>> GOOD MORNING. I'M JANEL BURDICK IN THE OFFICE ENFORCEMENT. I WELCOME TO THE TECHNICAL CONFERENCE. WE VERY MUCH APPRECIATE THE INTEREST THAT HAS BEEN SHOWN IN THIS TOPIC, AND WE'RE LOOKING FORWARD TO HAVING A DISCUSSION WITH PANELISTS AND THANK YOU FOR ATTENDING. OUR GOAL IS TO SOLICIT FEEDBACK AND DEVELOP A RECORD ON NATURAL GAS INDEX LIQUIDITY. I'LL COVER HOUSEKEEPING ITEMS FIRST. PLEASE REFRAIN FROM EATING OR DRINKING, NO FOOD OR DRINK OTHER THAN BOTTLED WATER IN THE COMMISSION MEETING ROOM. THERE'S BATHROOMS AND WATER FOUNTAINS, TURN OFF YOUR MOBILE PHONE OR PUT THEM IN AIRPLANE MODE TO AVOID INTERFERENCE WITH AUDIO/VISUAL. WE MAY NOT NEED IT, ARRANGED FOR A SPILLOVER ROOM AND PLACE TO PUT YOUR BAGS, THE ROOM TO THE RIGHT. WE ALSO HAVE A STAFF PRESENTATION TODAY AND THREE PANELS, WE'LL BREAK FOR LUNCH AT NOON AND RECONVENE AT 1:00 FOR THE TWO FINAL PANELS. 15MINUTE BREAK BETWEEN THE AFTERNOON PANELS. PANELISTS, IF YOU COULD TURN YOUR NAME CARD UP WHEN YOU SPEAK, MAKE SURE YOU TURN ON YOUR MICROPHONE AND TURN OFF YOUR MICROPHONE WHEN YOU FINISH SPEAKING SO WE DON'T GET INTERFERENCE BETWEEN MICROPHONES. IF YOU DON'T DO THAT YOU MIGHT GET A SIGNAL FROM BEHIND THE BLACK GLASS OVER THERE TO TELL YOU TO DO WHAT YOU'RE SUPPOSED TO DO. THE SECOND CONFERENCE IS BEING TRANSCRIBED SO PLEASE SAY YOUR NAME WHEN YOU START TO SPEAK, WHEN YOU'RE NOT SPEAKING TURN OFF YOUR  OH, SORRY. PANEL DISCUSSION WILL BE BASED ON QUESTIONS POSED BY COMMISSION STAFF IN THE NOTICE. AND FINALLY DEPENDING ON THE DIRECTION THE CONVERSATION PROGRESSES WE'LL NOT NECESSARILY COVER EVERY SINGLE QUESTION IN THE NOTICE. WE HAVE MEMBERS AND STAFF WHO WILL KEEP US ON TRACK AND WE WILL ALSO BE INVITING POST TECHNICAL CONFERENCE COMMENTS IF THERE ARE TOPICS YOU WISH TO PROVIDE ADDITIONAL COMMENTS ON. NOW I'LL TURN IT OVER TO ACTING CHAIRMAN LAFLEUR FOR OPENING COMMENTS.

>> THANK YOU VERY MUCH, JANEL. THANK YOU FOR BEING HERE. IT'S GOOD TO SEE SUCH A GREAT TURNOUT AND I APPRECIATE THE PANELISTS THIS MORNING AND THE REST OF THE DAY FOR BEING HERE WITH US. NICE TO BE HERE WITH COMMISSIONER HONORABLE, AFTER ALL THE GOOEY WORDS LAST YEAR ABOUT HOW  LAST WEEK ABOUT HOW IT WAS OUR LAST TECH CONFERENCE TOGETHER, FORGOT TODAY. MAYBE WE CAN PULL TOGETHER A TECH CONFERENCE TOMORROW TO GET YOU ONE MORE TIME. TODAY'S CONFERENCE IS GOING TO HELP US TO DEVELOP A RECORD ON THE ROLE OF NATURAL GAS PRICE INDICES IN FERC JURISDICTIONAL MARKETS. WE KNOW A LOT OF AGENCIES HAVE THINGS TO DO WITH PRICE INDICES, CFTC AND FERC, OUR FOCUS IS ON THE IMPACT THEY HAVE ON THE MARKETS AND OUR SETTING JUST AND REASONABLE PRICES. AND WHAT WE'LL BE LOOKING AT IS HOW THEY ARE WORKING IN THE MARKETS AND WHETHER THERE ARE CHANGES WE SHOULD CONSIDER. I WANTED TO SET THE STAGE A LITTLE BECAUSE THERE'S BEEN A LITTLE CONCERN ABOUT DO WE HAVE SOME PLAN OF WHAT WE'RE GOING TO DO AND WE REALLY HAVE AN OPEN MIND ON THIS. BUT I THINK IT'S SOMETHING THAT'S ENTIRELY APPROPRIATE FOR US TO BE LOOKING AT BECAUSE THE MARKETS WE REGULATE ARE SO DEPENDENT ON ROBUST AND PROPER NATURAL GAS INDICES IN ORDER TO SET JUST AND REASONABLE PRICES. 80%  APPROXIMATELY 80% OF TARIFFS SET UNTO THE NATURAL GAS ACT REFER TO THESE INDICES SO THE ROBUSTNESS IS IMPORTANT TO THOSE TARIFFS BEING FAIR, AND WITH ALL THE INTERDEPENDENCY OF GAS AND ELECTRICITY, THEY ARE INCREASINGLY USED TO SET ELECTRIC PRICES INCLUDING IN MITIGATION RULES AND CALCULATION OF THE COST OF NEW ENTRY, AND SETTING FUEL COSTS FOR OTHER REASONS IN THE ELECTRIC MARKETS. SO IT'S VERY IMPORTANT THAT IF WE'RE GOING TO SO HEAVILY RELY ON THESE INDICES THEY BE ROBUST AND WORKING WELL. I LOOK FORWARD TO A GOOD DISCUSSION TODAY. WE WERE ABLE TO ATTRACT BIG EXPERTS ON THIS. I LITERALLY JUST WALKED IN FROM MEXICO CITY, MY BAGS ARE IN THE GREEN ROOM BEHIND ME SO I WON'T STAY FOR THE DAY BUT WILL BE VERY INTERESTED IN THE RESULTS. WE HAVE THE SMART PEOPLE IN FRONT OF US AND BEHIND US, AND THE RECORD, NOT ONLY WHAT WE'LL HEAR TODAY BUT I DO INVITE COMMENTS FROM ANYONE WHO HAS AN INTEREST IN THIS TOPIC WHO WASN'T INVITED TO PARTICIPATE, WE'RE VERY INTERESTED IN WHAT YOU HAVE TO SAY BECAUSE WE KNOW THIS TOPIC TOUCHES A LOT OF PEOPLE. SO THANK YOU VERY MUCH.

