GAS PIPELINES. Noting a move toward shorter-term contracts since Order 636, the FERC on July 29 issued an "integrated package" of reform proposals for the natural gas pipeline...
to be done? Simply let the market work.
Senior Vice President
C.C. Pace Resources, Inc.
The electronic exchange of pipeline information has come a long way during the past 18 months. Substantial challenges have been overcome and many initial worries have not materialized. The people involved in the process should be thanked for their efforts.
Unfortunately, the challenge of modernizing the gas industry has just begun. Integrated pipeline and supply information will be essential to the industry's ability to tap into its potential in the electric sector. Having multiple pipelines running their own bulletin boards will not suffice for the long term, and the work of GISB to improve this situation will be essential to the health of the industry.
The challenge will lie in adopting standards and using information that is in the common good but potentially at odds with individual objectives. The gas industry has had a history of fighting over self-interest while opportunities pass by. Hopefully we are on a different track this time and will reap the rewards of a common challenge.
Chairman & President, National Registry of Capacity Rights, Inc.
President, TransCapacity Limited Partnership
The family sleeps soundly through the cold December night. In the basement, the natural gas used that day is measured according to a preset timer. Then, silently and reliably, that information is transmitted and soon becomes part of an automated purchase, nomination, confirmation, delivery, and billing process that covers all the gas used to fire the furnace, heat the water, run the dryer, cook the food, and light the lantern at the end of the lane. Tomorrow morning, mom will punch the display button, view the gas bill, look at the coupon from yet another gas company urging her family to switch for savings, and remember the cozy feeling TV ad as she decides to arrange to switch to a different gas vendor.
Farfetched? Not really. Clearly, consumer choice at the homeowner level is a prerequisite. Once consumers in any city or state have the opportunity to deal directly with even one gas supplier other than the local gas company, consumer choice at the retail level will be irreversibly established. The impediments that prevented an individual from perfectly reproducing, by contract, the firm, flexible gas service they currently receive from the LDC no longer exist. It's no longer technology. It's no longer the federal government. It's now the local contracts and tariffs.
Once things get moving, consumers of gas, like consumers of every other thing, will want information. In this age of home shopping, cell phones, ATMs, VANs, Nets, and Webs, the consumer will logically look to any number of online, independent, accurate, timely information and transaction service providers, such as the National Registry/TransCapacity strategic partnership.
Can the gas industry handle this? Almost. The hottest topic in the gas business today is a standard gas purchase and sale agreement, complete with an EDI term sheet and provisions for electronic signatures. The next hottest topic is EDI (em short for everybody's doing it: purchase orders, confirmations, scheduled volumes, statements of