted that double-counting 
would result from the inclusion of purchases and sales.\83\ EnCana 
Marketing (USA) Inc. (EnCana Marketing) called for reporting on only 
sales of natural gas and not for purchases.\84\ EnCana Marketing 
asserted there is no value in reporting purchases ``other than to 
enlarge the universe of market participants obligated to undertake the 
new reporting requirement.'' \85\
---------------------------------------------------------------------------

    \83\ See, e.g., Northwest Industrials Reply Comments at 4.
    \84\ EnCana Marketing at 8-9.
    \85\ Id. at 9.
---------------------------------------------------------------------------

    45. MSCG stated that the Commission should require the reporting of 
only sales, not purchases, contending that requiring buyers to report 
purchases would be overreaching.\86\ The Texas Alliance contended it 
would be more efficient to require only the purchaser and/or recipient 
of gas from producers to file a report.\87\
---------------------------------------------------------------------------

    \86\ MSCG Comments at 9.
    \87\ Texas Alliance Comments at 12.
---------------------------------------------------------------------------

F. Frequency of Reporting

    46. Several commenters support reporting no more frequently than 
annually. EnCana Marketing contended that reporting more frequently 
than annually would be burdensome while not providing a significant 
benefit.\88\ MSCG contended that any reporting should be annual, unless 
a clear connection can be established that more frequent reporting 
results in greater transparency.\89\ In contrast, the National 
Association of Royalty Owners (NARO) favored monthly transaction 
reporting rather than just annual reporting; it stated that monthly as 
well as regional reporting would be more useful to royalty owners, 
including for the monitoring of price index reliability.\90\
---------------------------------------------------------------------------

    \88\ EnCana Marketing Comments at 10.
    \89\ MSCG Comments at 9.
    \90\ NARO Comments at 4; see also Mewbourne Oil Company Comments 
at 5.
---------------------------------------------------------------------------

G. Codification of Price Index Policy

    47. In the NOPR, the Commission sought comment on whether to codify 
the price index policy standards into the regulations. The regulations 
describe the price index policy standards by reference to the Policy 
Statement.\91\ NARO supported codification of the price index policy 
standards because the enforcement power of the Commission is necessary 
to protect the integrity of the data.\92\ MSCG opposed such 
codification.\93\
---------------------------------------------------------------------------

    \91\ Title 18 of the CFR, section 284.403(a) reads, in relevant 
part:
    ``To the extent Seller engages in reporting of transactions to 
publishers of electricity or natural gas indices, Seller shall 
provide accurate and factual information, and not knowingly submit 
false or misleading information or omit material information to any 
such publisher, by reporting its transactions in a manner consistent 
with the procedures set forth in the Policy Statement on Natural Gas 
and Electric Price Indices, issued by the Commission in Docket No. 
PL03-3-000 and any clarifications thereto.''
    See also 18 CFR 284.288(a) (identical language).
    \92\ NARO Comments at 5; see also MidAmerican Comments at 10.
    \93\ MSCG Comments at 12.
---------------------------------------------------------------------------

H. Aggregation of Data

    48. The Wisconsin Companies call for the discretion to submit 
separate reports because ``[a] requirement for [combination utilities] 
to submit a single annual report is problematic in that the separation 
of these business units currently prevents the sharing of market 
information that would be relevant to the reporting requirements.'' 
\94\
---------------------------------------------------------------------------

    \94\ Wisconsin Companies Comments at 6.
---------------------------------------------------------------------------

    49. The Electric Power Supply Association (EPSA) called for 
companies to have the option to file either aggregated data for all its 
affiliate companies that buy and sell natural gas or individual reports 
for each entity that buys or sells gas.\95\ Similarly, Calpine 
Corporation called for the Commission to allow companies to aggregate 
data from subsidiaries in order to reduce the burden on industry and to 
provide the benefit of eliminating double-counting of intracompany 
transactions.\96\
---------------------------------------------------------------------------

    \95\ EPSA Comments at 7-8.
    \96\ Calpine Comments at 4-5.
---------------------------------------------------------------------------

    50. NGSA wanted clarification that the annual transaction report, 
with a few exceptions, applies to all nonaffiliated third parties, and 
one report can be filed on behalf of all entities in a corporate 
family.\97\ NGSA advocated exclusion of sales between affiliates 
because such information

[[Page 1020]]

would not be meaningful.\98\ NGSA contended that such exclusion is 
consistent with the price index reporting standards set forth in the 
Policy Statement, which ``prohibit the reporting of sales between 
affiliates to price index developers.'' \99\
---------------------------------------------------------------------------

    \97\ NGSA Comments at 15.
    \98\ Id.
    \99\ NGSA Reply Comments at 4.
---------------------------------------------------------------------------

    51. On a similar issue, AGA and Duke Energy Ohio, Inc. sought 
clarification on the reporting obligations of asset managers.\100\
---------------------------------------------------------------------------

    \100\ AGA Comments at 3; Duke Energy Ohio, Inc. Comments at 8-9.
---------------------------------------------------------------------------

I. Public Filing

    52. Several commenters supported maintaining as non-public any 
aggregated transaction data to be filed.\101\ NGSA contended that ``the 
annual aggregated transactional information could cause competitive 
harm to the market by potentially revealing corporate proprietary 
trading strategies of a company particularly [if it has] geographically 
concentrated trading or supply portfolios.'' \102\ Pacific Gas & 
Electric (PG&E) contended that data filed by market participants should 
be maintained as non-public for one year following the calendar year 
for which the data pertain to avoid revealing competitive buying 
strategies.\103\ Enbridge contended that each entity should have the 
option to file information non-publicly.\104\
---------------------------------------------------------------------------

    \101\ Nicor Gas Company Comments at 6; Statoil Natural Gas LLC 
Comments at 5; PG&E Comments at 6; NGSA Reply Comments at 2.
    \102\ NGSA Reply Comments at 2.
    \103\ PG&E Comments at 6.
    \104\ Enbridge Comments at 26.
---------------------------------------------------------------------------

    53. NGSA advocated that any reporting be non-public. NGSA argued 
that even ``annual aggregated transactional information could cause 
competitive harm to the market by potentially revealing corporate 
proprietary trading strategies of a company, particularly for companies 
with geographically concentrated trading or supply portfolios.'' \105\ 
NGSA explained that making public ``the percentage of a company's 
portfolio that is index-based or fixed-price-based and the percentage 
of natural gas sold in the monthly and daily markets'' would reveal the 
company's ``procurement strategy and risk profile,'' thus reducing its 
competitiveness in future deals.\106\ To address this concern, NGSA 
suggested not publicly disclosing the individual company filings or 
``redacting the identity of the market participant making the filing.'' 
\107\
---------------------------------------------------------------------------

    \105\ NGSA Comments at 2.
    \106\ Id.
    \107\ Id.
---------------------------------------------------------------------------

J. Filing Date

    54. In the NOPR, the Commission proposed an annual filing deadline 
of February 15 and asked for comment on whether this deadline would be 
unduly burdensome.\108\ MSCG and Statoil called for a deadline of April 
30.\109\ AGA recommended a filing date of May 1.\110\ NGSA recommended 
a filing date of either May 1 or April 18, which is the filing deadline 
of FERC Form No. 2.\111\
---------------------------------------------------------------------------

    \108\ NOPR at P 68.
    \109\ MSCG Comments at 9; Statoil Comments at 6-7.
    \110\ AGA Comments at 4.
    \111\ NGSA Comments at 15-16.
---------------------------------------------------------------------------

K. Safe Harbor

    55. Several commenters requested that the Commission adopt a safe 
harbor for good faith compliance with the reporting obligation.\112\ 
The Commission should state, according to AGA, that it will not 
``prosecute, penalize or otherwise impose remedies on parties for 
inadvertent errors in * * * reporting.'' \113\
---------------------------------------------------------------------------

    \112\ AGA Comments at 6-7; NGSA Comments at 16-17; PG&E Comments 
at 6; Suez Energy North America, Inc. Comments at 10-12.
    \113\ AGA Comments at 7.
---------------------------------------------------------------------------

L. Information Collection Burden

    56. NEM and Sequent Energy Management, L.P. (Sequent) stated that 
the Commission significantly underestimated in the NOPR the cost burden 
imposed by the annual reporting proposal.\114\ NEM stated an estimate 
that it would take approximately 200 hours annually to comply with the 
reporting requirement.\115\ NEM explained that because market 
participants' data is not currently stored in a format that could be 
used to fill out the proposed form, market participants would need to 
develop ancillary information technology systems to store such data at 
significant cost.\116\ NEM also stated that although the proposal would 
require annual reporting, data collection would be needed daily, which 
would be costly.\117\ Sequent pointed out that the Commission estimate 
overlooks the costs of legal and regulatory compliance for each annual 
report.\118\ Sequent also stated that the cost burden estimate ignores 
asset management arrangements because an annual reporting requirement 
would trigger renegotiation of those asset management contracts.\119\
---------------------------------------------------------------------------

    \114\ NEM Comments at 7; Sequent Comments at 6-7.
    \115\ NEM Comments at 8.
    \116\ NEM Comments at 7.
    \117\ NEM Comments at 8.
    \118\ Sequent Comments at 7.
    \119\ Sequent Comments at 7.
---------------------------------------------------------------------------

V. Commission Determination

    57. On the basis of the comments, the Commission has determined to 
adopt in large part the proposed annual reporting of certain natural 
gas transaction information, but to modify its proposal in several 
ways. Specifically, the Commission adopts rules here to require certain 
market participants to report annually information about their 
wholesale, physical natural gas transactions delivered in the previous 
calendar year in the United States of America on a form, Form No. 
552.\120\ For purposes of the annual reporting requirement, a market 
participant is defined as ``any buyer or seller that engaged in 
wholesale, physical natural gas transactions in the previous calendar 
year.'' \121\ Specifically, on Form No. 552, a market participant must 
provide the Commission with contact information and answer questions 
about whether it sells pursuant to a blanket sales certificate and 
whether it reports to price index publishers. A market participant that 
sold or purchased more than a specified de minimis volume of natural 
gas during the previous calendar year, regardless of whether it holds a 
blanket sales certificate, must also provide the following information:
---------------------------------------------------------------------------

    \120\ As we stated in the NOPR, although the standard contract 
for the most significant natural gas futures market traded on the 
New York Mercantile Exchange (NYMEX) requires physical delivery, the 
vast majority of those transactions do not go to delivery. For the 
purposes of the reporting requirement, the Commission excludes 
volumes of futures transactions from reporting.
    \121\ New 18 CFR 284.401(b).
---------------------------------------------------------------------------

    a. The total volume of transactions for the previous calendar year;
    b. The volume of transactions that were priced at fixed prices for 
next-day delivery and were reportable to price index publishers;
    c. The volume of transactions priced by reference to next-day gas 
price indices;
    d. The volume of transactions that were priced at fixed prices for 
next-month delivery and were reportable to price index publishers; and,
    e. The volume of transactions priced by reference to next-month gas 
price indices.
    58. The final rule will also require a market participant to report 
whether it operated under a blanket sales certificate under the 
Commission's regulations, Sec.  284.402 or Sec.  284.284. This 
information will allow the Commission to measure overall market 
activity of the entities subject to its jurisdiction under the Natural 
Gas Act as well as allow the Commission to maintain records of such 
entities. The final rule will require a market participant to indicate 
whether it

