[Federal Register: September 10, 2003 (Volume 68, Number 175)]
[Notices]
[Page 53359-53362]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10se03-42]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
[Docket No. PL03-3-000]
Proposed Information Collection and Request for Comments
September 5, 2003.
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Request for Office of Management and Budget Emergency
Processing of proposed information collection and request for comments.
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SUMMARY: In compliance with the requirements of Section 3507(j)(1) of
the Paperwork Reduction Act of 1995 (Pub. L. 104-13), and 5 CFR 1320.13
of the Office of Management and Budget (OMB) regulations, the Federal
Energy Regulatory (Commission) is providing notice of its request to
OMB for emergency processing of a proposed collection of information in
connection with the ``Policy Statement on Natural Gas and Electric
Price Indices'' issued in Docket No. PL03-3-000. The Commission is
soliciting public comment on the specific aspects of the information
collection described below.
DATES: The Commission and OMB must receive comments on or before
September 17, 2003. Because the Commission has requested OMB to process
the proposed collection of information in Docket No. PL03-3-000 on an
emergency basis, comments on this collection of information should be
filed with OMB, attention FERC Desk
[[Page 53360]]
Officer, as soon as possible. The Commission is requesting that OMB
make a determination on this information collection requirement by
September 19, 2003.
ADDRESSES: Comments may be filed electronically via the eFiling link on
the Commission's Web site at http://www.ferc.gov . Commenters unable to
file comments electronically must send an original and 14 copies of
their comments to: Federal Energy Regulatory Commission, Office of the
Secretary, 888 First Street, NE., Washington, DC 20426. A copy of the
comments should also be served on OMB: FERC Desk Officer, Office of
Information and Regulatory Affairs, Office of Management and Budget,
Room 10202 NEOB, 725 17th Street, NW., Washington, DC 20503.
FOR FURTHER INFORMATION CONTACT: Ted Gerarden, Office of Market
Oversight and Investigations, Federal Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426, Ted.Gerarden@ferc.gov or (202)
502-6187; Rafael Martinez, Office of Market Oversight and
Investigations, Federal Energy Regulatory Commission, 888 First Street,
NE., Washington, DC 20426, Rafael.Martinez@ferc.gov or (202) 502-6336.
SUPPLEMENTARY INFORMATION: This reporting requirement is intended to
determine whether the Policy Statement on Natural Gas and Electric
Indices, 104 FERC ] 61,121 (July 24, 2003), is having the desired
effect of encouraging more voluntary reporting of energy trade data to
support the formation of accurate, reliable and transparent prices for
natural gas and electricity.
Price indices are widely used in bilateral natural gas and electric
commodity markets to track spot and forward prices. Uncertainty over
industry expectations and government regulatory guidelines, however,
has inhibited the number of transactions voluntarily reported to index
developers, resulting in a lack of confidence in the reliability of
energy price indices. The Commission determined that steps were needed
to strengthen confidence in the day-ahead, month-ahead and forward
natural gas markets and the day-ahead and forward electricity markets
by encouraging comprehensive reporting of energy transactions to price
index developers and by encouraging price index developers to provide
useful information about liquidity to the industry.
The Policy Statement provided the industry with the Commission's
views on desirable characteristics of a price index and the standards
companies should use when reporting energy transactions to index
developers. In addition, the Commission adopted a ``safe harbor''
provision for market participants. If the market participants adopt and
follow the standards set out in the Policy Statement, the Commission
will presume that transaction data submitted to index developers is
accurate, timely and submitted in good faith, and the Commission will
not penalize inadvertent errors.
The Policy Statement is intended to increase voluntary
participation in the price formation process, with the expectation that
greater participation in turn will give all industry participants more
confidence in the liquidity and transparency of reported prices.
The Commission will monitor developments under the Policy Statement
closely over the next several months and assess the degree to which
voluntary reporting increases, as well as how index developers and data
providers implement the Commission's recommended standards. If
voluntary reporting does not increase to the point that indices are
sufficiently robust to support a healthy market, or if the standards
recommended by the Commission herein are not widely adopted, the
Commission will consider further action to ensure accurate, dependable,
and trustworthy wholesale price information.
The information collection will help the Commission understand
whether the Policy Statement standards are being adopted by the
industry and whether market participants are reporting bilateral energy
transactions to any greater degree than before the Policy Statement was
issued. The information reported will be of a general nature,
concerning each respondent's practices with respect to reporting energy
trade information. The survey will not seek specific trade data.
The information to be collected will assist the Commission to
determine whether the Policy Statement is having a beneficial effect
and, if not, what further steps the Commission can take to encourage
voluntary participation in price formation or to mandate price
reporting. This information will enable Commission staff to carry out
the mandate of the Policy Statement to monitor price formation for
natural gas and electricity.
The Commission needs to gauge reaction to the Policy Statement more
quickly than this in order to determine whether further steps are
needed to increase the accuracy, reliability and transparency of price
indices before the winter heating season. The industry has made it
clear to the Commission that the issue of price formation is of
critical importance and that time is of the essence in providing
administrative guidance that will improve the current situation.
Nature of Information Collection: The survey will be sent to no
more than 300 market participants. The participants selected will
include producers, generators, marketers, industrial users, and
commercial customers for natural gas and/or electricity. The companies
will be sellers or purchasers of large quantities of energy likely to
engage in multiple transactions at different locations to market
natural gas and/or electricity or to serve their energy needs. The
companies will be ones that engage in bilateral arm's length energy
trades in the physical (cash) markets. Entities that trade in financial
instruments only will not be included in the survey.