>> THANK YOU, ACTING CHAIRMAN LAFLEUR. COMMISSIONER HONORABLE?

>> JANEL, GOOD MORNING, EVERYONE. GREAT TO SEE SUCH A WONDERFUL ROOM. THANK YOU FOR YOUR INTEREST IN THIS ISSUE. I WANT TO THANK JANEL AND THE ENTIRE FERC TEAM FOR PULLING THIS TOGETHER. GOOD MORNING, MARISA. WE HAVE BEEN WORKING ON THIS ISSUE, I WOULD SAY, OVER THE COURSE OF MY TENURE HERE, AND IN PART IT'S BECAUSE OF THE MEN HERE AND MEN AND WOMEN, EITHER IN THE AUDIENCE SECTION OR WATCHING ON THE WEBCAST. THANK YOU FOR ALL THAT YOU'VE DONE TO EDUCATE US, NOT ONLY ABOUT HOW THE INDICES ARE WORKING, HISTORY OF THEM, BUT ALSO HOW WE CAN IMPROVE THIS PROCESS TO PROVIDE GREATER TRANSPARENCY AND CERTAINTY. SO YES, THIS IS MY LAST FERC TECHNICAL CONFERENCE, I BELIEVE, UNLESS THERE'S ANOTHER ONE THAT APPEARS TOMORROW.

>> AS A COMMISSIONER, NOT YOUR LAST AT ALL.

>> THANK YOU FOR THAT. I WILL BE BANISHED, I THINK, FOR A COUPLE OF YEARS, AND THEN I'LL RESURFACE HERE. SO REALLY I'M PLEASED AS I'M LITERALLY HEADED OUT THE DOOR THAT I COULD ALSO JOIN CHAIRMAN LAFLEUR, I AGREE WITH CHERYL'S COMMENTS IN TOTAL BECAUSE THIS IS AN IMPORTANT ISSUE AND IMPORTANT THAT NO MATTER WHEN WE TAKE IT THAT WE DO IT AND EDUCATE OURSELVES AND THE SECTOR ABOUT THE STATE OF PLAY, WHERE WE ARE NOW AND MORE IMPORTANTLY WHERE WE NEED TO BE HEADED. SO I DO WANT TO EXPRESS APPRECIATION TO THE FERC STAFF, OUR TEAM, MAHONEY IS TAKING THE LEAD IN MY OFFICE. SINCE I BEGAN HERE MY FIRST MEETINGS WERE WITH YOU ALL AND YOU RAISED SOME OF THESE ISSUES FOR OUR CONSIDERATION AND EDIFICATION, AND I GREATLY APPRECIATE IT. WE'RE HERE TODAY TO DISCUSS LIQUIDITY IN THE PHYSICAL NATURAL GAS MARKETS, AND WE ARE DEVELOPING A RECORD TO DETERMINE WHERE WE ARE AND REALLY HOW WE GOT TO THIS PLACE, AND I KNOW THAT THE MEN BEFORE US WILL HELP SHED SOME LIGHT ON THAT AND WHAT OUR NEXT STEPS SHOULD BE. I AGREE THAT THERE IS GREATER RELIANCE ON INDICES TODAY THAN IN THE PAST, AND IT'S IMPORTANT THAT THESE INDICES WORK AS INTENDED TO PROVIDE AS I MENTIONED BOTH TRANSPARENCY AND CERTAINTY AND ROBUSTNESS NEEDED TO ENSURE MARKETS ARE OPERATING AS INTENDED. ALTHOUGH I WON'T BE HERE TO SEE THE RESULTS OF THE CONFERENCE AS CHERYL MENTIONED, WE ARE CREATING A RECORD SO WHETHER YOU ARE PARTICIPATING IN THE TECH CONFERENCE TODAY OR YOU WOULD LIKE TO SUBMIT COMMENTS, PLEASE DO. AND I WANT TO THANK EACH OF YOU FOR THE WAYS IN WHICH YOU CONTINUE TO EDUCATE POLICYMAKERS AND REGULATORS ABOUT THIS IMPORTANT WORK. I WANT TO SINGLE OUT ORLANDO ALVAREZ FOR YOUR DOGGED DETERMINATION AND MAKING SURE THAT THIS GOT OUR ATTENTION AND NO GOOD DEED GOES UNPUNISHED. THAT'S WHY YOU'RE SITTING AT THE TABLE. ON A CLOSING NOTE THANK YOU FOR THE WORK YOU DO EVERY DAY. IT'S BEEN A PLEASURE. WE WON'T BE MUSHY HERE TODAY BECAUSE WE'VE DONE THAT ALREADY. AND I TOO WILL HAVE TO GO ABOUT, SO CHERYL IS COMING BACK WITH BAGS, I'M GOING TO START PACKING BOXES WHICH IS A SAD BUT CERTAIN TASK THAT WE ALL MUST TAKE UP IN TRANSITION, BUT I WANT TO THANK YOU AND I LOOK FORWARD TO REVIEWING THE TRANSCRIPT OF THIS TECHNICAL CONFERENCE. THANK YOU.

>> IN CASE I'M NOT HERE, I ALSO WANT TO THANK STAFF FOR ALL THE WORK IN PULLING THIS TOGETHER. I KNOW WE TALKED A LOT ABOUT WHEN WE SHOULD DO IT. I SERIOUSLY THOUGHT, TO BE HONEST, BY NOW WE WOULD HAVE A WHOLE PANEL OF COMMISSIONERS HERE, BUT I'M VERY GLAD WE'RE DOING IT TODAY NONETHELESS, AND THANK YOU VERY MUCH.

>> THANK YOU, COMMISSIONERS. TO BEGIN I'D LIKE TO HAVE THE STAFF AT THE TABLE INTRODUCE THEMSELVES.

>> GOOD MORNING, JAMIE MARCOK, DEPUTY DIRECTOR.

>> GOOD MORNING, CHRIS ELLSWORTH IN THE DIVISION OF ENERGY MARKET, OFFICE OF ENFORCEMENT.

>> GOOD MORNING, DAVID MIRANDA, OFFICE OF GENERAL COUNSEL, ENERGY MARKETS.

>> GOOD MORNING, ELIZABETH THURBEE.

>> CAROLINE WOZNIAK.

>> SEAN COLLINS, ANALYTICS AND SURVEILLANCE, OFFICE OF ENFORCEMENT.

>> ADAM BENARSIK DIVISION OF ENERGY MARKET OVERSIGHT OFFICE OF ENFORCEMENT.