[[Page 1021]]

reports transactions to any price index publishers, and, if so, whether 
their reporting conforms to the standards set forth in Sec.  248.403 or 
Sec.  248.288, as applicable. This information will allow the 
Commission to ensure the accuracy of price indices and to monitor 
adherence to the Commission's transaction reporting standards.
    59. The final rule retains several of the specific proposals 
presented in the NOPR: the de minimis threshold is to remain the same; 
all filings are to be made public; both purchases and sales are to be 
reported; and the filing will be annual.
    60. The final rule makes several changes to the proposal in the 
NOPR. They include the following:
    a. Reporting will be limited to buyers and sellers only of 
wholesale natural gas delivered in the United States, i.e., it excludes 
sales to end-users.
    b. All wholesale buyers and sellers of natural gas operating under 
a blanket sales certificate and all others buying or selling more than 
the de minimis volume must provide contact information, indicate 
whether they are operating under a blanket sales certificate, and 
whether they report prices to an index publisher. In the NOPR, the 
Commission did not propose asking wholesale buyers and sellers that are 
not operating under a blanket sales certificate whether they report 
prices to index publishers.
    c. A company with multiple affiliates may choose to report 
separately or in aggregate, as best meets its needs. In the NOPR, we 
assumed that reporting would be by affiliate or subsidiary.
    d. The questions on the form now request data relating to 
transactions with expected deliveries in the reporting year, rather 
than transaction dates.
    e. The form no longer requests the number of transactions.
    f. The definitions of fixed-price transactions in the form have 
been changed to tie more directly to those volumes that could be 
reported to index providers. To clarify those terms, the Commission 
will establish a web site defining reportable locations previous to 
each reporting year, and providing links to active index publishers and 
their reporting definitions.
    61. The final rule includes further instructions regarding certain 
specific categories of reportable and non-reportable transactions. The 
final rule also discusses some general issues raised by commenters 
including safe harbor provisions, mandatory reporting of fixed-price 
transactions to price index publishers, and possible effects of the 
rule on price index publishers.
    62. By obtaining the volume of transactions conducted for each 
significant market participant, the Commission, market participants and 
others will be able to determine the overall level of activity of 
market participants in the physical natural gas market. In particular, 
the information will provide regularly an estimate of (a) the size of 
the physical U.S. domestic natural gas market, (b) the use of index 
pricing in that market, (c) the size of the fixed-price trading market 
that produces price indices, and (d) the relative sizes of major 
traders.
    63. This information will improve the understanding of index 
pricing by interested entities, including the market participants and 
state commissions who use them. The volume break-down of transactions 
by price type, fixed-price or index-price, should permit an overall 
assessment of the ratio of index-using transactions to price-forming 
transactions, i.e., fixed-price transactions. At present, we do not 
know how much fixed-price transactions are a part of the universe of 
natural gas transactions, although they may be the minority of natural 
gas transactions.\122\ The Commission has taken several steps to 
restore confidence in natural gas index prices and their formation. By 
obtaining information regarding the extent that market participants 
make fixed-price transactions, market participants will be able to 
evaluate their confidence in the index prices that are formed by those 
fixed-price transactions.
---------------------------------------------------------------------------

    \122\ Tr. at 32 (Comments of Ms. Jane Lewis-Raymond, American 
Gas Association) (surmising that we currently cannot know the amount 
of fixed-price transactions and the amount of fixed-price trades 
that make up an index).
---------------------------------------------------------------------------

    64. By collecting sales and purchases information, results may also 
be cross-checked to ensure that information is accurate. In effect, 
total sales should roughly equal total purchases, with some allowance 
for de minimis buyers and sellers.

A. Definitions

    65. Definitions used in this final rule for development of Form No. 
552 include the following:
    a. Affiliate--An affiliate means a person who controls, is 
controlled by or is under common control with, another person.\123\
---------------------------------------------------------------------------

    \123\ A market participant has the option of including an 
affiliate's information in its reporting on Form No. 552. This is a 
matter of convenience for companies subject to the final rule. Their 
affiliations are irrelevant to whether they are required to report 
under the final rule. If they satisfy the criteria of a reporting 
market participant, they must report. Therefore, the Commission 
intends to allow market participants to determine whether their 
relationships permit one company to report on behalf of another 
company. Accordingly, the definitions of ``affiliate'' used 
elsewhere in the Commission's regulations, e.g., in Part 358, are 
not germane.
---------------------------------------------------------------------------

    b. Fixed Price--A ``Physical Natural Gas'' price determined by 
agreement between buyer and seller and not benchmarked to any other 
source of information. For example, Physical Basis transactions that 
refer directly to futures prices, for the purpose of this form, are not 
``Fixed Price'' transactions.
    c. Next-Day Delivery--Delivery of a transaction executed prior to 
NAESB nomination deadline (11:30 am Central Prevailing Time) on one day 
for uniform physical delivery over the next pipeline day. Transactions 
done for Friday are usually for flow on Saturday, Sunday, and Monday 
inclusive. Trading patterns may vary in the case of holidays or the end 
of a month that occurs on a weekend. Commission Staff will maintain 
links to price index publishers' descriptions of their processes for 
receiving price information and publishing indices on the ferc.gov Web 
site at http://www.ferc.gov/docs-filing/eforms.asp#552.

    d. Next-Month Delivery--Delivery of a transaction executed during 
the last five (5) business days of one month for uniform physical 
delivery over the next month.
    e. Physical Natural Gas--Natural gas transactions that contain an 
obligation to deliver natural gas at a specified location and at a 
specified time, with the exception of physically-delivered futures 
contracts. It is not necessary that natural gas actually be delivered 
under the transactions, only that the delivery obligation existed in 
the agreement when executed. Certain Physical Natural Gas transactions 
may not remain in existence through the time of delivery because they 
were traded away or ``booked out.'' For purposes of this form, these 
transactions should be included whether they went to delivery or not. 
The only exception, notwithstanding its delivery obligation, is futures 
contracts traded on the New York Mercantile Exchange which should not 
be reported in this form.
    f. Price Index Publisher--Companies that report price indices for 
U.S. wholesale natural gas markets. The list of companies can change 
over time. Commission Staff will maintain a list of relevant ``Price 
Index Publishers'' with links to their descriptions of their processes 
for receiving price information and publishing indices on the ferc.gov 
Web site at http://www.ferc.gov/docs-filing/eforms.asp#552.


[[Page 1022]]

    g. Prices that Refer to (Daily or Monthly) Price Indices--Prices 
for ``Wholesale Natural Gas Purchases'' or ``Sales'' that reference 
directly a daily or monthly index price published by a ``Price Index 
Publisher'' rather than a ``Fixed Price'' or a price that refers 
directly to some other benchmark.
    h. Quantity--Amount of purchases or sales expressed in units of 
energy ``British Thermal Units'' (Btu). One million BTUs (MMBtu) are, 
by definition, the same as one Dekatherm (Dth). A volume of one billion 
cubic feet (Bcf) of natural gas contains approximately one trillion 
Btus (TBtu or million MMBtu) of energy depending on the exact energy 
content of the natural gas. The quantities to be reported in the 
``Purchase and Sales Information'' schedule should be measured in 
TBtus.
    i. Reportable Locations--Those locations (hubs, pipelines, regions, 
etc.) where ``Price Index Publishers'' collect ``Fixed Price'' 
information for transactions with ``Next-Day'' or ``Next-Month 
Delivery'' obligations, and produce index prices. These locations may 
change over time. Commission Staff will maintain a list of current 
``Reportable Locations'' with links to ``Price Index Publishers'' 
descriptions of their processes for receiving price information and 
publishing indices on the ferc.gov Web site at http://www.ferc.gov/docs-filing/eforms.asp#552
.

    j. Reporting Company--The person, corporation, licensee, agency, 
authority, or other legal entity or instrumentality on whose behalf the 
report is being submitted by the ``Respondent.''
    k. Respondent--The person, corporation, licensee, agency, 
authority, or other legal entity or instrumentality that is submitting 
the report either on its own behalf, or on behalf of itself and/or its 
affiliates. A Respondent may choose to either report for all its 
affiliates collectively, or may choose to have each of its affiliates 
report separately as their own ``Respondent.'' If reporting 
collectively, the reporting ``Respondent'' must report for each 
``Affiliate'' in the ``Schedule of Reporting Companies'' and the 
``Price Index Reporting Schedule,'' and collectively for all its 
affiliates in the ``Purchase and Sales Information'' schedule.
    l. Wholesale Natural Gas Purchases--The ``Quantity'' of ``Physical 
Natural Gas'' purchased by the ``Reporting Company'' during the ``Year 
of Report,'' with the exception of certain futures contracts.
    m. Wholesale Natural Gas Sales--The ``Quantity'' of ``Physical 
Natural Gas'' sold by the ``Reporting Company'' during the ``Year of 
Report'' to customers that do not use all the natural gas they buy 
themselves under contracts with physical delivery obligations, with the 
exception of physically-delivered futures contracts.

