Natural Gas Regulation

First proposed in 1986, the Iroquois pipeline is a multi-million dollar project that will transport natural gas from Canada to Long Island, New York, along the way supplying gas to parts of New England. Central to GAO's testimony is the issue of ex parte communication, which refers to a "communication not on the public record with respect to which reasonable prior notice to all parties is not given." Ex parte communications relating to the merits of agency proceedings are generally prohibited by statute, and Federal Energy Regulatory Commission (FERC) regulations prohibit its employees from requesting or entertaining prohibited ex parte communications. FERC's Office of Pipeline and Producer Regulation invited senior representatives of the pipeline sponsors to a March 1990 meeting to discuss problems associated with amendments to the applications. FERC officials learned during the meeting that Iroquois was "able and willing" to transport a volume lower than it proposed in its amended applications. In GAO's view, this goes to the heart of what FERC needed to determine in this proceeding. GAO believes that it was improper for FERC officials to request and entertain this information about the merits of an application in a meeting that was not open to all interested parties. In addition, GAO believes that the communications during the March meeting were tantamount to a request for expedited treatment, which should have been treated as an ex parte communication. Further, FERC officials at the meeting failed to prepare and file sworn statements about the prohibited communications as required by agency regulations.