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riday July 7, 11:43 am Eastern Time
Company Press Release SOURCE: Columbia Gas Transmission Columbia Gas Transmission Files Innovative Capacity Auction Process With FERC FAIRFAX, Va., July 7 /PRNewswire/ -- Continuing its quest to promote creative regulatory policies, Columbia Gas Transmission, a wholly owned subsidiary of Columbia Energy Group, has urged the Federal Energy Regulatory Commission to consider an interactive, Internet-based pipeline capacity auction process that enhances Columbia's current open auction process. In a first of its kind filing, Columbia proposes a ``bid/offer'' system for selling capacity similar to on-line natural gas commodity trading systems. The filing was made in response to customer concerns with the current process and is consistent with sentiments expressed in FERC's Order 637, which encourages companies to voluntarily submit ``new and innovative approaches'' to capacity auctions. Since the filing is not required under Order 637, Columbia's proposed auction is separate from Columbia's Order 637 compliance filing made June 15. ``Under the current mechanism, capacity is not always awarded to the party that places the highest value on it,'' said Carl Levander, vice-president of Rates and Regulatory Policy for Columbia Gas Transmission. ``Even though we conduct our current capacity auction over a five-day period, parties often wait until the last 15 minutes to place a bid. Also, since the current process is based on set time periods, customers often call us back after the auction is closed saying they valued the capacity greater than the winning bid.'' According to Levander, Columbia's proposal addresses these concerns by moving to an enhanced, Internet-based interactive auction that takes into consideration such current market conditions as daily fluctuations in capacity value and the increased level of auction activity due to shorter-term contracts. Under Columbia's proposed ``bid/offer'' system, Columbia would ``offer'' (via its electronic bulletin board) sales terms for all its available firm capacity. Customers can then match all asking sales terms for any portion of the quantity and a sale is immediate and binding. If Columbia offers discounted capacity, the customer can counter-offer with a different rate. Or, if Columbia offers maximum rate capacity, then a customer can counter-offer with a different term length. Columbia can match the highest bid, subject to a present value process, and the sale is immediate and binding. At any time before a binding sale, the customer can change or withdraw its bid. Columbia's ``bid/offer'' auction proposal meets the six basic principles outlined in FERC's Order 637. * Columbia's auction has predictable timing since the auction will begin each day at 9:15 a.m. (EST) and all available capacity will be posted prior to 8:00 a.m. (EST). * The auction will be open to all creditworthy bidders on a non- discriminatory basis. * The auction is user-friendly since it will use Columbia's existing EBB format. All information concerning rules and procedures will be made available on the Internet. * The method of selecting the best bid will be easily understood since bidders will only be able to change one variable with respect to each capacity package made available. * As is Columbia's current practice, winning bids and the bidder's identity will be posted to permit monitoring of how the selection criteria were applied. * The bidding process will be transparent to all parties since all bids (without the bidder's identity) will be available for review to all bidders through an Internet-based system. ``We believe the combination of these factors will ensure that the capacity auction format is 'transparent, verifiable, and non-discriminatory' to all parties as well as innovative in design,'' Levander said. Levander said the proposal not only meets the Commission's principles, it is based on feedback gathered from customers, who expressed a desire for transparent market information; shorter auction periods; an ability to withdraw and change bids; and a real-time, immediate closure process. Columbia Gas Transmission, with offices in Charleston, W.Va., and Fairfax, Va., moves an average of three billion cubic feet of natural gas per day to markets along a 12,550-mile pipeline network, which reaches across 10 Midwestern, Northeastern and mid-Atlantic states. The company operates one of the largest natural gas storage systems in the country with over 240 billion cubic feet (Bcf) of working capacity. Columbia Energy Group, based in Herndon, Va., is one of the nation's leading energy services companies, with assets of approximately $7 billion. Its operating companies engage in nearly all phases of the natural gas business, including exploration and production, transmission, storage and distribution, as well as retail energy marketing, propane and petroleum product sales, and electric power generation. Information about Columbia Energy Group (NYSE: CG - news) is available on the Internet at http://www.columbiaenergygroup.com. SOURCE: Columbia Gas Transmission Email this story - View most popular stories emailed More Quotes and News: Columbia Energy Group (NYSE:CG - news) Related News Categories: government, internet, oil/energy, utilities Help Copyright , 2000 Yahoo! All Rights Reserved. Privacy Policy - Terms of Service Copyright 2000 PRNewswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. Questi
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