B. Facilitating Price Transparency

    66. The annual reporting requirement will make the price formation 
process more transparent and aid the Commission's efforts to monitor 
price indices and the integrity of wholesale natural gas markets. These 
efforts follow the directive of Congress in the transparency provisions 
to facilitate price transparency ``having due regard for the public 
interest, the integrity of [the physical natural gas] markets, [and] 
fair competition.'' \124\ By monitoring and reporting on price indices 
and their influence over wholesale natural gas pricing in the United 
States, the Commission ensures that market participants can have 
confidence in the oversight of published price indices, a basic 
building block of price formation. We reiterate that, without 
confidence in the basic processes of price formation, market 
participants cannot have faith in the value of their transactions, the 
public cannot believe that the prices they see are fair, and it is more 
difficult for the Commission to ensure that jurisdictional prices are 
``just and reasonable.'' \125\
---------------------------------------------------------------------------

    \124\ Section 23(a)(1) of the Natural Gas Act, 15 U.S.C. 717t-
2(a)(1) (2000 & Supp. V 2005).
    \125\ See sections 4 and 5 of the Natural Gas Act, 15 U.S.C. 
717c & 717d.
---------------------------------------------------------------------------

    67. The information gained from the annual reporting requirement 
will make the price formation process more transparent by providing a 
better understanding of the size of the physical natural gas market, 
the use of fixed and indexed prices in that market, and the formation 
of price indices. The information collected under this requirement is 
focused specifically on daily and monthly physical spot or ``cash'' 
market activity and the contracting based on the prices developed in 
those markets. The requirement will not create additional information 
concerning other types of wholesale natural gas contracting practices 
in the United States, such as long-term, fixed-price transactions, 
swaps and other financially-settled transactions and futures. Better 
understanding of the role and functioning of wholesale natural gas spot 
markets can increase confidence that posted market prices of natural 
gas accurately reflect the interplay of legitimate market forces.
    68. In promulgating these regulations to improve the transparency 
of the natural gas markets, the Commission exercises its authority 
under the transparency provisions. Under the Natural Gas Act,\126\ the 
Commission has long borne a responsibility to protect wholesale 
electric and natural gas customers.\127\ The transparency provisions of 
EPAct 2005 added new authority for protecting the integrity of the 
markets themselves as a way of protecting customers in an active market 
environment.\128\ As discussed above, Congress's grant of transparency 
authority followed the Commission's earlier efforts at monitoring the 
price formation process.\129\ Congress recognized that the Commission 
might need expanded authority to mandate additional reporting to 
improve market confidence through greater price transparency and 
included in EPAct 2005 authority for the Commission to obtain 
information on the availability and prices of sales of wholesale 
natural gas.
---------------------------------------------------------------------------

    \126\ 15 U.S.C. 717 et seq.
    \127\ See sections 4 and 5 of the Natural Gas Act, 15 U.S.C. 
717c, 717d; sections 205 and 206 of the Federal Power Act, 16 U.S.C. 
824d, 824e.
    \128\ See section 23(a)(1) of the Natural Gas Act, 15 U.S.C. 
717t-2(a)(1) (2000 & Supp. V 2005).
    \129\ See, supra, at P 11.
---------------------------------------------------------------------------

    69. Pursuant to this grant of authority, the final rule continues 
the Commission's efforts to monitor price index formation and to 
increase transparency of the price formation process, and, thus, 
protect the integrity of the physical natural gas markets. The final 
rule increases transparency by allowing, for the first time, the 
Commission and other market observers to determine an annual estimate 
of (a) the size of the physical domestic natural gas market, (b) the 
use of index pricing in that market, (c) the size of the fixed-price 
trading market that produces price indices from the subset reported to 
index publishers, and (d) the relative size of major traders.
    70. The information to be reported in the annual reporting 
requirement falls well within the Commission's transparency authority. 
In section 23 of the Natural Gas Act, Congress provided the Commission 
a broad grant of authority to obtain and disseminate ``information 
about the availability and prices of natural gas sold at wholesale and 
in interstate commerce.'' \130\ Information about the volume of 
wholesale, physical gas transactions and about the type of pricing used 
for those transactions is ``information about the availability and 
prices of natural gas

[[Page 1023]]

sold at wholesale and in interstate commerce.'' \131\
---------------------------------------------------------------------------

    \130\ Section 23(a)(1) of the Natural Gas Act; 15 U.S.C. 717t-
2(a)(1) (2000 & Supp. V 2005).
    \131\ Id.
---------------------------------------------------------------------------

    71. The information sought in the final rule is not obtainable 
elsewhere. Section 23(a)(4) of the Natural Gas Act requires the 
Commission to ``consider the degree of price transparency provided by 
existing price publishers and providers of trade processing services * 
* *.'' \132\ As we stated in the NOPR, because of the way transactions 
currently take place in the natural gas industry, there is no way to 
estimate in even the grossest terms the overall size of the natural gas 
market or its breakdown by types of contract provision, including 
pricing (fixed prices or prices using or referring to price indices) 
and term (e.g., spot transactions for next-day or next-month delivery 
or forward transactions for longer-term delivery).\133\ Further, 
currently there is no way to determine important volumetric 
relationships between the fixed-price, day-ahead or month-ahead 
transactions that form price indices or to determine the use of price 
indices themselves.
---------------------------------------------------------------------------

    \132\ Section 23(a)(4) of the Natural Gas Act; 15 U.S.C. 717t-
2(a)(4) (2000 & Supp. V 2005).
    \133\ NOPR at 50 (``As noted by the price index developer 
Platt's, the question of what is the total size of the traded market 
has `hung over the gas market for years.' '') (citing Comments of 
Platts at 6, Transparency Provisions of the Energy Policy Act, 
Docket No. AD06-11-000 (filed Nov. 1, 2006)).
---------------------------------------------------------------------------

    72. In comments on the NOPR, no commenter pointed to a source for 
similar information. DCP contended that ``the information that is 
available through the price index publishers is the same information 
that is being requested [in the annual reporting proposal] and it is 
the actual data that makes up the index prices that represent the price 
of natural gas on any given day at any given location.'' \134\ The 
information to be reported on Form No. 552 is not the same. The 
information to be reported will include information regarding 
transactions that could be (i.e., are qualified to be) but are not 
reported to price index publishers, therefore, such information is not 
available from price index publishers. The amount of market activity 
that could form price indices as opposed to the amount that actually 
does form price indices is an important fact that has been missing in 
the discussion of the Commission's market price policies, leading to 
confusion and undermining confidence in indices.
---------------------------------------------------------------------------

    \134\ DCP Comments at 5.
---------------------------------------------------------------------------

    73. Further, the Commission's goal is not only to understand the 
transactions used to formulate price indices; it is to understand how 
influential price indices are in the overall transacting of natural gas 
in U.S. wholesale markets. The information to be reported on Form No. 
552 will allow market participants to evaluate their use of indexed 
transactions. Typically, market participants rely on index-priced 
transactions as a way to reference market prices without taking on the 
risks of active trading. These market participants rely on index 
prices, often whether or not those prices are derived from a robust 
market of fixed-price transactions. Such information is not available 
elsewhere.
    74. Also, the annual reporting requirements will allow the 
Commission, market participants and the public to estimate the amount 
of activity of significant wholesale traders relative to the overall 
market. Information on significant traders' activity allows the 
Commission and the public to understand the impact of the largest 
traders on the price formation process, improving natural gas market 
transparency.
    75. The Commission directs Staff to monitor the information 
received in the filings of Form No. 552, to determine whether the 
information received meets the goals set forth in this preamble. 
Although in future years the Commission Staff may change the reportable 
locations and may change the format of Form No. 552 in order to make 
the form easier to complete and to make the information submitted 
easier to analyze, the substance of Form No. 552 will remain the same 
absent Commission action.

C. Reporting Requirements Retained From the Notice of Proposed 
Rulemaking

    76. The final rule retains several of the features of the annual 
reporting proposal presented in the NOPR: (1) The de minimis threshold 
remains the same; (2) all filings are to be made publicly; (3) both 
purchases and sales are to be reported; and (4) the form is to be 
submitted annually.
1. De Minimis Threshold
    77. In the final rule, the Commission retains the volumetric de 
minimis threshold proposed in the NOPR and clarifies its 
application.\135\ A market participant is required to report its 
transactions annually if it engages either in wholesale sales that 
amount to 2,200,000 MMBtus or more or wholesale purchases that amount 
to 2,200,000 MMBtus or more. Each market participant operating under a 
blanket certificate under Sec.  284.284 or Sec.  284.402 must file a 
Form No. 552. However, if a market participant operating under a 
blanket certificate under Sec.  284.284 or Sec.  284.402 buys or sells 
less than the de minimis volumes in the reporting year, it is not 
required to provide information about the volumes of its transactions. 
A market participant that does not operate under a blanket certificate 
under Sec.  284.284 or Sec.  284.402, and that buys or sells less than 
the de minimis volumes in the reporting year, is not required to file a 
Form No. 552. The creation here of a de minimis threshold is consistent 
with the transparency provisions. Notwithstanding Congress's broadening 
of the scope of the Commission's jurisdiction in new section 23 of the 
Natural Gas Act with respect to transparency, Congress mandated that 
the Commission exempt ``natural gas producers, processors or users who 
have a de minimis market presence [from compliance] with the reporting 
requirements of this section.'' \136\
---------------------------------------------------------------------------

    \135\ New 18 CFR 284.401(a) (defining de minimis market 
participant). The regulations define a market participant as ``any 
buyer or seller that engaged in physical natural gas transactions 
for the previous calendar year.'' New 18 CFR 284.401(b).
    \136\ Section 23(d)(2) of the Natural Gas Act, 15 U.S.C. 717t-2 
(2000 & Supp. V 2005).
---------------------------------------------------------------------------

    78. In proposing in the NOPR a de minimis threshold for reporting 
which would apply to market participants, the Commission sought to 
require reporting from a sufficient number of significant market 
participants to ensure, in the aggregate, an accurate picture of the 
physical natural gas market as a whole. To this end, the Commission 
proposed in the NOPR to define such a de minimis market participant as 
a market participant that engages in physical natural gas transactions 
that amount by volume to less than 2,200,000 MMBtus annually.\137\ This 
figure was based on the simple calculation of one-ten thousandth (1/
10,000th) of the annual physical volumes consumed in the United States, 
which is approximately 22 trillion cubic feet (Tcf) (or roughly 22 
billion MMBtus).\138\ Looked at another way, a de minimis market 
participant would trade the equivalent of less than one standard NYMEX 
futures contract per day. Although a market participant that contracts 
for 1/10,000th of the nation's annual physical volume may appear to 
have little effect on natural gas prices, that participant may be 
transacting only at one location and, thus, have a much greater pricing 
effect there. In the NOPR, we indicated that we do not expect annual 
physical

[[Page 1024]]

volumes consumed in the United States to remain constant, however the 
figure of 22 Tcf was a useful snapshot of consumption and a useful 
starting-point for setting the de minimis exemption.
---------------------------------------------------------------------------

    \137\ New 18 CFR 260.401.
    \138\ U.S. Department of Energy, Energy Information 
Administration, Natural Gas Summary, Data Series: Total Consumption, 
2006, http://tonto.eia.doe.gov/dnav/ng/ng_sum_lsum_dcu_nus_a.htm
.

