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Regulations Governing the
Conduct of Open Seasons
for Alaska Natural Gas
Transportation Projects
Federal Energy Regulatory Commission
February 9, 2005
Agenda Item C - 1
FERC
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Alaska Natural Gas Pipeline( primary mainline to lower-48 )
FERC
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• Open season regulations to be issued in 120 days
• Regulations must cover procedures for the allocation of capacity and criteria for and timing of any open seasons
Alaska Natural Gas Pipeline Act Open Season Provisions
FERC
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• Regulations must promote competition in the exploration, development, and production of Alaskan natural gas
• Expansion open seasons must provide the opportunity for the transportation of natural gas other than from the Prudhoe Bay and Point Thomson Units
Alaska Natural Gas Pipeline Act Open Season Provisions
FERC
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The open season regulations apply
to any initial or voluntary
expansion capacity on any
Alaskan natural gas transportation
project
Alaska Natural Gas Pipeline Act Open Season Provisions
FERC
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10/13/04 – Alaska Natural Gas Pipeline Act
11/15/04 – Commission issues NOPR
12/3/04 – Public technical conference in Anchorage, Alaska.
by 2/10/05 – Commission issues final rule
Open Season Rulemaking Schedule
FERC
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Open Season Process in NOPR
• Detailed project information given to the public 30 days before open season
• Open season held for at least 90 additional days
• Capacity awarded without undue discrimination or preference of any kind
FERC
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Changes to NOPR(as a result of public comments)
• Recognition of Alaskan in-state needs– In-state capacity, delivery points and transportation rates based on in-state study
–Separate bidding on specified in-state capacity
FERC
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Changes to NOPR(as a result of public comments)
• Prevention of Undue Discrimination or Preference
– Standards of Conduct of Order 2004 APPLY– Prospective applicant must create or designate
an independent unit or division for open season– Alaska natural gas production affiliates identified– Information made available to any potential
shipper must be made available to all potential shippers
FERC
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Changes to NOPR(as a result of public comments)
• Capacity Allocation– Pre-subscriptions (anchor shippers) are
allowed only for initial capacity – Pre-subscription agreements must be
made public within 10 days and all other bidders have choice of best pre-subscription terms
– Pre-subscription capacity will be subject to pro-rata reductions
FERC
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Changes to NOPR(as a result of public comments)
• Capacity Allocation (con’t)– Qualified bids made after the open
season to be considered
– Results of the open season to be made public within 10 days
– Copies of all accepted precedent agreements filed with the Commission within 20 days
FERC
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Changes to NOPR(as a result of public comments)
• Pre-filing, Project Design & Expansions– Prospective applicant’s pre-filing of its
open season proposals– The Commission will consider how
project design considers the capacity needs of initial and future shippers
FERC
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Policy Considerations
• Balance encouragement of project construction with fair and open competition
• Rebuttable presumption for rolled-in rate treatment of costs of expansions
• Balance appropriate oversight with letting market forces work