>> TOM KINGSTON BRANCH CHIEF NATURAL GAS SURVEILLANCE OFFICE OF ENFORCEMENT.

>> MELISSA LOZANO, DIVISION OF ENERGY MARKET OVERSIGHT DEPUTY DIVISION.

>> MATT DOYLE, WITH THE DIVISION OF ENERGY MARKET OVERSIGHT AND OFFICE OF ENFORCEMENT.

>> ERIC PROMAST, DIVISION OF ENERGY MARKET OVERSIGHT.

>> ERIC AND MATT WILL START BY GIVING US A PRESENTATION ON ANALYSIS THEY HAVE DONE ON THE FERC 552 DATA AND ANALYSIS ON INDICES THAT APPEAR IN COMMISSION JURISDICTIONAL TARIFFS. I'D LIKE TO RECOGNIZE THE PEOPLE NOT AT THE TABLE, ADAM BENNETT, AL PADRON, KATHERINE, OMAR, MIKE AND SARAH McKINLEY. THANK YOU FOR YOUR HELP IN GETTING READY FOR THIS TECH CONFERENCE. NOW I WILL HAND OFF TO ERIC.

>> TODAY'S PRESENTATION WILL COVER THREE TOPICS. FIRST, WE WILL PROVIDE AN OVERVIEW OF THE FERC FORUM 552 COMMISSION FOR 2016 AND RECENT TRENDS. SECOND WE'LL PRESENT OUR ANALYSIS OF NATURAL GAS INDEX LIQUIDITY AS RELATES TO STANDARDS SET OUT IN THE 2004 PRICE INDEX ORDER. FINALLY, WE WILL DISCUSS OUR ANALYSIS OF PHYSICAL NATURAL GAS INDICES REFERENCED IN COMMISSIONAPPROVED TARIFFS. ON MAY 1 OF EACH YEAR INFORMATION IS COLLECTED USING FERC FORM NUMBER 552. THE DATA THE MARKET PARTICIPANTS SUBMIT USING THIS FORM PROVIDES INFORMATION ON THE OVERALL SIDES OF TRADED PHYSICAL NATURAL GAS MARKET, VOLUME OF PHYSICAL NATURAL GAS BOUGHT OR SOLD AT FIXED PRICE OR PHYSICAL BASIS AND VOLUMES TRADED AND SOLD OFF OF, PROVIDING TRANSPARENCY REGARDING PHYSICAL NATURAL GAS TRANSACTIONS THAT SETTLE OFF INDEX AND TRANSACTION TO CONTRIBUTE OR MAY CONTRIBUTE TO NATURAL GAS INDICES. IN 2016, AN ANNUAL BUY IN FOR FIVE TYPES OF TRANSACTIONS, ONE, OFF NATURAL GAS INDICES IN THE NEXT DAY AND NEXTMONTH MARKETS. TWO, TRANSACTION FOR FIXED DAY NEXT DAY DELIVERY COMPLETED PRIOR TO TIMELY NOMINATION DEADLINE. THREE, TRANSACTIONS FOR FIXED PRICE NEXT MONTH DELIVERY COMPLETED DURING BID WEEK. FOUR TRANSACTIONS THAT SETTLE OFF NYMEX OR TRIGGER AGREEMENTS, AND FIVE, PHYSICAL BASIS TRANSACTIONS THAT SETTLE OFF OF THE CLOSING PRICE OF THE NYMEX NATURAL GAS FUTURES CONTRACT PRICE, PLUS OR MINUS NEGOTIATED DURING THE FIRST THREE DAYS OF THE WEEK. ALL MARKET PARENTS PANTS THAT FILE 552 ALSO INDICATE WHETHER THEY VOLUNTARILY REPORT TRANSACTIONS, OUT OF 1234 PARTICIPANTS WHO SUBMIT 552, 134 MARKET PARTICIPANTS INDICATED THEY REPORTED TRANSACTIONS TO INDEX DEVELOPERS. IN 2016, AGGREGATE NATURAL GAS PURCHASES TOTALLED 126, VOLUME OFF NEXTDAY AND NEXTMONTH INDICES REPRESENTED 28 PASADENA OF SALES AND PURCHASES. IN CONTRAST FIXED PRICE NEXT DAY AND NEXT MONTH AND PHYSICAL BASIS VOLUME THAT CONTRIBUTE TO THE CALCULATION OF THOSE INDICES TOTAL 25.7 PCS AND REPRESENTED 21% OF TOTAL SALES PLUS PURCHASES. REMAINING 1% WAS FILLED OFF NYMEX LULLS TRIGGER AGREEMENT, SPECIFICALLY 2016 DATA SHOW TRANSACTIONS THAT SETTLED OFF NEXT DAY INDEX REPRESENTED 33% OF TOTAL SALES PLUS PURCHASE AND VOLUMES THAT MAY HAVE CONTRIBUTED TO FORMATION REPRESENTED 12% OF TOTAL SALES PLUS PURCHASES. VOLUMES OFF NEXT MONTH INDEX REPRESENTED 45%, HALF THE PHYSICAL NATURAL GAS MARKET. HOWEVER VOLUME OF FIXED PRICE NEXT MONTH AND PHYSICAL BASIS TRANSACTIONS THAT MAY HAVE CONTRIBUTED REPRESENTED ONLY 9% OF THE TOTAL SALES PLUS PURCHASE. FIXED PRICE NEXT DAY VOLUMES TOTAL 15%, 18% DECLINE FROM 2009, FIRST YEAR OF COMPLETE DATA. WE ESTIMATE APPROXIMATELY 10.1 TCF REPORTED TO INDEX DEVELOPERS AND CONTRIBUTED TO NEXTDAY AND NEXT FORMATION IN 2016. VOLUMES OF TRANSACTIONS THAT SETTLED OFF NEXTDAY TOTALLED 41.8 TCF, 50% INCREASE FROM 2009, FOR EVERY BOUGHT OR SOLD AT FIXED PRICE REPORTED TO INDEX DEVELOPER THERE WERE 4.1 MMBtus THAT SETTLED OFF FIXED PRICE TRANSACTIONS. THIS WAS INCREASE IN 2009 RATIO OF VOLUMES OFF THE NEXT DAY INDEX RELATIVE TO ESTIMATED FIXED PRICE VOLUMES REPORTED TO INDEX DEVELOPERS WAS TWO TO 2001. 33% DECLINE FROM 2009. WE ESTIMATE APPROXIMATELY 7.3 TCF OF FIXED PRICE NEXT MONTH AND PHYSICAL BASIS VOLUMES REPORTED TO INDEX DEVELOPERS, THUS CONTRIBUTED TO NEXT MONTH INDEX FORMATION. VOLUME TRANSACTION THAT SETTLED OFF NEXT MONTH TOTALED 56, SLIGHT DECREASE FROM 2009, FOR EVERY BOUGHT OR SOLD AT FIXED PRICE REPORTED TO INDEX DEVELOPERS THERE ARE 7.6 MMBtus THAT SETTLED OFF THOSE TRANSACTIONS, THIS IS AN INCREASE FROM 2009 WHERE RATIO RELATIVE TO ESTIMATED FIXED PRICE NEXT MONTH AND PHYSICAL BASIS VOLUMES REPORTED TO INDEX DEVELOPERS WAS 4.9 TO 1.