---------------------------------------------------------------------------

    79. As requested by INGAA, the Commission clarifies that each 
market participant that (a) either holds a blanket certificate under 
Sec.  284.284 or Sec.  284.402, or (b) buys or sells more than the de 
minimis volumes in the reporting year must report: identification 
information; whether it holds a blanket certificate under Sec.  284.284 
or Sec.  284.402; whether it reports transactions to price index 
publishers, and, if so, whether its reporting conforms to the 
applicable regulations. A market participant that holds a blanket 
certificate under Sec.  284.284 or Sec.  284.402 but that buys or sells 
less than the de minimis volumes in the reporting year must complete 
the form except it need not report its volumes.
    80. Several commenters, including MSCG,\139\ Northwest Industrial 
Gas Users,\140\ and the Independent Oil & Gas Association of West 
Virginia,\141\ proposed greater de minimis thresholds. Other 
commenters, including the Texas Alliance,\142\ supported the proposed 
threshold. No commenter suggested a lesser threshold. The proposed 
threshold is small enough to allow the Commission to accurately 
determine the size of the physical natural gas market, while at the 
same time, large enough to exclude market participants, who in the 
aggregate, do not contribute significantly to that market.
---------------------------------------------------------------------------

    \139\ MSCG Comments at 10.
    \140\ Northwest Industrial Gas Users Comments at 7-10.
    \141\ Independent Oil & Gas Association of West Virginia 
Comments at 3-4.
    \142\ Texas Alliance Comments at 12.
---------------------------------------------------------------------------

    81. The spot wholesale natural gas markets that create index 
prices--those markets that involve fixed-price trading for next-day or 
next-month delivery at reportable locations and that are actually 
reported to price index publishers--make up only a tiny part of the 
overall wholesale natural market in the United States. This is true 
whether one compares those particular trading volumes to total U.S. 
consumption or whether, as Wisconsin Companies points out in their 
comments \143\ (in support of a higher de minimis threshold) an 
appropriate total trading volume would also include those transactions 
that take place between the production and consumption of natural gas. 
When the spot wholesale natural gas markets that create index prices 
are then broken down among many varied geographical locations, even 
very small market participants can be very important in narrow regional 
contexts. It is conceivable that these small, local wholesale market 
participants do not actually contribute to price formation in this type 
of trading, but the Commission and other market observers are in no 
position to know at this time. If these small, local wholesale market 
participants do contribute to this type of price formation--which would 
be a healthy thing for these markets--such contribution would not be 
detectable if the de minimis threshold were set too high.
---------------------------------------------------------------------------

    \143\ Wisconsin Companies Comments at 5.
---------------------------------------------------------------------------

2. Public Filing
    82. A market participant must submit Form No. 552, in a public 
filing. Some commenters objected to filing the form publicly because, 
in their view, public filing of the annual report could reveal 
confidential trading strategies.\144\ The Commission finds these 
commenters' concerns are misplaced and ignore Congress's directive in 
the transparency provisions. Public access to Form No. 552 data would 
comport with the transparency provisions which require that any such 
rules ``provide for the dissemination, on a timely basis, of 
information * * * to the public.'' \145\ The transparency provisions 
further direct the Commission to ``rely on [existing price publishers 
and providers of trade processing services] to the maximum extent 
possible.'' \146\ By requiring public filings by market participants, 
the Commission would provide an opportunity for trade publications and 
commercial vendors to aggregate the information filed and provide any 
analysis should a desire for such services arise in the energy 
information marketplace.
---------------------------------------------------------------------------

    \144\ See, e.g., PG&E Comments at 6. 0
    \145\ Section 23(a)(2) of the Natural Gas Act, 15 U.S.C. 717t-2 
(2000 & Supp. V 2005).
    \146\ Section 23(a)(4) of the Natural Gas Act, 15 U.S.C. 717t-
2(a)(4) (2000 & Supp. V 2005).
---------------------------------------------------------------------------

    83. Under the transparency provisions, the Commission is required 
to balance confidentiality concerns with the transparency goal that the 
information collected be disseminated publicly. The annual filing 
requirement balances these two statutory requirements. By requiring a 
company to file its report publicly, the requirement adheres to 
Congress's directive that ``[t]he rules shall provide for the 
dissemination, on a timely basis, of information about the availability 
and prices of natural gas at wholesale and in interstate commerce to 
the Commission, State commissions, buyers and sellers of wholesale 
natural gas, and the public.'' \147\ Because the filing requires 
aggregated information and does not require reporting of price 
information or of transaction-specific information, the annual 
reporting requirement adheres to Congress's other directive ``to ensure 
that consumers and competitive markets are protected from the adverse 
effects of potential collusion or other anticompetitive behaviors that 
can be facilitated by untimely public disclosure of transaction-
specific information.'' \148\ The annual reporting requirement avoids 
facilitating anti-competitive behavior in several ways: (i) Reported 
information would not include specific price information; (ii) reported 
information would be aggregated information over a period of one year 
and not transaction-specific information; (iii) reported information 
would be made on an aggregated, national level, and not by point or 
even region; and (iv) information would not be reported until four 
months after the end of the reporting year.
---------------------------------------------------------------------------

    \147\ Section 23(a)(2) of the Natural Gas Act, 15 U.S.C. 717t-
2(a)(2) (2000 & Supp. V 2005).
    \148\ Section 23(b)(2) of the Natural Gas Act, 15 U.S.C. 717t-
2(b)(2) (2000 & Supp. V 2005).
---------------------------------------------------------------------------

    84. This approach is consistent with the opinion of the U.S. 
Department of Justice, which observed that the Commission ``may be able 
to achieve the benefits of transparency while limiting its potential 
harm by aggregating, masking, and lagging the release of such 
information.'' \149\ The Commission determines that ``masking'' or 
permitting filings on a confidential basis is unnecessary to avoid 
potential harm. The aggregation of the information and lagging of 
public filing is sufficient to avoid such harm.\150\ Any potential harm 
from the public filing of Form No. 552 would be minimal given the 
aggregation of data, both aggregation across the nation and aggregation 
across the calendar year, and given the lagging of the public filing of 
information until May 1 of the year following the reporting year. In 
circumstances in which any potential harm is minimal, it

[[Page 1025]]

is not the Commission's practice to permit confidential filings.\151\ 
In addition, smaller market participants whose operations are limited 
to a smaller region of the country are likely to transact less than the 
de minimis amount required to report their transaction information. 
Further, without public filings by market participants, market 
observers would not be able to estimate the relative size of major 
traders.
---------------------------------------------------------------------------

    \149\ Comments of the U.S. Department of Justice, Antitrust 
Division, Transparency Provisions of the Energy Policy Act, Docket 
No. AD06-11-000 (filed Jan. 25, 2007). The Department of Justice's 
comments focused on the electricity markets, although it did note 
that the same general considerations that applied to electricity 
markets also applied to natural gas markets.
    \150\ This is consistent with our approach regarding the 
individual transaction data reported on Electric Quarterly Reports. 
For that much more detailed reporting of individual transactions, 
the Commission found that a delay of 30 days for reporting 
individual transaction data in EQR filings would greatly reduce the 
usefulness of the data as a tool for collusion. Revised Public 
Utility Filing Requirements, Order No. 2001, 67 FR 31043 (May 8, 
2002), FERC Stats. & Regs. ] 31,127 (2002) at P 17.
    \151\ This is consistent with our approach regarding the 
individual transaction data reported on Electric Quarterly Reports. 
For that much more detailed reporting of individual transactions, 
the Commission found that a delay of 30 days for reporting 
individual transaction data in EQR filings would greatly reduce the 
usefulness of the data as a tool for collusion. Revised Public 
Utility Filing Requirements, Order No. 2001, 67 FR 31043 (May 8, 
2002), FERC Stats. & Regs. ] 31,127 (2002) at P 17.
---------------------------------------------------------------------------

3. Purchases and Sales
    85. Several commenters, including EnCana Marketing,\152\ MSCG,\153\ 
and the Texas Alliance,\154\ objected to the inclusion of purchases as 
well as sales in the reporting requirement. While the Commission 
appreciates these commenters' concerns, it believes that volume 
information on purchases as well as sales is necessary for developing a 
complete and accurate picture of the size of the natural gas spot 
market. For example, it will permit the Commission Staff to cross-check 
information. Also, as discussed above, spot prices are formed in only a 
very tiny fraction of all wholesale U.S. natural gas transactions, 
which are then broken down among many varied geographical locations. 
Verifying the amount of such trading becomes far more difficult. At the 
level of de minimis volume set forth herein, this type of cross-
verification becomes more important than it would otherwise. In this 
regard, Staff's experience implementing the Electronic Quarterly 
Reports suggests that purchase transactions are quite important in 
developing a comprehensive picture of trading activity.
---------------------------------------------------------------------------

    \152\ EnCana Marketing Comments at 8-9.
    \153\ MSCG Comments at 9.
    \154\ Texas Alliance Comments at 12.
---------------------------------------------------------------------------

    86. Although the language of the natural gas transparency 
provisions address sales of natural gas, it does not limit the 
Commission from seeking information about natural gas purchases as well 
as sales. They are simply different sides of the same transaction. 
Congress directed the Commission to ``facilitate price transparency in 
markets for the sale * * * of physical natural gas in interstate 
commerce,'' but that language does not limit the Commission to seeking 
information regarding only sales.\155\ Purchases of physical natural 
gas are also a part of such markets; there is no market for the sale of 
natural gas that does not include purchases. Nor does the natural gas 
transparency provision language that provides for the ``dissemination * 
* * of information about the availability and prices of natural gas 
sold at wholesale and interstate commerce'' restrict the 
Commission.\156\ As a practical matter, information regarding purchases 
of natural gas is necessary to evaluate the reliability of information 
regarding sales of natural gas. Both types of information are necessary 
to obtain a useful gauge of price transparency in natural gas markets.
---------------------------------------------------------------------------

    \155\ Section 23(a)(1) of the Natural Gas Act, 15 U.S.C. 717t-
2(a)(1) (2000 & Supp. V 2005).
    \156\ Section 23(a)(2) of the Natural Gas Act, 15 U.S.C. 717t-
2(a)(2) (2000 & Supp. V 2005) (emphasis added).
---------------------------------------------------------------------------

    87. MSCG expressed a further concern about double-counting if 
purchases and sales are included.\157\ Form No. 552 requires that 
purchases clearly be reported separately from sales. Given the clear 
identification of sales as opposed to purchases in the form, the 
Commission remains confident that its Staff and other users of this 
information will be capable of not mixing these separate sets of 
numbers in their analyses.
---------------------------------------------------------------------------

    \157\ MSCG Comments at 9.
---------------------------------------------------------------------------

4. Annual Reporting
    88. The Commission retains from the NOPR the requirement that Form 
No. 552 be submitted annually. Commenters provided a variety of 
perspectives on the frequency of filing, but none supported less 
frequently than annually. NARO favored monthly, regional 
reporting.\158\ EnCana Marketing and MSCG commented that more frequent 
reporting would not provide a significant benefit.\159\ Annual, 
national information alone will significantly improve both the 
Commission's and others' understanding of index pricing. Annual 
reporting should provide a useful amount of information to assess the 
volume break-down of transactions by price type, fixed-priced or index-
priced, and the ratio of index-using transactions to price-forming 
transactions, i.e., fixed-priced transactions. A more granular 
breakdown, which would result from more frequent reporting or from 
regional reporting, would be more likely to reveal the strategies of 
particular market participants, raising the concerns Congress in the 
transparency provisions cautioned the Commission to avoid, that is, 
``the adverse effects of potential collusion or other anticompetitive 
behaviors that can be facilitated by untimely public disclosure of 
transaction-specific information.'' \160\
---------------------------------------------------------------------------