The survey consists of 20 questions, ten concerning current
activity since issuance of the Policy Statement and ten parallel
questions concerning activity before the Policy Statement. The survey
seeks information about whether the participant engaged in bilateral
energy trades and, if so, whether the participant trades in natural gas
or electricity (or both). The survey asks the participant whether it is
currently reporting trade data and, if not, why not, and whether few,
some, many, or all trades were reported.
The survey asks how the participant reports trade data and what
elements of trade information are reported. The survey asks the
participant if they have adopted the guidelines for trade data
reporters in the Policy Statement and, if so, to provide information to
the Commission about the standards of conduct adopted. The survey
consists primarily of ``yes/no'' questions or multiple choice
questions, but respondents may also provide a narrative response to any
question.
The Commission proposes to collect information from the surveyed
market participants two times: an initial response due October 1, 2003
and a supplemental response due March 1, 2004. The supplemental
response is to determine whether there have been any changes from the
initial response. This followup is necessary to determine whether the
Policy Statement is having the desired effect of encouraging more
voluntary reporting of price information to price index developers.
Background: The Commission's statutory obligations under the
Natural Gas Act (NGA), 15 U.S.C. 717, the Natural Gas Policy Act
(NGPA), 15 U.S.C. 3301, and the Federal Power Act,
[[Page 53361]]
16 U.S.C. 791, are to maintain just and reasonable rates for
jurisdictional sales of natural gas and electricity and for natural gas
transportation and power transmission, to protect consumers of natural
gas and electricity from the exercise of monopoly power, and to
establish a regulatory framework that improves the competitive
structure of the natural gas and electric power industries. The current
regulatory model is a hybrid that has evolved from total regulatory
control of monopoly interstate natural gas pipelines and electric
transmission facilities to a regulatory environment that fosters
competition.
In this environment, the wholesale markets must be structured to
promote competition. Robust price formation is a key element of such
markets. Under market-based pricing, the Commission must ensure that
wholesale prices for natural gas and electricity are formed in a robust
market with sufficient information available to all participants to
permit them to judge the liquidity of markets and accuracy of the
prices reported.
To enable the Commission to fulfill this duty, the NGA, the NGPA,
and the FPA all authorize the Commission to conduct investigations and
collect information. In this case, the information relates to whether
market participants are helping in price formation. In other words, the
survey asks market participants whether they are reporting their energy
trades to a developer of commercially available price indices or
trading or having trades confirmed on electronic exchanges that
generate indices from such electronic trades or confirmations.
Information Collection Statement: The Paperwork Reduction Act of
1995, 44 U.S.C. 3507, and Office of Management and Budget (OMB)
implementing regulations at 5 CFR 1320.10 require OMB to approve
certain reporting and recordkeeping requirements (collections of
information) imposed by a federal agency. Upon approval of a collection
of information, OMB will assign an OMB control number and an expiration
date.
The proposed information collection request will be done in a two-
stage survey (OMB Control No. to be assigned). The respondents will
include producers, generators, marketers, industrial users, and
commercial customers. Responses to the information collection request
will be voluntary.
Burden Statement: The maximum public reporting burden for this
collection is estimated as:
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Supplemental
Information item Initial response response
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Number of respondents............. 300 300
Number of hours per respondent.... 5 2
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Total hours................. 1,500 600
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Grand total hours........... ................. 2,100
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Cost to respondents:
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Person hours per year Estimated salary per
Total hours burden all respondents \1\ year \2\ Total cost
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2,100............................. 1,040 $117,041 $236,332.79
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\1\ Because this information collection has been submitted for approval under OMB's emergency processing
procedures, the Commission will only collect data for a six month period. As a result, for computation of the
work hours per year factor, the hours have been cut in half.
\2\ Because of the variation of salaries for professional and clerical staff among the respondents and in order
to use an average, the Commission is assuming that the ``salary'' per employee within the energy industry is
comparable to that of the Commission staff. This average takes into account the salaries and benefits of
professional, clerical, and technical staff.
The average cost per respondent is $787.77.
Comments are invited on: (1) Whether the proposed collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information will have practical
utility; (2) the accuracy of the agency's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; (3) ways to enhance the quality,
utility and clarity of the information to be collected; and (4) ways to
minimize the burden of the collection of information on those who are
to respond, including the use of appropriate automated, electronic,
mechanical, or other technological collection techniques or other forms
of information technology e.g. permitting electronic submission of
responses. Interested persons may send comments regarding these burden
estimates or any other aspect on the proposed information collection,
including suggestions for reductions of burden, to the FERC Desk
Officer, Office of Information and Regulatory Affairs, Office of
Management and Budget, Room 10202 NEOB, 725 17th Street, NW.,
Washington, DC 20503, phone (202) 395-7318 or by fax at (202) 395-7285.
A copy of any comments filed with OMB should also be filed with the
Commission. Comments may be filed electronically via the eFiling link
on the Commission's Web site at http://www.ferc.gov . Commenters unable
to file comments electronically must send an original and 14 copies of
their comments to: Federal Energy Regulatory Commission, Office of the
Secretary, 888 First Street, NE., Washington, DC 20426.
Document Availability: In addition to publishing the full text of
this document in the Federal Register, the Commission also provides
interested persons an opportunity to inspect or copy contents of this
document during normal business hours in the Public Reference Room at
888 First Street, NE., Room 2A, Washington, DC 20426. Additionally,
comments may be viewed and printed remotely 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
[[Page 53362]]
Street, NE., Room 2A, Washington, DC 20426.
Magalie R. Salas,
Secretary.
[FR Doc. 03-23158 Filed 9-9-03; 8:45 am]
BILLING CODE 6717-01-U