Deb Macdonald, President of Kinder Morgan's Natural Gas Pipeline of America
Mark Hand is senior editor at Public Utilities Fortnightly.
How has NGPL attracted new customers after losing some of your long‑term contracts over the past few years?
Traditionally, NGPL focused almost exclusively on the Chicago marketplace where our major LDC customers were. Obviously, the industry has changed substantially and your customer mix needs to change substantially as the industry changes. While our big four LDCs [Nicor, Peoples Energy, MidAmerican Energy, NIPSCO] are still very, very important customers, we went out after other customer groups.
Specifically, we've been able to align ourselves with very strong merchant energy companies and convince them to take services on the system. The way we've done that is we've made our contracting practices more flexible than they ever have been in the past, rather than just focusing on long‑haul transportation from the multiple production areas that we access.
How can FERC help NGPL and the pipeline industry as a whole move forward with creating a more efficient market?
The challenge for the FERC is going to be to withstand the pressure to go backwards. I think the FERC's current policies have really helped promote a very liquid natural gas market. I think if you look at the gas market across the United States, while there are some constraints, it's a very workably competitive market.
Hopefully, the situation in California and the volatility in gas prices, which I think have worked out because the market is workably competitive, won't foster any type of endeavor to backstep on how workably competitive the FERC's policies have made this market. That will be their real challenge.