Mark, our contracts at Sumas (which is a U.S. border delivery point in British Columbia) are settled against the Inside F.E.R.C. Sumas Index.  Inside F.E.R.C. is now requiring that, in addition to pure trading data, we must also provide counterparty identification.  On the basis that we cannot provide that counterparty identification, both due to contractual obligations and business policies/practices, our information was excluded from the Sumas Index for the last index period.  I know, for example, in negotiating the settlement with NGX, that the provision of counterparty identification was a matter of very serious concern, particularly for Andy Zipper who manages EOL.

However, I am advised by Jon McKay that, notwithstanding these apparent contractual restrictions and business policies/practices, Houston provides counterparty identifications to Inside F.E.R.C.

The problem is that if we do not provide these counterparty identifications, our information will be excluded from the Sumas Index, which is particularly problematic with Sumas already being a relatively illiquid point.  On the other hand, if we do provide counterparty identification, we run the risk of breaching confidentiality obligations, business policies/practices and upsetting our trading counterparties.

I guess we have two alternatives, one is to continue to not disclose counterparty identifications and hope that Inside F.E.R.C. will change its view on this (although, as I mentioned, their position is that Houston provides them with that information), or provide counterparty identifications at the risk of getting offside our counterparties.

My preference would be to do the former, but I think this is a matter you may want to review with Lavo and let me know how Houston intends to proceed.

Regards,
Peter