US FERC proposes gas pipe reporting rules as storm season begins

Washington (Platts)--12Jun2006

With Hurricane Alberto heading for the Florida Gulf Coast, the US Federal
Energy Regulatory Commission has proposed new gas pipeline reporting rules
that would provide it with more information about pipeline damage and service
interruptions.

The proposed rule would require companies to report pipeline damage that
results in a loss of or reduction in service and when service has been
restored. Under existing regulations, a company is only required to report
when it experiences a serious service interruption.

Transportation service interruptions are sometimes avoided by rerouting
supplies through other pipelines or through other delivery arrangements, FERC
said in a notice of proposed rulemaking, but those actions go unreported to
the agency charged with overseeing the US pipeline system.

In the aftermath of Hurricanes Katrina and Rita, companies kept the
commission apprised of service interruptions as required under current law,
staff said in the proposal. Yet "vital information regarding the physical
condition of facilities affecting operation of the pipeline grid remained
unknown to the commission," FERC said.

An information gap occurred after the 2005 storms for a variety of
reasons, the commission said: FERC only required reporting of interruptions to
firm service lasting more than three hours; pipelines and shippers adjusted
nomination schedules; and pipelines were able to meet service obligations
through rerouting flows and drawing upon storage.

During post-hurricane efforts to collect energy infrastructure data, FERC
said it took "ad hoc steps" to collect data about the operation of major
pipelines, such as informally requesting data from companies and industry
trade groups.

"The commission has regulations in place and can grant appropriate
waivers for natural gas companies to undertake necessary construction
activities in crisis situations," FERC said. "However, the commission's
current reporting requirements are not adequate to permit a reliable
'snapshot' of the natural gas infrastructure at any given time."

The revised rule would require natural gas companies to report, among
other things: the cause and location of a service interruption or damage to a
pipeline or its facilities; customers affected by the service interruption or
damage to gas facilities; and emergency actions take to maintain service.

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