>> THE COMMISSION REQUIRES ONE OF THE THREE MUST BE MET AFTER A 90 DAY PERIOD OR NEXT DAY INDEX OR 180 DAY PERIOD FOR NEXT MONTH INDEX TO BE USED IN A FERC JURISDICTIONAL TARIFF. ONE, THE DAILY, WEEKLY OR MONTHLY VOLUME TRADED MUST AVERAGE 25,000 MMBtus PER DAY. TWO, NUMBER OF TRANSACTION MUST BE 5 FOR NEXT DAY INDEX, AT LEAST 8 PER WEEK, OR 10 PER MONTH FOR NEXTMONTH INDEX. OR, THREE, NUMBER OF COUNTER PARTIES MUST AVERAGE FIVE COMPANIES PER DAY FOR NEXTDAY INDEX, AT LEAST EIGHT COMPANIES PER WEEK FOR A WEEKLY INDEX, AT LEAST TEN COMPANIES PER MONTH FOR MONTHLY INDEX. WE EXAMINED THE LIQUIDITY OF INDICES PUBLISHED BY THE TWO PRIMARY INDEX DEVELOPERS REFERENCED IN FERC TARIFFS, NGI AND PLATTS BASED ON NUMBER OF TRADES AND VOLUME OF TRANSACTION. IF AN INDEX FAILS, FOR A DAILY OR WEEKLY INDEX OR 180 DAY AVERAGE FOR MONTHLY INDEX, DOES THE ANALYSIS CONSIDER THE INDEX STILL LIQUID. ALTHOUGH THE 2004 PRICE INDEX ORDER LAYS OUT THREE CRITERIA THRESHOLDS FOR INDEX LIQUIDITY THE PRICE INDEX ORDER DID NOT REQUIRE INDEX DEVELOPERS TO PUBLISH NUMBER OF COUNTER PARTIES DUE TO SENSITIVE NATURE OF CONFIDENTIALITY AGREEMENTS BETWEEN REPORTING COMPANIES. AS A RESULT NEITHER PLATTS NOR NGI PUBLISHS NUMBER OF COUNTERPARTIES. THE TABLE ON THIS SLIDE SUMMARIZES THE OVERALL LIQUIDITY STATUS OF THE INDICES BY PUBLICATION. OVERALL, WE FOUND THAT 13 OF THE 125 PLATTS AND NGI INDICES REFERENCED IN INTERSTATE NATURAL GAS PIPELINE TARIFFS OR NGA TARIFFS WERE FOUND TO BE ILL LIQUID AT SOME POINT FROM APRIL 2016 THROUGH MAY OF 2017. AS OF THE LAST PUBLICATION USED FOR THIS ANALYSIS, EIGHT REFERENCED INDICES WERE FOUND TO BE ILLLIQUID. WE REVIEWED BOTH NGA TARIFFS AND RPI ISO TARIFFS TO GAIN INSIGHT INTO HOW TARIFFS REFERENCE PHYSICAL NATURAL GAS INDICES. AS OF MAY 2017 A TOTAL OF 75 DIFFERENT PRICE POINT LOCATIONS ARE USED THROUGHOUT THE RTO/ISO AND NGA TARIFFS. THERE ARE 169 NGA TARIFFS, 80% REFERENCE ONE NATURAL GAS INDEX. THESE TARIFFS USE EITHER A SINGLE NATURAL GAS INDEX OR A COMBINATION OF SEVERAL INDICES TO PRICE OUT VARIOUS RATES, REIMBURSEMENTS AND PENALTIES. THE MOST COMMONLY USED INDEX DEVELOPER IN NGA TARIFFS IS PLATTS WHICH PUBLISHES BOTH A DAILY PUBLICATION, GAS DAILY, AND A BIWEEKLY PUBLICATION, INSIDE FERC CAST MARKET REPORT. RTO/ISO TARIFFS USE NATURAL GAS INDICES DIFFERENTLY THAN NGA TARIFFS, GENERALLY REFERENCED TO CALCULATE FUEL COSTS TO ESTIMATE STARTUP, MINIMUM LOAD, COST OF ENTRY AND OTHERS. SOME USE NATURAL GAS INDICES FOR DEMAND RESPONSE RESOURCES AND ALSO IN CONSTRUCTING DEMAND CURVES. IN GENERAL, RTO/ISO TARIFFS ARE LESS SPECIFIC ABOUT WHICH NATURAL GAS INDEX IS USED FOR THE VARIOUS APPLICATIONS STATED ABOVE. FOR EXAMPLE, MARKET PARTICIPANTS IN PJM AND NYISO CAN CHOOSE AND INDEX FOR THEIR REFERENCE COST CALCULATION BUT CHOICE IS SUBJECT TO REVIEW BY THE INTERNAL MARKET MONITOR. IN CONCLUSION, THE 2016 FERC FORM 552 DATA SHOWS THE MARKETS PARTICIPANTS CONTINUE TO RELY ON NATURAL GAS INDICES AS A PRIMARY WAY TO PRICE PHYSICAL NATURAL GAS TRANSACTIONS. IN 2016, THE VOLUME OF FIXED PRICE TRANSACTIONS ARE AS MUCH AS SEVEN TIMES SMALLER THAN INDICES THEY CREATED. RELATIVE LOW NUMBER REPORTED TO PRICE DEVELOPERS MAY IMPACT OVERALL LIQUIDITY OF NATURAL GAS INDICES. THIS CONCLUDES OUR PRESENTATION. WE ARE HOPEFUL THAT THIS PRESENTATION HAS PROVIDED A CLEAR DESCRIPTION OF NATURAL GAS INDEX LIQUIDITY TRENDS AND OUR CONCERNS BASED ON THOSE TRENDS. WE'RE LOOKING FORWARD TO A THOUGHTPROVOKING DISCUSSION THAT COULD POTENTIALLY HELP SHAPE INDUSTRY COMMISSION ACTION. THANK YOU.

