Gas Rule
The Commission voted out a draft Gas Rule today (Rm98-10/RM98-12).  Based on 
the discussion, the rule contains the following major provisions:

Waiver of Capacity Release Price Caps.  A waiver of the price cap on 
short-term (1 year or less) capacity release transactions through September 
2002.  Hebert would have preferred a permanent removal of the price cap.
Seasonal Rates.  A framework for pipelines to propose peak & off-peak rates 
for short-term services.  Pipelines would make pro forma filings.  The 
Commission commits to act on the filings within 60 days.  There would be a 
requirement to make a cost and revenue study after 15 mo. to demonstrate 
whether there are overcollections as a result of the seasonal rates.  Any 
overcollections would be shared 50-50 with customers.
Term Differentiated Rates.  Approval of the concept of term-differentiated 
rates, subject to the requirement that a pipeline would have to make a 
Section 4 filing to implement term-differentiated rates.
Operational Provisions.  Scheduling/segmentation/penalty rules along the 
lines set forth in the NOPR, including:  (1) equality of scheduling between 
capacity release and pipeline services, (2) standardization of segmentation 
rules, (3) moving away from "command and control" imbalance/OFO provisions in 
favor of new services and better information  to manage imbalances, and (4) a 
requirement to credit remaining penalty revenues.
Real-time Reporting.  Transactional data would be electronically posted on a 
real-time basis.
Right of First Refusal.  The rule continues a ROFR for all existing long-term 
contracts with the 5-year matching cap, subject to the following revisions: 
(1) for future contracts, only contracts of more than 1 year at maximum rates 
will have the ROFR (i.e. discount rate contracts will not enjoy ROFR), and 
(2) on systems with incremental rates, a customer exercising ROFR may be 
required to match the incremental rate, but these provisions will not take 
effect until a pipeline has made a Section 4 filing to determine the correct 
rate for ROFR on a particular system.  
Not Included in the Rule.  The rule does not have a mandatory auction 
requirement, although voluntary auctions are discussed. The rule does not 
authorize negotiated terms.


Clarification of Certificate Policy Statement/NOPR to Eliminate Optional 
Expedited Certificates
The Commission proposed to eliminate OEC in favor of a single framework for 
all Section 7 certificates.  During the
pendency of the NOPR, OEC would still enjoy a presumption that the facilities 
are in the public interest, but the factors set forth in the Policy Statement 
may be used to rebut the presumption.

With respect to the Certificate Policy statement, the Commission generally 
sticks with the policy in the September order.  It reaffirms the no subsidy 
policy, provides guidance on projects that are a combination 
expansion/existing system, clarifies that Memphis clauses can still be used 
in expansion contracts (although the FERC doesn't necessarily think its the 
best way to allocate risks), and discusses ROFR in the expansion context.  It 
does not appear that the clarification addresses the issue of timing of 
applicability.


Keep in mind that this summary is based only on the open discussion.  A 
written copy of the rule is not yet available.  I will send a more detailed 
review once I have seen the rule.