FERC adopts rule restricting multiple affiliate bidding in pipeline open seasons

On 17 November 2011, the Federal Energy Regulatory Commission (FERC or "Commission") adopted a final rule that prohibits natural gas pipeline customers from using multiple affiliates to submit bids in a pipeline open season for the purpose of obtaining a larger pro rata share of capacity. Under this rule, multiple affiliates are prohibited from bidding in a pipeline open season in which capacity may be allocated on a pro rata basis, unless each affiliate has an independent business reason for submitting a bid. The adoption of this final rule is the latest chapter in a series of FERC actions relating to multiple affiliate bidding in open seasons, which began in 2009 when the agency approved enforcement settlements with several shippers for alleged energy market manipulation in connection with their bidding on an oversubscribed open season on Cheyenne Plains Natural Gas Company, LLC.

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