    \158\ NARO Comments at 4; see also Mewbourne Oil Company 
Comments at 5.
    \159\ EnCana Marketing Comments at 10 and MSCG Comments at 9.
    \160\ Section 23(b)(2) of the Natural Gas Act, 15 U.S.C. 717t-
2(b)(2) (2000 & Supp. V 2005).
---------------------------------------------------------------------------

D. Reporting Requirements Changed From the Notice of Proposed 
Rulemaking

    89. In the final rule, the Commission changes several features of 
the reporting requirement proposal presented in the NOPR: (1) Retail 
(end-use) transactions are excluded; (2) basic contact information must 
be reported; (3) a market participant must indicate whether it reports 
transactions to price index publishers; (4) a market participant may 
report in the aggregate for its affiliates; (5) volumes are to be 
reported based on delivery date, not execution date; (6) a market 
participant must report volume information but not the number of 
transactions; (7) volumes of transactions must be broken down by 
whether they are reportable to price index publishers; and (8) the 
filing deadline is changed to May 1 of each year.
1. Exclusion of Retail Transactions
    90. Several commenters objected to the inclusion of purchases in 
the form because end-use customers would be required to file annual 
reports.\161\ Although some transactions reported to indices may 
include purchases by large end-users, the Commission is generally 
interested in wholesale prices. On balance, restricting reporting only 
to clearly wholesale transactions should provide a reasonable set of 
data for assessing wholesale price activity, without burdening retail 
or end-use customers. Consequently, the Commission does not require 
end-use customers or retail buyers to report transaction information 
unless they also make wholesale sales or purchases of natural gas 
greater than the de minimis threshold. Likewise, a transaction made to 
an end-user is not to be included in the volumes reported on the form. 
Of course, if the end-use customer holds a blanket marketing 
certificate under Sec.  284.402, it must report on Form No. 552 that it 
holds such certificate and whether it reports to price index 
publishers.
---------------------------------------------------------------------------

    \161\ See, e.g., AF&PA Comments at 5-7; NGSA Comments at 12-14; 
Industrial Energy Consumers of America Comments at 3.

---------------------------------------------------------------------------

[[Page 1026]]

2. Basic Contact Information and Use of Blanket Sales Certificates
    91. Each market participant, including a de minimis market 
participant, must provide contact information and indicate on Form No. 
552 whether or not it operates under blanket certificate authority 
under Sec.  284.402 or Sec.  284.284 of the Commission's regulations. 
This information from a market participant will provide the Commission 
with basic information regarding participants in wholesale natural gas 
markets necessary to monitor their behavior systematically as well as a 
measure of the number of holders of Natural Gas Act blanket sales 
certificates and contact information for those blanket sales 
certificate holders. This combination of information will permit some 
break down of market information between jurisdictional and non-
jurisdictional components, which is in turn useful for effective 
oversight and monitoring for market manipulation.\162\
---------------------------------------------------------------------------

    \162\ The Commission has the authority to police against 
manipulation of natural gas markets in connection with 
jurisdictional transactions. Prohibition of Energy Market 
Manipulation, Order No. 670, 71 FR 4244 (Jan. 26, 2006), FERC Stats. 
& Regs. ] 31,202 (2006), at P 4, 21-24.
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3. Status of Reporting to Price Index Publishers
    92. Each market participant must state on Form No. 552 whether it 
reports transactions to price index publishers. If so, it must also 
state whether its reporting complies with the standards for reporting 
provided in Sec.  284.403(a) or Sec.  284.288(a), which in turn 
incorporate the reporting procedures of the Policy Statement on Natural 
Gas and Electric Price Indices.\163\ Prior to this final rule, a 
blanket sales certificate holder did not need to report whether it 
reports transactions to a price index publisher; it needed only report 
whether it changes that reporting status.\164\ To simplify the 
reporting, instead of a letter notification only upon a change in 
company policy, under this final rule, a market participant, including 
a blanket sales certificate holder, must notify the Commission annually 
of its price index reporting practices.\165\ The Commission amends 
Sec.  284.288(a) and Sec.  284.403(a) in this final rule accordingly.
---------------------------------------------------------------------------

    \163\ Policy Statement on Natural Gas and Electric Price 
Indices, 104 FERC ] 61,121 (2003).
    \164\ See former 18 CFR 284.403(a) (blanket marketing 
certificate holder); former 18 CFR 284.288(a) (unbundled sales 
certificate holder). In Order No. 644, the Commission required each 
holder of a blanket sales certificate to notify the Commission 
whether it engages in reporting of its transactions to publishers of 
electricity or natural gas price indices according to the standards 
set out in the Commission's Policy Statement on Price Indices. 
Amendments to Blanket Sales Certificates, Order No. 644, 68 FR 66323 
(Nov. 26, 2003), FERC Stats & Regs. ] 31,153 (2003), at P 70-72 
(amending 18 CFR 284.403(a) and 18 CFR 284.288(a)), reh'g denied, 
107 FERC ] 61,174 (2004).
    \165\ However, a seller of electricity under market-based rates 
will continue to be obligated to notify the Commission of its 
reporting status upon a change in status. See 18 CFR 35.37(c).
---------------------------------------------------------------------------

    93. The Commission also requires a holder of blanket sales 
certificate to notify the Commission annually about its reporting of 
transaction information to price index publishers and whether any such 
reporting conforms to the Policy Statement. After the Policy 
Statement's notification requirement took effect, we observed that 
blanket marketing certificate holders may have overlooked this 
requirement and we provided the opportunity for blanket marketing 
certificate holders to notify the Commission by August 1, 2005 of their 
reporting status.\166\ Based on Commission Staff's experience 
monitoring price indices and adherence to the Policy Statement, as 
discussed in the introduction, the Commission believes that 
notification on an annual basis would make the information more 
reliable. As a further benefit, a filing company would have the 
opportunity to review their practices in coordination with their 
response to the data collection proposal described above.
---------------------------------------------------------------------------

    \166\ Order on Further Clarification of Policy Statement at P 
21.
---------------------------------------------------------------------------

    94. In the NOPR, the Commission sought comment on whether the 
procedures set forth in the Policy Statement for reporting to price 
index publishers should be codified.\167\ Of those who commented on 
this provision, some supported codification; some opposed 
codification.\168\ The Commission will not codify these procedures. The 
Commission believes that the regulations read in conjunction with the 
Policy Statement are sufficiently clear to price index publishers and 
those who report to price index publishers. In this regard, for 
example, this year, Commission Staff concluded audits of three natural 
gas market participants with blanket certificate authority that were 
data providers subject to Sec.  284.403 of the Commission's 
regulations.\169\ Commission Staff found that these three companies 
generally complied with the standards in the Policy Statement and found 
the regulations sufficiently clear to perform the audits and ensure 
compliance with the regulations.
---------------------------------------------------------------------------

    \167\ NOPR at P 70.
    \168\ MidAmerican supported codification as a way to add clarity 
to the regulations. MidAmerican Comments at 10; see also NARO 
Comments at 5. MSCG opposed codification. MSCG Comments at 12; see 
also ONEOK Energy Service Co. Comments at 5.
    \169\ See April 5, 2007 letter issued to Anadarko Energy 
Services Co. in Docket No. PA06-11-000 by Director, Office of 
Enforcement and attached Audit of Price Index Reporting Compliance; 
April 5, 2007 letter issued to BG Energy Merchants, LLC. in Docket 
No. PA06-12-000 by Director, Office of Enforcement and attached 
Audit of Price Index Reporting Compliance; April 5, 2007 letter 
issued to Marathon Oil Co. in Docket No. PA06-13-000 by Director, 
Office of Enforcement, and attached Audit of Price Index Reporting 
Compliance.
---------------------------------------------------------------------------

    95. In the final rule, in contrast to the proposal in the NOPR, a 
market participant with sales or purchases greater than or at the de 
minimis level must state whether it reports its transactions to a price 
index publisher regardless of whether it operates under a blanket sales 
certificate. Platts, in its comments, suggested that all companies--not 
just blanket certificate holders--notify the Commission annually of 
their price reporting status.\170\ In fact, the processes used in the 
formation of wholesale natural gas prices by market participants have 
no regard for whether or not those participants operate under blanket 
certificates. In order to clearly assess the effectiveness of the index 
formation process, the Commission needs to collect the information 
about reporting to price index publishers from each market participant 
including market participants that section 1 of the Natural Gas Act 
\171\ excludes from the Commission's certificate authority under 
section 7 of the Natural Gas Act.\172\
---------------------------------------------------------------------------

    \170\ Platts Comments at 8.
    \171\ 15 U.S.C. 717.
    \172\ 15 U.S.C. 717f.
---------------------------------------------------------------------------

    96. However, only a company operating pursuant to a blanket sales 
certificate must state on Form No. 552 whether its reporting to price 
index publishers conforms to the Commission's Policy Statement. Platts 
suggested that all companies affirm that their price reporting 
practices comply with the Policy Statement procedures.\173\ But, the 
Policy Statement standards apply only to holders of blanket sales 
certificates. A market participant that does not hold blanket sales 
certificates is not required to comply with the Policy Statement 
processes, nor does it receive the safe harbor available in the Policy 
Statement. Consequently, there is no value to the Commission in 
collecting and publicizing the compliance of companies with policies 
that do not apply to them.
---------------------------------------------------------------------------

    \173\ Id.
---------------------------------------------------------------------------

4. Aggregated Reporting
    97. In reporting transactions on Form No. 552, a market participant 
may, but is not required to, aggregate information from its affiliates. 
One commenter,

[[Page 1027]]

Wisconsin Companies, underscored its difficulties in providing an 
aggregated report.\174\ Others, including EPSA, Calpine and NGSA, 
sought the ability to file an aggregate report.\175\ Given the comments 
both for and against aggregation and the ease with which Staff can 
process the information in either form, the Commission provides the 
option to reporting companies. A company must indicate on Form No. 552 
the affiliates for which it is reporting. If an affiliate or subsidiary 
holds a blanket certificate pursuant to Sec.  284.284 or Sec.  284.402, 
each affiliate must report separately that it has such a certificate. 
Similarly, if an affiliate reports transactions to price index 
publishers, it must report so separately.
---------------------------------------------------------------------------

    \174\ Wisconsin Companies at 6.
    \175\ EPSA Comments at 7-8; Calpine Comments at 4-5; NGSA 
Comments at 15.
---------------------------------------------------------------------------

    98. By contrast, asset managers may not report aggregated 
information for their customers in Form No. 552. Several commenters 
sought clarification on the reporting obligations of asset 
managers.\176\ It is unlikely that transactions between asset managers 
and their clients would be used to create price indices, although such 
transactions may use price indices. Given the variety and diversity of 
services available from asset managers, and the interest of the 
Commission in tracking the amount of wholesale natural gas activity 
that both creates and relies on spot price indices, information about 
the use of price indices would be lost if such aggregation were 
permitted.
---------------------------------------------------------------------------