>> THANK YOU, ERIC AND MATT. NOW WE'LL MOVE TO OUR FIRST PANEL, EXAMINES ROBUSTNESS AND LIQUIDITY OF NATURAL GAS MARKET INDICES, DEGREE OF ENERGY RELIANCE ON INDEX BASED CONTRACTS RATHER THAN FIXED PRICE CONTRACTS AND DECLINE IN FIXED PRICE REPORTING TO INDEX DEVELOP AND WHETHER NATURAL GAS INDICES REFLECT CONDITIONS. I'LL ASK THE PANELISTS TO INTRODUCE THEMSELVES.

>> VINCE KAMINSKI, I TEACH CLASSES ON ENERGY MARKETS AND ENERGY RISK MANAGEMENT AT RICE UNIVERSITY BUSINESS SCHOOL.

>>

>> GOOD MORNING, DEXTER STEIS, EXECUTIVE PUBLISHER OF NATURAL GAS INTELLIGENCE.

>> GOOD MORNING, JC KNEALE WITH ICE. I'M VICE PRESIDENT OF THE NORTH AMERICAN NATURAL GAS ENERGY MARKETS, GAS AND POWER SPECIFICALLY.

>> GOOD MORNING, MARK CALLAHAN WITH PLATTS, EDITORIAL DIRECTOR WITH RESPONSIBILITY OVER NATURAL GAS PRICE ASSESSMENTS.

>> TOM HAYWOOD.

>> EUAN CRAIK, CEO FOR AMERICAS REGION OF AUGUST MEDIA, INTERNATIONAL PRICE REPORTING AGENCY.

>> ORLANDO ALVAREZ, PRESIDENT AND CEO OF BP ENERGY COMPANY, RESPONSIBLE FORBP NORTH AMERICAN GAS AND TRADING.

>> THANK YOU. I WOULD REMIND YOU TO LIFT UP YOUR NAME TENTS WHEN YOU'D LIKE TO SPEAK AND KEEP TURNING YOUR MICROPHONES ON AND OFF SO WE DON'T GET A REPRIMAND. I'LL TURN THE DISCUSSION OVER TO SEAN COLLINS WHO WILL BEGIN ASKING QUESTIONS.

>> THANK YOU, JANEL. THANK YOU ALL FOR BEING HERE. I WANT TO START THE QUESTIONING TALKING ABOUT TRADING A LITTLE BIT. AND ASK YOU TO DESCRIBE CURRENT TRENDS IN NATURAL FIXED PRICE AND PHYSICAL BASIS TRADING THAT YOU BELIEVE ARE POSITIVELY OR NEGATIVELY INFLUENCING PRICE FORMATION IN THE MARKETS INCLUDING DISCUSSING ANY OBSERVABLE SHIFTS IN LIQUIDITY, ARE THERE DIFFERENCES IN MARKETS FUNDAMENTALS, PROCEDURES OR POLICIES YOU SEE DISPROPORTIONALLY IMPACTING OVERALL OR REGIONAL LIQUIDITY. WE'LL START BY WORKING DOWN THE LINE. MR. ALVAREZ, IF YOU WANT TO BEGIN.

>> OKAY. SO YOU WANT ME TO  OKAY, HERE WE GO. GOT IT. SO FIRST OFF, THANK YOU FOR PUTTING THIS TOGETHER. AS COMMISSIONER HONORABLE MENTIONED, BP WAS A COUPLE YEARS AGO  WE CAME TO THE COMMISSION BECAUSE WE SAW A TREND. AND THE TREND MEANING WE WERE SEEING WHAT I CALL LIQUIDITY IN THE PHYSICAL AND FINANCIAL MARKETS, THERE'S A BIG DIFFERENCE THERE. AND THE MARKET WAS  ALSO AS THE PHYSICAL LIQUIDITY WAS GOING DOWN, NOT ONLY WAS LIQUIDITY AN ISSUE BUT FIXED PRICES REPORTED INTO THE INDICES WERE DRASTICALLY BEING  WE SAW THE TREND COMING OFF. SO FOR US IT WAS  IT INTRODUCES A NUMBER OF THINGS THAT CONCERN US, AS ONE OF THE MAJOR PRICE REPORTERS TO PLATTS, TO THE INDICES. SO WHAT WE'VE SEEN, TO ANSWER YOUR QUESTION DIRECTLY, WHAT WE'VE SEEN IS THAT OVER THE LAST FEW YEARS LESS VOLUME BEING DONE AT CERTAIN LOCATIONS. ON THE FINANCIAL SIDE, WE'RE SEEING THE MARKET IN A VERY DIFFERENT PLACE. BY THAT I MEAN THERE ARE A LOT OF INFRASTRUCTURE THAT'S OCCURRED OVER THE LAST FEW YEARS, INFRASTRUCTURE BUILDOUT. OBVIOUSLY WHERE YOU HAVE INFRASTRUCTURE BUILDOUT, YOU SEE VOLUME, VOLUME DEPTH IS BETTER, IN IMPACT IT'S IMPROVING. IT'S THE AREAS WHERE MAYBE YOU DON'T HAVE THE INFRASTRUCTURE, I.E. SO CAL, PG AND E, YOU SEE VOLUMES GOING UP IN CHICAGO AND HOUSTON SHIP CHANNEL BECAUSE YOU HAVE INFRASTRUCTURE BEING BUILT OUT. PEOPLE ARE TRYING TO HEDGE VOLUMES. SO YOU SEE THAT ACTIVITY FLOATING THERE. IT'S IN SOME AREAS WHERE I THINK WE NEED TO REALLY FOCUS ON. AGAIN, I WANT TO MAKE SURE I'M CLEAR. I'M NOT SAYING THERE'S SOMETHING WRONG HERE WITH HOW THE INDEX IS CALCULATED OR THERE'S A BIG PROBLEM HERE. IT'S ABOUT A TREND. AND I THINK WE'RE HITTING IT, VERY GLAD WE'RE DOING THIS TO ADDRESS IT. DOES THAT ANSWER YOUR QUESTION DIRECTLY?

>> (INAUDIBLE).

