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FERC Issues Notice of Inquiry Responding to “Junk and Jewel” Petition

By Sydney Novoa posted 24 days ago

  
On March 21, the Federal Energy Regulatory Commission (FERC) issued a Notice of Inquiry (NOI) seeking information concerning a bidding practice of interstate natural gas pipelines, sometimes referred to as “junk and jewel.” FERC is hoping for comment on whether this practice should continue to be allowed.

As stated in a petition to FERC in 2022, many pipelines have been packaging high-value capacity (the “jewel”) with non-contiguous and operationally unrelated, low-value capacity (the “junk”) together in single auctions.  This practice has the potential to result in unjust rates for the shippers looking to acquire the valuable capacity or, as is the case for many APGA members, discriminates against certain shippers who do not have the resources to bid for capacity that they cannot utilize. The petition argued that “junk and jewel” postings could interfere with market pricing and reduce the desire for pipelines to build additional capacity that public gas utilities, as well as investor-owned utilities and large gas consumers, need. FERC issued the NOI in response to the 2022 petition, which was filed jointly by APGA, American Gas Association (AGA), National Gas Supply Association (NGSA), and the Process Gas Consumers Group (PGC).

APGA and the other petitioners are hopeful FERC will review comments received in response to the NOI and reconsider its current policy of permitting this practice.  APGA also hopes the NOI process helps FERC consider what regulatory, economic, or policy goals may be achieved by modifying the policy.

To see the issued NOI, click here. To see a copy of the petition that was filed, click here.

APGA will continue to work on this issue and will inform members of any future actions by FERC. For questions on this article, please contact Sydney Novoa of APGA by phone at 202-464-0834 or email at snovoa@apga.org.

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