    \176\ AGA Comments at 3; Duke Energy Ohio, Inc. at 8-9.
---------------------------------------------------------------------------

5. Reportable Volumes Based on Contracted Delivery
    99. Unlike in the NOPR, Form No. 552 now requires reporting based 
on date of contracted delivery and not date of execution. Although 
there were no comments on this issue, in Staff's experience, for many 
market participants, this approach may also simplify collection of data 
by permitting use of more direct accounting information. The 
Commission's goal in obtaining data is to evaluate the creation and use 
of price information in the market, specifically the creation and use 
of spot price indices. Because wholesale natural gas price indices are 
based on fixed-priced trading for next-day or next-month delivery, 
delivery dates for the transactions of particular interest will not 
differ by more than a month from execution date. Consequently, 
reporting transactions by delivery date gives a sufficiently accurate 
picture of the use of price indices and how well price indices reflect 
fixed-priced transactions. Even though not pointed out in comments, the 
trade-off of some information lost for what is likely to be much 
simpler gathering of information by respondents is a reasonable one.
6. Eliminate Reporting Numbers of Transactions
    100. In another change from the NOPR, Form No. 552 does not require 
market participants to report the number of their transactions. 
Although this part of the proposal did not prompt comments, this change 
streamlines the form and reduces the burden of reporting without 
significantly reducing the value of the information. Volume information 
is more relevant for monitoring the amount of market activity used in 
creating price indices and using those indices. On reflection, the 
number of transactions is not needed to obtain greater transparency of 
the price formation process, consequently Form No. 552 does not include 
it.
7. Conform Reporting Definitions to Those Used by Price Index 
Publishers
    101. In several other respects, the reported information requested 
on the final Form No. 552 differs from the information on the form 
proposed in the NOPR. In response to the comments of Platts \177\ as 
supported by APGA \178\ and AGA,\179\ Form No. 552 distinguishes more 
directly those fixed-priced transactions that are reportable to price 
index publishers from those that are not. Platts' expressed concern 
that information collected from the proposed form would not effectively 
show the ratio of market activity that forms index prices to the market 
activity eligible to form index prices.\180\ As proposed in the NOPR, 
all next-month and next-day fixed price transactions would have been 
reported, instead of only those transactions that were actually 
eligible for inclusion in price indices. The changes in the final Form 
No. 552 should allow the Commission, market participants and the public 
to assess in a more focused way the amount of fixed price transactions 
that contribute to the formation of price indices. In effect, the 
change allows a more precise calculation of the proportion of those 
transactions that could be reported to price publishers to those that 
are reported to them.
---------------------------------------------------------------------------

    \177\ Platts Comments at 4, 5 & 7.
    \178\ APGA Reply Comments at 1 & 3.
    \179\ AGA Reply Comments at 7.
    \180\ Platts Comments at 4-7.
---------------------------------------------------------------------------

    102. To implement this change, a market participant must categorize 
certain volumes by whether the transaction was made at a ``reportable 
location'' regardless of whether the transaction was actually reported 
to a price index publisher. As stated on Form No. 552, a ``reportable 
location'' transaction is ``a location (hubs, pipelines, regions, etc.) 
where `Price Index Publishers' collect `Fixed Price' information for 
transactions with `Next-Day' or `Next-Month Delivery' obligations, and 
produce index prices.'' As these locations may change over time, 
Commission Staff will maintain a list of current ``Reportable 
Locations'' for each price index publisher on the Commission Web site 
at http://www.ferc.gov/docs-filing/eforms.asp#552. This information 

will allow a market participant to determine whether a transaction 
should be classified on Form No. 552 as a reportable transaction, i.e., 
one made at a reportable location. Commission Staff will list the price 
index publishers and the index price points no later than December 20 
of the year previous to the report year. The first annual report will 
be due in 2009 for transactions delivered in 2008.
    103. Although generally supportive of making a distinction based on 
whether a transaction is reportable, APGA raised the concern that a 
market participant that does not report transactions to price index 
publishers will not easily understand which transactions are 
reportable.\181\ To address this concern, Form No. 552 provides more 
information regarding these distinctions than the form proposed in the 
NOPR. In particular, Form No. 552 asks for transactions with particular 
price and term characteristics (i.e., fixed-priced transactions for 
next-day or next-month delivery) at reportable locations. To provide a 
common understanding of reportable locations, the Commission Staff will 
maintain a list of current ``Reportable Locations'' with links to 
``Price Index Publishers'' descriptions of their processes for 
receiving price information and publishing indices on the ferc.gov Web 
site at http://www.ferc.gov/docs-filing/eforms.asp#552.

---------------------------------------------------------------------------

    \181\ APGA Reply Comments at 2.
---------------------------------------------------------------------------

    104. In addition, the Commission believes that appropriately 
reporting those transactions needed to establish wholesale natural gas 
market prices represents a significant public good. The Commission 
believes that a market participant, should consider reporting in a 
responsible way, and to do so must become aware of which of its 
transactions are reportable. The burden imposed on market participants 
to

[[Page 1028]]

understand and distinguish its reportable from its non-reportable 
transactions is easily balanced by the benefits of improving public 
knowledge of how much market activity, though reportable, is not 
reported. The benefits accrue to the Commission and all market 
participants, who will be able to evaluate the usefulness of the price 
indices better.
8. Filing Date
    105. Unlike in the NOPR, Form No. 552 will have a filing deadline 
of May 1 in the year after the reporting year. In this regard, the 
Commission agrees with the commenters who sought more time for filing 
than permitted by the February 15 deadline proposed in the NOPR.\182\ 
Because the data used for the form would come from the accounting and 
other official records of the market participants reporting, the 
response to Form No. 552 must be coordinated with a variety of other 
regular annual financial and regulatory reports. May 1 was the latest 
filing date recommended in comments. Given the aggregate nature of the 
data, a time lag of four months from the reporting year should keep the 
information timely while providing market participants the time needed 
to coordinate a new regulatory filing with other obligations.
---------------------------------------------------------------------------

    \182\ MSCG Comments at 9-10; Statoil Comments at 6-7; AGA 
Comments at 4; NGSA Comments at 15-16.
---------------------------------------------------------------------------

E. Clarification of Other Reporting Issues

    106. Several commenters requested clarification as to reportable 
volumes. The Commission will address these in turn, first those that 
must be reported and then those that do not need to be reported.
1. Reportable Volumes
    107. Interstate pipelines must report sale and purchase volumes 
related to cash-outs, imbalance makeups and operations. INGAA advocated 
that transactions associated with cash-out and operations be excluded 
from Form No. 552 because similar information is available from Form 
No. 2 and from pipeline electronic bulletin boards (EBBs), and the 
volumes used are not available for trading.\183\ Similarly, Shell 
indicated that imbalance makeup volumes should be excluded.\184\ The 
Commission finds these commenters' views unpersuasive. The partial 
availability of information on Form No. 2 submissions and through EBBs 
does not provide a complete view of that information in an assessment 
of wholesale natural gas market activity. In addition, while it is true 
that volumes of sales and purchases related to pipeline cash-out and 
operations are unlikely to be used to create price indices, such sales 
and purchases do use price indices as a way of transferring value among 
market participants. Consequently, the information is useful in 
assessing how spot prices are being used commercially in the nation.
---------------------------------------------------------------------------

    \183\ INGAA Comments at 9.
    \184\ Shell Comments at 8.
---------------------------------------------------------------------------

    108. Market participants must include on Form No. 552 sale and 
purchase volumes attributable to royalty-in-kind transactions, gas 
provided for processing such as plant thermal reduction, and purchases 
and sales related to the production and gathering function. Shell 
advocated excluding these transactions from reporting.\185\ While these 
transactions may not affect the formation of price indices in wholesale 
markets, these transactions often make use of price indices. Again, to 
the extent that transfers of value take place based on price indices, 
it is important that the Commission and other market observers be able 
to understand the extent of that transfer and its dependency on price 
indices as well.
---------------------------------------------------------------------------

    \185\ Shell Comments at 8.
---------------------------------------------------------------------------

    109. NGSA further sought clarification regarding transactions 
related to export for re-import.\186\ The sale of these volumes, 
assuming they could be identified, has an effect on overall wholesale 
markets and could, potentially, either help create or make use of price 
indices, consequently they should be reported. If such transactions 
take place among affiliates, they should be excluded (as explained 
below).
---------------------------------------------------------------------------

    \186\ Id.
---------------------------------------------------------------------------

2. Non-Reportable Volumes
    110. The instructions to Form No. 552 now explicitly exclude 
volumes due to transactions among affiliates. Several commenters 
emphasized the importance of excluding volumes transacted among 
affiliates.\187\ A transaction between affiliates is not part of the 
price formation process in wholesale natural gas markets.
---------------------------------------------------------------------------

    \187\ See, e.g., Shell Comments at 8; NGSA Comments at 15.
---------------------------------------------------------------------------

    111. Market participants may not include any type of financially-
settled transaction on Form No. 552. However, transactions with 
physical delivery obligations must be reported--whether those 
transactions actually continued through delivery or not. When the 
physical transaction was executed, it may have either contributed to or 
used spot market price information regardless of its later disposition. 
In other words, sales or purchase obligations that were ``booked out'' 
must be included. The Commission intends ``physical natural gas 
transaction'' to mean a sale or purchase of natural gas with an 
obligation to deliver or receive physically, even if the natural gas is 
not physically transferred due to some offsetting or countervailing 
trade. Thus, even if the transaction does not go to physical delivery, 
it would still be included as a physical transaction.
    112. In response to NGSA,\188\ the Commission clarifies that a 
market participant should not include volumes of imported LNG traded 
prior to regasification. LNG traded prior to regasification is not 
wholesale natural gas, though it is a source of natural gas through 
regasification itself. NGSA further sought clarification regarding 
natural gas exports from LNG liquefaction facilities.\189\ LNG traded 
after liquefaction is also not wholesale natural gas, consequently a 
market participant must exclude such volumes.
---------------------------------------------------------------------------

    \188\ NGSA Comments at 15.
    \189\ Id.
---------------------------------------------------------------------------

    113. Unlike in the NOPR, Form No. 552 no longer requests 
information on NYMEX contracts that go to physical delivery because the 
purpose of the form is to focus on fixed-priced spot transactions and 
how they are used. Further, information attributable to such contracts 
is available from NYMEX. Consequently, to reduce the burden on market 
participants, this instruction has been removed and a market 
participant may not include volume information related to physically-
settled future contracts.