>> SO I THINK WE'VE SEEN A DECLINE SOMEWHAT IN THE NUMBER OF FIXED AND PROPORTION OF FIXED PRICE TRADES, BUT AS A PUBLISHER THAT OPERATES IN A LOT OF DIFFERENT MARKETS, 15% OF THE OVERALL MARKET, WHICH IS THE NUMBER WE CAME UP, IF YOU WAIT, DAILIES AND BID WEEKS, IS NOT AN INCONSIDERABLE PROPORTION OF AN OVERALL TRADED VOLUME TO BE BASING INDEXES OFF. NOW, THE REPORTED VOLUMES WERE A SUBSET OF THAT, STILL I THINK IT'S IMPORTANT TO UNDERSTAND IN THIS MARKET, IN THIS MEETING, IN THE CONTEXT OF OTHER ENERGY MARKETS AROUND THE WORLD YOU HAVE AN ABUNDANCE OF DATA, AN ABUNDANCE OF TRADING VOLUME HERE. IT MAY BE LESS THAN TEN YEARS AGO, WHEN PRICES WERE HIGHER, THERE WAS MORE VOLATILITY, THE BANKS WERE BIG PLAYERS IN THE NATURAL GAS MARKETS. BUT THERE'S STILL PLENTY OF DATA TO PRODUCE ROBUST RELIABLE INDEXES. SO I DON'T PERSONALLY  ARGUS DOESN'T SEE A PROBLEM HERE. THE MARKET HAS SHIFTED WITH THE LESS VOLATILITY PRICES HAVE COME DOWN, SHELL PRODUCES 10 AT INDEX RATHER THAN FIXED PRICE, TRADERS HAVE LEFT THE MARKET, WHICH AGAIN TENDS TO ARGUE FOR LESS FIXED PRICE TRADING BUT I THINK FUNDAMENTALLY YOU'VE STILL GOT A VERY, VERY HEALTHY MARKET. I THINK WHERE THE COMMISSION POTENTIALLY COULD HELP, MAYBE THIS IS A QUESTION THAT'S GOING TO COME UP LATER ON, IS THE ONE FACTOR THAT IS CONSTANTLY CITED TO ARGUS AS TO WHY COMPANIES DO NOT REPORT THEIR TRADES TO ARGUS, I THINK YOUR PRESENTATION WAS GREAT AND SHOWED THAT COMPANIES REPORTING ARE A SUBSET OF THE OVERALL POPULATION OF 552 RESPONDENTS. WHERE THE COMMISSION COULD HAPPY, A PRIMARY REASON PEOPLE DON'T REPORT, SAFE HARBOR PROVISION IS NOT FACING US, A FAT FINGER ERROR CAN RESULT IN AN INVESTIGATION, AND THERE MAY BE WAYS WE COULD EXAMINE TO MAKE THAT A MORE ROBUST PROVISION THAT GIVES MARKET PARTICIPANTS GREATER CONFIDENCE IN REPORTING TO INDEX DEVELOPERS.

>> YOU KNOW, THANK YOU FOR YOUR REMARKS, AND I AGREE WITH HIM. I DON'T THINK THE SYSTEM  THIS IS DON HAYWOOD WITH ENERGY INTELLIGENCE. I DON'T THINK THE SYSTEM IS BROKEN. I THINK THE SYSTEM HAS BEEN WEAKENED BY FACTORS THAT HAVE GONE ON, YOU KNOW, SOME NATURAL SHIFTS IN THE MARKET, SOME  LIKE THE BANKS HE MENTIONED. BUT IT'S STILL STRONG ENOUGH AND STILL ROBUST ENOUGH TO PRODUCE GOOD PRICE INDICES. BUT SAYING THAT, WE COULD PRODUCE BETTER PRICE INDICES, IF WE HAD MORE DEPTH OF REPORTING. AND ONE WAY WE COULD DO THAT IS FOR FERC TO REALLY LOOK AT THE SAFE HARBOR, YOU KNOW, PROVISION. IF YOU READ THE SAFE HARBOR PROVISION, IT WAS WRITTEN IN 2003, IN A VERY STRESSFUL PERIOD, BACK BEFORE REPORTING WAS DONE AS IT IS TODAY, WHERE YOU HAVE THE OFFICES CLEARING, YOU KNOW, THE BACK OFFICES CLEARING THE TRADES AND THEN DELIVERING THEM TO PUBLISHERS, VIA EMAIL. IT'S KIND OF REFERENCING A PERIOD WHERE YOU WOULD HAVE  I USED TO DO IT  INDIVIDUAL TRADERS CALLING, BEING CALLED BY PUBLISHERS, AND YOU WOULD GET THEIR PRICES AND, YOU KNOW, YOU MIGHT HAVE THREE CALLS OR FOUR CALLS, YOU KNOW, IN THE MORNING. AND IT REFERENCES THE BURDENSOME NATURE OF REPORTING TO MORE THAN ONE PUBLISHER. IT KEEPS REPEATING THIS. YOU KNOW, YOU DON'T HAVE TO REPORT TO MORE THAN ONE PUBLISHER. YOU KNOW, WE UNDERSTAND IT'S A BURDEN TO REPORT TO MORE THAN ONE PUBLISHER, AND, YOU KNOW, IT SETS UP A SITUATION WHERE A COMPANY INTERPRETS THAT. AND WE'VE COME ACROSS THIS, WHERE COMPANIES SAY, WE DON'T REPORT TO MORE THAN ONE PUBLISHER. THAT'S WHAT THE RULE SAYS. I THINK YOU REALLY NEED TO LOOK AT THAT SAFE HARBOR. I THINK THE SAFE HARBOR PROVISION SHOULD STRONGLY ENCOURAGE REPORTING TO ALL THE PUBLISHERS WHO HAVE  AS IT SAYS, FORMATIVELY ADOPTED STANDARD OF POLICY STATEMENT 33. WE TOOK OUR SURVEYS AND NOW PUBLISH THE VOLUMES, NUMBER OF TRADES, ALL THE OTHER LIQUIDITY FACTORS THAT GO BEHIND EACH INDEX, AS FERC ASKED US TO DO. WE ACCEPT PRICES ACCORDING TO WHAT FERC SAYS YOU SHOULD TELL THE PUBLISHERS. I THINK IT'S GREAT, IT'S A WONDERFUL SYSTEM. BUT FERC NEEDS TO BE CLEAR IT WANTS PUBLISHER  IT WANTS THE TRADERS, TRADING COMPANIES, TO REPORT TO ALL PUBLISHERS, NOT JUST ONE, YOU KNOW, PUBLISHER. BUT ALL THE PUBLISHERS. I THINK THAT'S VERY IMPORTANT AND I WOULD ENCOURAGE YOU TO REALLY LOOK AT YOUR SAFE HARBOR AND WE'LL HAVE MORE COMMENTS ON THAT AFTER THE CONFERENCE. BUT THAT'S BASICALLY OUR TAKE. THE SYSTEM ISN'T BROKEN, BUT IT COULD BE MADE MORE ROBUST AND FERC CAN DO SOMETHING TO DO THAT BY ENCOURAGING THE  AT LEAST THE LARGEST OF THE TRADING HOUSES TO REPORT TO EVERYONE. THANK YOU.

