Urging the Federal Energy Regulatory Commission
To Allow States To Retain Maximum Flexibility For Regulating
Local Distribution Companies In Its Rulemakings on Short-Term and Long-Term
Transportation Services, Docket Nos. RM98-10 and RM98-12

WHEREAS, the Federal Energy Regulatory Commission (FERC) has issued two complementary notices: 1) Docket No. RM98-10, a Notice of Proposed Rulemaking (NOPR) entitled “Regulation of Short-Term Natural Gas Transportation Services”; and 2) Docket No. RM98-12, a Notice of Inquiry (NOI) entitled “Regulation of Interstate Natural Gas Transportation Services,” which concerns the FERC’s policies governing the long-term market for transportation;

WHEREAS, many of the FERC’s proposals are designed to: 1) foster competition for interstate pipeline services in all geographic markets; and 2) promote the unbundling of retail sales service by local distribution companies (LDC’s);

WHEREAS, in many areas of the country, LDC’s are served by one pipeline that is able to wield monopoly market power;

WHEREAS, in areas where LDC’s are captive customers of interstate pipelines, it is essential that the FERC retain vigorous regulation of pipelines to protect consumer interests;

WHEREAS, the FERC should recognize that the adoption of measures that attempt to allow competitive forces to set prices may not be appropriate for all areas of the country due to the ability of interstate pipelines to exercise market power in certain geographic markets;

WHEREAS, the decision of whether or not to engage in retail unbundling is appropriately the preserve of state regulatory agencies; and

WHEREAS, the FERC should adopt rules and policies that maintain maximum flexibility for state decision making regarding retail unbundling.

THEREFORE BE IT RESOLVED, that the National Association of State Utility Consumer Advocates (NASUCA) calls upon the FERC to refrain from adopting policies that presume as appropriate for all geographic markets of the country, an absence of the ability of interstate pipelines to wield market power over long term or short term transactions.

BE IT FURTHER RESOLVED, that NASUCA calls upon the FERC to recognize the impact of changes in its policies on the states’ decisions regarding retail unbundling, and to adopt policies that maintain maximum flexibility for state decision making on this issue.

BE IT FURTHER RESOLVED, that NASUCA authorizes the Executive Committee to develop specific positions and to take appropriate actions consistent with the terms of this resolution. The Executive Committee shall advise the membership of any proposed action prior to taking such action if possible. In any event, the Executive Committee shall notify the membership of any action taken pursuant to this resolution.

Approved by NASUCA:

Submitted by: NASUCA Gas Committee

Orlando, Florida

November 11, 1998