F. Other Issues Raised by Commenters

1. Safe Harbor Policy
    114. Many commenters requested a ``safe harbor'' for 
reporting.\190\ The Commission set forth a ``safe harbor policy'' 
provision in the Policy Statement for voluntary reporting to price 
index publishers.\191\ As requested by commenters, the Commission 
reiterates that it does not intend to prosecute or penalize parties for 
inadvertent errors in reporting. The Commission's goal in setting forth 
the reporting requirement is to obtain information for the evaluation 
of price indices; it is not to penalize good faith efforts at 
compliance. However, in contrast to the voluntary reporting to price 
index publishers, the annual reporting requirement for Form No. 552

[[Page 1029]]

is mandatory for certain market participants. The Commission will focus 
any enforcement efforts on entities that violate good faith standards, 
including instances of intentional submission of false, incomplete or 
misleading information to the Commission, of failure to report in the 
first instance, or of failure to exercise due diligence in compiling 
and reporting data.
---------------------------------------------------------------------------

    \190\ AGA Comments at 6-7; NGSA Comments at 16-17; PG&E Comments 
at 6; Suez Energy North America, Inc. Comments at 10-12.
    \191\ Policy Statement at P 37.
---------------------------------------------------------------------------

2. Mandatory Reporting of Fixed-Priced Transactions
    115. Several commenters called for mandatory reporting of 
individual, fixed-priced transactions.\192\ However, the Commission 
will not require mandatory reporting of fixed-priced transactions to 
price index publishers at this time. Mandatory reporting would appear 
to provide additional benefits in that it could assist in determining 
whether the price indices are an accurate reflection of underlying 
fixed-priced trading. Market participants, state commissions, and the 
Commission could gain a clearer sense of the volume and number of 
natural gas transactions that form prices by location and duration. In 
the NOPR, the Commission acknowledged these benefits, but the 
Commission decided that mandatory reporting is not appropriate at this 
time, citing three reasons. We review those three reasons here.
---------------------------------------------------------------------------

    \192\ See, e.g., APGA at 5-8.
---------------------------------------------------------------------------

    116. First, mandatory reporting of certain transactions would 
create an incentive for wholesale buyers and sellers to consider 
structuring transactions based on avoiding reporting requirements 
rather than simply on the economics of the transaction. Even very 
subtle shifts in the form of transactions could easily make them non-
reportable in any pre-defined system. For instance, if the Commission 
required reporting of fixed-price, day-ahead transactions, market 
participants could create two-day transactions, achieving substantially 
the same economic result and avoiding reporting.
    117. Second, buyers and sellers might shift away from fixed-priced 
transactions to indexed-price transactions. Fixed-priced transactions 
could easily decrease to the point that indices that rely on them would 
no longer represent reliable indicators of the market. Such indices 
would likely become more volatile as they moved more in response to 
fewer transactions.\193\
---------------------------------------------------------------------------

    \193\ At the October 13, 2006 technical conference in this 
proceeding, several panelists raised similar concerns and advocated 
against mandatory price reporting. See, e.g., Tr. at 12-13 (Mr. 
Christopher Conway on behalf of Conoco-Phillips Gas and Power, the 
Natural Gas Supply Association, and the Independent Producers 
Association of America) (asserting that mandatory price reporting 
could drive market participants away from reportable transactions, 
thereby, possibly reducing liquidity); Tr. at 35-36, 38-39 (Mr. Alex 
Strawn on behalf of the Process Gas Consumers Group) (asserting that 
mandatory reporting of fixed price transactions would drive market 
participants to use index-price transactions, thereby, reducing 
liquidity); Comments of Independent Petroleum Association of 
America, at p. 3, Transparency Provisions of the Energy Policy Act, 
Docket No. AD06-11-000 (filed Nov. 1, 2006) (mandatory reporting 
would push market participants away from reportable transactions and 
cause them to do more index-price transactions); Comments of Natural 
Gas Supply Association, Transparency Provisions of the Energy Policy 
Act, Docket No. AD06-11-000 (filed Nov. 1, 2006) (similar).
---------------------------------------------------------------------------

    118. Third, the Commission stated that broad availability of 
detailed transaction data might prove to be anticompetitive.\194\
---------------------------------------------------------------------------

    \194\ NOPR at P 60.
---------------------------------------------------------------------------

    119. In its comments, APGA disputed the three reasons asserted by 
the Commission in the NOPR. It discounts the first reason asserted that 
mandatory reporting creates an incentive to structure transactions to 
avoid reporting. APGA contended that the burden of mandatory reporting 
is not so great as to cause a significant number of market participants 
``to change the way they do business.'' \195\ APGA did not deny the 
existence of such an incentive and the Commission does not wish to 
create such an incentive. This is particularly so given that it would 
be difficult to detect whether an entity was acting on such an 
incentive and, thereby, determine what effect this incentive had on 
reporting of transactions. In discounting the assertion, APGA also 
contended that the Commission is sufficiently creative to frame its 
reporting requirement to overcome those that might seek to avoid the 
reporting requirement. The Commission is not as confident. Commission 
Staff cannot monitor activity so closely as to be aware of every 
attempt to evade the Commission's annual reporting requirement. 
Additionally, because market practices change over time, trying to 
promulgate rules to account for constantly changing market dynamics 
would not only place a significant demand on Commission resources, but 
the level of interaction could easily interfere in the healthy, 
continuing development of the markets themselves.
---------------------------------------------------------------------------

    \195\ APGA Comments at 6.
---------------------------------------------------------------------------

    120. APGA also disputed that mandatory price reporting would cause 
entities to switch from fixed-priced transactions to index-priced 
transactions because there is little burden to such reporting and those 
that would switch would not have been reporting to price indices 
anyway. The Commission does not share APGA's confidence that mandating 
price reporting would not cause such switching. The Commission remains 
concerned about the liquidity of the fixed-priced, next-day and next-
month wholesale natural gas markets, and would prefer to see much more 
activity in these price-generating markets. Any reluctance to actively 
trade fixed-priced transactions could affect liquidity in these crucial 
markets.
    121. APGA disputes the assertion in the NOPR that mandatory price 
reporting could lead to the potential collusion or anticompetitive 
behavior because mandatory price reporting would make public detailed 
transaction data. The Commission's concern would be dependent on the 
exact nature of the mandatory price reporting process, though the 
Commission acknowledges that simply mandating reporting to price index 
publishers would not, given historical practice, put competitive 
information at risk.
    122. The annual reporting requirement set forth in this final rule 
can provide significant insight into the formation and use of price 
indices and how they reflect underlying fixed-priced trading. Given 
these benefits, at far lower costs in time and effort, the Commission 
continues to believe mandatory reporting of fixed-priced transactions 
is not appropriate at this time.
3. Effects on Trade Publishers
    123. In opposing the annual reporting requirement, MSCG contended 
that the requirement imposes a burden on market participants simply to 
benefit commercial trade publishers. As discussed above, the 
transparency benefits justify the burdens imposed by the annual 
reporting requirement. The Commission acknowledges that the annual 
reporting requirement could benefit commercial trade publishers, but 
disagrees that this is a drawback. Indeed, the comment ignores the fact 
that commercial trade publishers are the most significant source of 
market price information in U.S. wholesale natural gas markets. The 
information they develop is used by Commission Staff to monitor market 
activity, and more significantly, buyers and sellers interested in 
access to market prices. Acknowledging this, Congress specifically 
directed the Commission in prescribing transparency rules to ``rely on 
[existing price] publishers and [trade

[[Page 1030]]

processing] services to the maximum extent possible.'' \196\
---------------------------------------------------------------------------

    \196\ Section 23(a)(4) of the Natural Gas Act; 15 U.S.C. 717t-
2(a)(4) (2000 & Supp. V 2005).
---------------------------------------------------------------------------

4. Information Collection Burden
    124. NEM argued that market participants' data is not currently 
stored in a format that could be used to fill out the proposed form, 
and, as a result, market participants would need to develop ancillary 
information technology systems to store such data at significant 
cost.\197\ NEM also stated that although the reporting proposal 
requires annual reporting, data collection would be needed daily, which 
would be costly. In requiring annual aggregated reporting of a limited 
set of transactions, the Commission intends that each market 
participant would have the data necessary to complete Form No. 552 in 
the course of its business operations, for instance, in the course of 
preparing year-end aggregations for management, accounting and 
shareholder reporting purposes. The information needed to complete Form 
No. 552 is information that can be extracted from the market 
participant's book of accounts that it would already have developed as 
part of its normal business operations. If a market participant buys or 
sells natural gas under complex arrangements, then it is likely to have 
an accounting system to manage the complexity and sort out the 
categories of purchases and sales. The Commission bases its estimated 
cost burden on a market participant adapting existing information to 
the standard format for Form No. 552 and submitting the form annually. 
On that basis, the Commission will retain its estimate of the cost 
burden as set forth in the NOPR. This estimate does not include the 
regulatory and compliance costs attributable to reporting as those 
costs are part of the overhead that market participants bear as part of 
their participation in Commission-regulated markets. Although Sequent 
asserted that asset managers would have to renegotiate contracts to 
provide for the annual reporting requirement, the Commission considers 
it likely that such asset management agreements already require 
collection of the transactions executed which could be used to complete 
Form No. 552.
---------------------------------------------------------------------------

    \197\ NEM Comments at 6-7.
---------------------------------------------------------------------------

VI. Information Collection Statement

    125. The Office of Management and Budget (OMB) regulations require 
that OMB approve certain reporting, record keeping, and public 
disclosure (collections of information) imposed by an agency.\198\ 
Pursuant to OMB regulations, the Commission will provide notice of its 
proposed information collections to OMB for review under section 
3507(d) of the Paperwork Reduction Act of 1995.\199\
---------------------------------------------------------------------------

    \198\ 5 CFR 1320.11.
    \199\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

    126. The Commission identifies the information provided under Part 
260 as contained in FERC Form No. 552. The Commission solicited 
comments on the need for this information, whether the information 
would provide useful transparency information, ways to enhance the 
quality, utility, and clarity of the information to be collected, and 
any suggested methods for minimizing respondents' burden. Where 
commenters raised concerns that information collection requirements 
would be burdensome to implement, the Commission has addressed those 
concerns elsewhere in the rule.
    127. The Commission estimates the burden for complying with the 
final rule as follows:

----------------------------------------------------------------------------------------------------------------
                                                                     Estimated                       Estimated
                                     Number of       Number of     annual burden   Total annual      start-up
         Data collection            respondents    responses per     hours per     hours for all    burden per
                                                    respondent      respondent      respondents     respondent
----------------------------------------------------------------------------------------------------------------
        Part 260 FERC-552
Annual Reporting Requirement....           1,500      1 per year               4           6,000       40 hours.
----------------------------------------------------------------------------------------------------------------

    Information Collection Costs: The average annualized cost for each 
respondent is projected to be the following:

----------------------------------------------------------------------------------------------------------------
                                                             Annualized
                                                          capital/startup                       Annualized costs
                                                           costs (10-year      Annual costs          total
                                                           amortization)
----------------------------------------------------------------------------------------------------------------
                        FERC-552
Annual Reporting Requirement...........................               $400               $400               $800
----------------------------------------------------------------------------------------------------------------

    Title: FERC-552.
    Action: Proposed Information Filing.
    OMB Control No: 1902-0242.
    Respondents: Business or other for profit.
    Frequency of Responses: Annually.
    Necessity of the Information: The annual filing of transaction 
information by market participants is necessary to provide information 
regarding the size of the physical natural gas market, the use of the 
natural gas spot markets and the use of fixed- and indexed-price 
transactions.
    128. Internal Review: The Commission has reviewed the requirements 
pertaining to natural gas market participants and determined they are 
necessary to provide price and availability information regarding the 
sale of natural gas in interstate markets.
    129. Interested persons may obtain information on the annual 
reporting requirements by contacting: Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, [Attention: 
Michael Miller, Office of the Chief Information Officer], phone: (202) 
502-8415, fax: (202) 208-2425, e-mail: Michael.Miller@ferc.gov. 
Comments on the requirements of the final rule also may be sent to the 
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Washington, DC 20503 [Attention: Desk Officer for the Federal 
Energy Regulatory Commission].
    130. For submitting comments concerning the collections of 
information and the associated burden estimates, please send your 
comments to the contact listed above and to the

[[Page 1031]]

Office of Information and Regulatory Affairs, Office of Management and 
Budget, 725 17th Street, NW., Washington, DC 20503 Attention: Desk 
Officer for the Federal Energy Regulatory Commission, phone (202) 395-
3122, fax: (202) 395-7285. Due to security concerns, comments should be 
sent electronically to the following e-mail address: 
oira_submission@omb.eop.gov. Please reference the docket number of this 

rulemaking in your submission.