>> THIS IS MARK CALLAHAN AT PLATTS. I DO ECHO SOME COMMENTS MADE BY ARGUS ENERGY INTELLIGENCE. I DO WANT TO POINT OUT JUST A SLIGHTLY DIFFERENT TAKE ON THE FERC FLAT, ERIC AND MATTHEW TALKED ABOUT LONGER TREND IN TERMS OF LOWER VOLUME AND INCREASE IN INDEX TRADING OVER THE PREVIOUS FEW YEARS SINCE 2011. WHAT'S IMPORTANT TO NOTE WE ARE SEEING A DECLINE IN THAT DOWN TREND, SO FOR EXAMPLE DAILY FIXED PRICE TRADING IN 2016 DID INCREASE 4 TO 5%. MONTHLY TRADING WAS FLAT TO DOWN 1% OR SO, DEPENDING ON WHICH DATA YOU'RE LOOKING AT SO WE'RE SEEING IMPROVEMENT IN VOLUMES FROM THAT PERSPECTIVE. AND PREVIOUS PANELISTS HAVE TOUCHED ON SOME OF THE REASONS FOR THAT. SO I THINK IT'S IMPORTANT TO NOTE THAT WE ARE SEEING AN IMPROVEMENT THERE. YOU KNOW, IN TERMS OF THINGS THAT HAVE CHANGED FROM A LIQUIDITY STANDPOINT, PLATTS MAINTAINS TRANSACTION DATA IS SUFFICIENT TO PRODUCE INDICES REFLECTIVE OF MARKET CONDITIONS, VOLUMES ARE NOT WHAT THEY WERE YEARS AGO BUT STILL SUFFICIENT, AND TRANSPARENCY IS THERE TO PRODUCE THOSE INDICES. AT THE SAME TIME, INCREASE IN INDEX TRADING I THINK SPEAKS TO THE CONFIDENCE THAT FOLKS IN THE MARKET HAVE TO PRICE OFF OF THE INDICES THEMSELVES. SO I'M LESS CONCERNED ABOUT WHERE THE INDEX RATIO YOU TALKED ABOUT WHICH SAID THE NUMBER OF INDEX TO FIXED PRICE TRADING INCREASES FROM TWO TO ONE TO FOUR TO ONE OVER SEVERAL YEARS. I'M MORE CONCERNED WITH NUMBER OF FIXED PRICE TRADES IN THE INDICES THEMSELVES AND I THINK THAT'S SUFFICIENT, WE'LL TALK LATER ABOUT THE AGREEMENT THAT WILL IMPROVE THAT AS WE INCORPORATE EXCHANGE DATA INTO THE INDICES. THERE ARE WAYS, TO CONCLUDE, WE CAN CHANGE THE POLICY STATEMENT TO INCENTIVIZE PEOPLE TO PRICE REPORT AND I'VE GOT SOME IDEAS FOR THAT WE CAN TALK ABOUT IN A LITTLE BIT. THANK YOU.

>> GOOD MORNING, J.C. KNEALE WITH ICE AGAIN. VINCE IS GOING TO RUN OUT OF NEW POINTS TO TALK ABOUT, PEOPLE ARE SIT HITTING VERY KEYNOTES HERE. I THINK THIS IS A COMPLEX ISSUE, OBVIOUSLY, AND I DON'T BELIEVE THERE'S ANY ONE MAGIC BULLET THAT'S GOING TO FIX ANY PERCEIVED PROBLEMS. I WOULD ECHO SOME OF THE THINGS THAT EACH OF THE PANELISTS HAVE SAID. ONE, I THINK THAT IN GENERAL THE MARKET IS GETTING HEALTHIER, AND AS IT CONTINUES TO GET HEALTHIER WE'RE GOING TO SEE AN INCREASED NUMBER OF TRADES AND INCREASED NUMBER OF COUNTERPARTIES. OVER THE LAST SIX OR SEVEN YEARS THERE ARE A VARIETY OF THINGS THAT COULD HAVE CONTRIBUTED TO A DECLINE IN TRADING, OR DECLINE IN TOTAL COUNTERPARTIES, SOME OF THOSE WERE REGULATORY, SOME WERE FUNDAMENTAL. I AM NOT GOING TO BE THE PERSON THAT'S GOING TO IDENTIFY EACH AND EVERY ONE OF THOSE. WHAT I WILL SAY IS THAT THE TREND WAS DEFINITELY DOWN FOR SEVERAL YEARS, BUT IN RECENT YEARS WE'VE BEGUN TO SEE IT PICK BACK UP. IMPORTANTLY THOUGH WHILE THE NUMBER OF COUNTERPARTIES HASN'T NECESSARILY FALLEN, ONE OF THE INTERESTING THINGS YOU MIGHT HAVE SOME COMMERCIALS TALK ABOUT IS HOW THEY HAVE SHRUNK THE NUMBER OF ACTUAL HUMANS AVAILABLE TO TRADE ON THEIR DEBTS BECAUSE WE'VE SEEN THE TOTALS NUMBER OF UNIQUE INDIVIDUALS DROP EVEN AS COUNTERPARTIES STAY, AND JUST AS ALL OF US WHO DO WORK UNDERSTAND THE MORE PEOPLE YOU HAVE WITH THEIR OWN BUDGETS, ET CETERA, THE MORE THEY ARE GOING TO TEND TO PRODUCE. SO FOR VARIETY OF REASONS WE'VE SEEN THOSE NUMBERS OF ACTUAL PERSONS DECLINING, AND THAT COULD BE ONE OF THE REASONS THAT WE SAW SLIPPAGE. AGAIN, AS THINGS HAVE FIRMED BACK UP AND ALTHOUGH A LOT OF PEOPLE WOULD ARGUE $3 GAS IS NOT NECESSARILY FIRMED BACK UP, IT'S PERHAPS BETTER THAN $2 GAS FOR SOME FOLKS, SO WE HAVE SEEN COUNTERPARTIES COMING BACK INTO THE MARKET AND SEEN COUNTERPARTIES STAFFING UP. IN GENERAL OVER THE LAST COUPLE YEARS WE'VE SEEN ABOUT 280 INDIVIDUAL COUNTERPARTIES TRADE IN THE ICE NEXTDAY AND BID WEEK MARKETS. WE SAW NEXTDAY TRADING THIS YEAR, YEAR TO DATE IS UP 10% VERSUS LAST YEAR, A POSITIVE SIGN. IT OWES A BIT TO WHAT MR. ALVAREZ REFERENCED IN TERMS OF INFRASTRUCTURE, THERE'S NEW PIPES TO TRADE AROUND, AND THAT'S CREATING MORE OPPORTUNITY FOR MORE CUSTOMERS TO BE SERVED IN UNIQUE AND NEW WAYS. AND UNFORTUNATELY ON THE BID WEEK SIDE WE HAVE SEEN A REDUCTION OF ABOUT 8%. IT'S NOT QUITE AS DRAMATIC AS SOME OF THE OTHER PUBLISHERS, BUT IT IS NONETHELESS DOWN. INTERESTINGLY, ON ICE, NOBODY REPORTS TRADES TO US. OUR TRADES ARE IN FACT ACTUAL REAL TRADES DONE EVERY SINGLE DAY ON THE SYSTEM. SO I AM NOT NECESSARILY GOING TO ECHO THE IDEA OF REQUIRED REPORTING. I'M NOT CERTAIN THAT ADDING MORE REGULATION OR MORE LEGISLATION IS ALWAYS THE ANSWER. I THINK THAT THERE ARE A LOT OF VERY SMART COMPANIES OUT THERE RUN BY A LOT OF VERY SMART PEOPLE WHO WILL JUST NATURALLY GRAVITATE TOWARDS THE BEST METHOD THAT FITS THEIR NEEDS, AND I DON'T THINK LEGISLATED REQUIREMENTS ARE ALWAYS THE RIGHT FIX. EXCUSE ME. MOVING FROM THAT, AS MARK NOTED, WE DO WORK TOGETHER WITH A COUPLE OF PROVIDERS TO ENSURE GREATER ROBUSTNESS AND TRANSPARENCY FOR THEIR INDICES AND I'M SURE WE'LL GET A CHANCE TO TALK ABOUT THAT A LITTLE LATER TODAY. THANK YOU.

