INGAA comments on a Federal Energy Regulatory Commission (Commission) proposal to revise its Part 284 regulations to prohibit multiple affiliates of the same entity from bidding in an open season for pipeline capacity in which the pipeline may allocate capacity on a pro rata basis, unless each affiliate has an independent business reason for submitting a bid. The Commission also proposed that if more than one affiliate of the same entity participates in such an open season, then none of those affiliates may release any capacity obtained in that open season pursuant to a pro rata allocation to any affiliate, or otherwise allow any affiliate to obtain the use of the allowed capacity. These proposals, according to the Commission, are intended to prevent anticompetitive gaming of the pro rata allocation methodology by using multiple affiliates of the same entity to acquire a larger share of the available capacity than one affiliate would be able to acquire by itself.
In its comments, INGAA expresses no opinion on whether or not the Commission’s NOPR is necessary or whether the behavior the Commission seeks to regulate is anticompetitive.
INGAA comments that if the Commisison promulgates a final rule it should specify that interstate pipelines have no obligation to determine whether affiliated entities are participating in an open season or whether each affiliate has “an independent business reason for submitting a bid,” and that interstate pipelines have no obligation to verify that the capacity originally obtained during an open season pursuant to a pro rata allocation is not released to, or on behalf of, an affiliate of the releasing shipper.
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