VII. Environmental Analysis

    131. The Commission is required to prepare an Environmental 
Assessment or an Environmental Impact Statement for any action that may 
have a significant adverse effect on the human environment.\200\ The 
actions taken here fall within categorical exclusions in the 
Commission's regulations for information gathering, analysis, and 
dissemination, and for sales, exchange, and transportation of natural 
gas that requires no construction of facilities.\201\ Therefore, an 
environmental assessment is unnecessary and has not been prepared in 
this rulemaking.
---------------------------------------------------------------------------

    \200\ Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & 
Regs, ] 30,783 (1987).
    \201\ 18 CFR 380.4(a)(5) & (a)(27).
---------------------------------------------------------------------------

VIII. Regulatory Flexibility Act

    132. The Regulatory Flexibility Act of 1980 (RFA) \202\ generally 
requires a description and analysis of final rules that will have 
significant economic impact on a substantial number of small entities. 
The RFA requires consideration of regulatory alternatives that 
accomplish the stated objectives of a proposed rule and that minimize 
any significant economic impact on such entities. The RFA does not, 
however, mandate any particular outcome in a rulemaking. At a minimum, 
agencies are to consider the following alternatives: Establishment of 
different compliance or reporting requirements for small entities or 
timetables that take into account the resources available to small 
entities; clarification, consolidation, or simplification of compliance 
and reporting requirements for small entities; use of performance 
rather than design standards; and exemption for certain or all small 
entities from coverage of the rule, in whole or in part.
---------------------------------------------------------------------------

    \202\ 5 U.S.C. 601-612.
---------------------------------------------------------------------------

    133. The annual reporting requirement set forth in the final rule 
will not have a significant economic impact on a substantial number of 
small entities. The requirement for annual reporting of physical 
natural gas transactions will have minimal impact on small entities. By 
incorporating a de minimis exemption into the regulations, the 
Commission has reduced the number of small entities subject to the 
requirements: de minimis entities without blanket sales certificates 
will not be required to report. This reporting requirement will affect 
small entities but the burden on them will be minimal. For each entity, 
small or otherwise, that is required to comply with the annual 
reporting requirement, the Commission estimates that the compliance 
would require a one-time cost of approximately $4,000 and an annual 
cost thereafter of $400. Although some costs would increase for market 
participants with a greater number of transactions, we expect that the 
increase would be likely offset because such entities would have 
already compiled information regarding their transactions in the 
aggregate. This amount is not a significant burden on small entities. 
The de minimis exemption provides a regulatory alternative that will 
reduce the economic impact on certain small entities from coverage of 
the rule. Accordingly, the Commission certifies that the final rule 
will not have a significant economic impact on a substantial number of 
small entities.

IX. Document Availability

    134. In addition to publishing the full text of this document in 
the Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through FERC's Home Page (http://www.ferc.gov) and in FERC's 

Public Reference Room during normal business hours (8:30 a.m. to 5 
p.m., eastern time) at 888 First Street, NE., Room 2A, Washington DC 
20426.
    135. From FERC's Home Page on the Internet, this information is 
available on eLibrary. The full text of this document is available on 
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or 
downloading. To access this document in eLibrary, type the docket 
number excluding the last three digits of this document in the docket 
number field.
    136. User assistance is available for eLibrary and the FERC's Web 
site during normal business hours from FERC Online Support at 202-502-
6652 (toll free at 1-866-208-3676) or e-mail at 
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-

8371, TTY (202) 502-8659. E-mail the Public Reference Room at 
public.referenceroom@ferc.gov.


X. Effective Date and Congressional Notification

    137. These regulations are effective February 4, 2008. The 
Commission has determined, with the concurrence of the Administrator of 
the Office of Information and Regulatory Affairs of OMB, that this rule 
is not a ``major rule'' as defined in section 351 of the Small Business 
Regulatory Enforcement Fairness Act of 1996. The Commission will submit 
the final rule to both houses of Congress and to the General 
Accountability Office.

List of Subjects

18 CFR Part 260

    Natural gas; Reporting and recordkeeping requirements.

18 CFR Part 284

    Continental shelf; Natural gas; Reporting and recordkeeping 
requirements.

18 CFR Part 385

    Administrative practice and procedure; Electric power; Penalties; 
Pipelines; Reporting and recordkeeping requirements.

    By the Commission.
Kimberly D. Bose,
Secretary.

0
For the reasons stated in the preamble, the Federal Energy Regulatory 
Commission, amends 18 CFR Chapter I as follows.

PART 260--STATEMENTS AND REPORTS (SCHEDULES)

0
1. The authority citation for part 260 continues to read as follows:

    Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352.


0
2. Section 260.401 is added to read as follows:


Sec.  260.401  FERC Form No. 552, Annual Report of Natural Gas 
Transactions.

    (a) Prescription. The annual reporting report for natural gas 
market participants, designated as FERC Form No. 552, is prescribed for 
the calendar year ending December 31, 2008 and each calendar year 
thereafter.
    (b) Filing requirements--(1) Who must file. Unless otherwise 
exempted or granted a waiver by Commission rule or order, each natural 
gas market participant, i.e., any buyer or seller that engaged in 
wholesale, physical natural gas transactions the previous calendar 
year, must prepare and file with the Commission a FERC Form No. 552 
pursuant to the definitions and general instructions set forth in that 
form. As a

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de minimis exemption, a natural gas market participant is exempt from 
this filing requirement if:
    (i) It does not hold a blanket sales certificate pursuant to Sec.  
284.402 of this chapter or a blanket unbundled sales certificate 
pursuant to Sec.  284.284 of this chapter; and
    (ii) It engages either in wholesale, physical natural gas sales 
that amount to less than 2,200,000 MMBtus for the previous calendar 
year or wholesale physical natural gas purchases that amount to less 
than 2,200,000 MMBtus for the previous calendar year.
    (2) Form No. 552 must be filed as prescribed in Sec.  385.2011 of 
this chapter as indicated in the General Instructions set out in the 
annual reporting form, and must be properly completed and verified. 
Each market participant must file Form No. 552 by May 1, 2009 for 
calendar year 2008 and by May 1 of each year thereafter for the 
previous calendar year. Each report must be prepared in conformance 
with the Commission's software and guidance posted and available for 
downloading from the FERC Web site (http://www.ferc.gov). One copy of 

the report must be retained by the respondent in its files.

PART 284--CERTAIN SALES AND TRANSPORTATION OF NATURAL GAS UNDER THE 
NATURAL GAS POLICY ACT OF 1978 AND RELATED AUTHORITIES

0
3. The authority citation for part 284 continues to read as follows:

    Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352; 
43 U.S.C. 1331-1356.


0
4. In Sec.  284.288, paragraph (a) is revised to read as follows:


Sec.  284.288  Code of conduct for unbundled sales service.

    (a) To the extent Seller engages in reporting of transactions to 
publishers of electricity or natural gas indices, Seller must provide 
accurate and factual information, and not knowingly submit false or 
misleading information or omit material information to any such 
publisher, by reporting its transactions in a manner consistent with 
the procedures set forth in the Policy Statement on Natural Gas and 
Electric Price Indices, issued by the Commission in Docket No. PL03-3-
000 and any clarifications thereto. Seller must notify the Commission 
as part of its FERC Form No. 552 annual reporting requirement in Sec.  
260.401 of this chapter whether it reports its transactions to 
publishers of electricity and natural gas indices. In addition, Seller 
must adhere to any other standards and requirements for price reporting 
as the Commission may order.
* * * * *

0
5. In Sec.  284.403, paragraph (a) is revised to read as follows:


Sec.  284.403  Code of conduct for persons holding blanket marketing 
certificates.

    (a) To the extent Seller engages in reporting of transactions to 
publishers of electricity or natural gas indices, Seller must provide 
accurate and factual information, and not knowingly submit false or 
misleading information or omit material information to any such 
publisher, by reporting its transactions in a manner consistent with 
the procedures set forth in the Policy Statement on Natural Gas and 
Electric Price Indices, issued by the Commission in Docket No. PL03-3-
000 and any clarifications thereto. Seller must notify the Commission 
as part of its FERC Form No. 552 annual reporting requirement in Sec.  
260.401 of this chapter whether it reports its transactions to 
publishers of electricity and natural gas indices. In addition, must 
shall adhere to any other standards and requirements for price 
reporting as the Commission may order.
* * * * *

PART 385--RULES OF PRACTICE AND PROCEDURE

0
6. The authority citation for part 385 continues to read as follows:

    Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717z, 3301-3432; 16 
U.S.C. 791a-825v, 2601-2645; 28 U.S.C. 2461; 31 U.S.C. 3701, 9701; 
42 U.S.C. 7101-7352, 16441, 16451-16463; 49 U.S.C. 60502; 49 App. 
U.S.C. 1-85 (1988).


0
7. In Sec.  385.2011, paragraph (a)(11) is added to read as follows:


Sec.  385.2011  Procedures for filing in electronic media (Rule 2011).

    (a) * * *
    (11) FERC Form No. 552, Annual Report of Natural Gas Transactions.

    Note: The following appendix will not be published in the Code 
of Federal Regulations.

Appendix A to Final Rule

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 [FR Doc. E7-25478 Filed 1-3-08; 8:45 am]

BILLING CODE 6717-01-C
