On June 27, APGA jointly responded to the Federal Energy Regulatory Commission’s (FERC) Notice of Inquiry (NOI) concerning the initial “junk and jewel” petition. APGA filed jointly with the American Gas Association (AGA), National Gas Supply Association (NGSA), and the Process Gas Consumers Group (PGCG).
On March 21, FERC issued the NOI seeking information concerning a bidding practice of interstate natural gas pipelines, sometimes referred to as “junk and jewel.” This practice may result in unjust rates for the shippers looking to acquire the valuable capacity or discriminate against certain shippers who do not have the resources to bid for capacity that they cannot utilize, which is often the case for APGA members.
FERC sought comment on whether this practice should continue to be allowed, so to justify our position that it shouldn’t continue, our input included examples of numerous postings from 2023 and 2024 showing how often valuable capacity is being paired with capacity of low or no value in a single auction. The filed comments also included an affidavit from Tina Smith of the Municipal Gas Authority of Georgia, which specifically highlighted how short-term contracts would help meet long-term load growth. APGA would like to thank Tina and the Municipal Gas Authority of Georgia for their help.
The NOI was issued in response to a 2022 petition, which was also filed jointly by APGA, AGA, NGSA, and PGCG. As stated in the initial 2022 petition and restated in the recent comments, many pipelines have been and are continuing to package high-value capacity (the “jewel”) with non-contiguous and operationally unrelated, low-value capacity (the “junk”) together in single auctions.
APGA and the joint petitioners are hopeful FERC will review the comments and reconsider its policy of allowing this practice.
To read the filed comments, including the examples and affidavit, click here. To view other filed comments, click here.
To see the issued NOI, click here. To see a copy of the petition that was filed, click here.
APGA will continue to work on this issue and will inform members of any future actions by FERC. For questions on this article, please contact Sydney Novoa of APGA by phone at 202-464-0834 or email at snovoa@apga.org.