>> WELL, DEXTER STEIS, NGI. I WANTED TO FIRST THANK THE COMMISSION STAFF FOR HOSTING THIS TECHNICAL CONFERENCE. IT HAS ALREADY SHINED A SPOTLIGHT ONTO PRICE REPORTING, AND MARKET LIQUIDITY, AND THAT IN TURN HAS ALREADY HELPED SOME OF NGI'S EFFORTS IN RECRUITING NEW PRICE REPORTERS TO OUR SURVEY. TO ANSWER THE QUESTION SPECIFICALLY, WHICH IS WHAT ARE WE SEEING OUT THERE, AND BY THE WAY I THINK IT IS HARDER TO GO NEXT TO LAST IN OPENING REMARKS THAN IT IS TO GO FIRST, WHEN WE STARTED AND ORLANDO WENT FIRST, I SAID OH GOOD, LET ORLANDO GO FIRST. MANY OF MY FELLOW PANELISTS HAVE MENTIONED SOME REALLY GOOD POINTS. SO I'M JUST GOING TO LAYER ON A FEW. WE HAVE SEEN WHAT WE'LL CALL ASYMPTOTIC DECLINE IN AMOUNT OF DATA RECEIVED, OUR INDICES ARE CONSTRUCTED UPON, THAT ASYMPTOTIC DECLINE SINCE 2008 WHEN I BELIEVE FERC STARTED SOLICITING 552 DATA WAS FAIRLY STEEP FOR A NUMBER OF YEARS AND HAS COME DOWN, AND WE BELIEVE REACHING A DECLINE CERTAINLY IN DAILY MARKET. THE BID WEEK MARKET AS J.C. MENTIONED IS MORE TENUOUS, CERTAINLY THE AMOUNT OF FIXED PRICE DEALS CONTINUE TO DECLINE IN THE BID WEEK MARKET. MR. ALVAREZ MENTIONED INFRASTRUCTURE. INFRASTRUCTURE IS HELPING IN CERTAIN MARKETS BUILD OUT MORE TRADING, MORE TRADING LEADS TO GENERALLY SPEAKING MORE REPORTING, AND MORE REPORTING MEANS MORE ROBUST INDEXES IN CERTAIN MARKETS. THERE HAVE BEEN A FEW OTHER TRENDS NGI OBSERVED. ONE IS VOLATILITY, SO VOLATILITY WAS DOWN IN 2016, AND PRODUCTION WAS DOWN IN 2016. ACCORDING TO THE EIA THE FIRST YEAR PRODUCTION WAS DOWN IN MAYBE 8 OR 9 YEARS. SO THAT BROUGHT FORWARD MAYBE LESS FIXED PRICE TRADING, CERTAINLY TRADERS LOVE VOLATILITY AND THEY MIGHT BE INTERESTED IN TRADING MORE FIXED PRICE IN VOLATILE MARKETS. WE SEE VOLATILITY IMPROVING GOING FORWARD, WE THINK A COUPLE THINGS ARE GOING TO IMPACT THAT DIRECTLY, CERTAINLY EXPORTS OF NATURAL GAS TO MEXICO, AND THEN LNG EXPORTS WILL SUBJECT OUR NORTH AMERICAN NATURAL GAS PRICES TO INTERNATIONAL SUPPLY SHOCKS, AND THAT COULD INJECT SOME VOLATILITY, TRADERS LIKE VOLATILITY. SOME OTHER THINGS THAT HAVE IMPACTED THE INDEXES ARE  OR AMOUNT OF INFORMATION FROM WHICH WE CAN CONSTRUCT OUR INDEXES IS THE AMOUNT OF INDEXATION ITSELF. SO, YOU KNOW, I LIKE TO SAY THAT NATURAL GAS HAS A HIGH CLASS PROBLEM OTHER WE'RE VICTIMS OF OUR OWN SUCCESS, PRECISELY BECAUSE FOLKS IN THE ROOM VALUE THE RELIABILITY AND THE TRANSPARENCY OF THE INDEXES THAT THEY UTILIZE THE INDEXES AND THROUGH UTILIZES INDEXES ARE DOING LESS FIXED PRICE TRADING, INDEXING THEIR GAS. YOU SHRUG YOUR SHOULDERS AND WONDER IF THEY ARE LOOKING AND EVALUATING DECISIONS AT COMMERCIAL LEVEL TO USE THOSE INDEXES AND BY THE WAY PLATTS AND NGI AND ARGUS AND ENERGY INTELLIGENCE GROUP, WE ALL PUBLISH LIQUIDITY MEASURES IN OUR INDEXES EACH DAY, EACH WE SHALL AND MONTH. CAVEAT EMPTOR. THE FOLKS THAT USE THESE INDEXES CAN SEE EXACTLY WHAT, AT AN INDEX LEVEL, WHAT'S GOING INTO THOSE PRICES, THOSE INDEXES. AND I APPRECIATE MATTHEW AROUND ERIC'S ANALYSIS OF PIPELINE TARIFFS, SORT OF A SLICE INTO THE MARKET THAT I'VE NOT SEEN, SO THAT WAS INTERESTING. AND WE CAN TALK MORE LATER ABOUT NGI HAS SOME IDEAS ABOUT HOW TO INDUCE MORE REPORTING, BUT I'LL SAVE THAT FOR A LITTLE BIT LATER. THANK YOU.

>> VINCE KAMINSKI, RICE UNIVERSITY. I WANT TO THANK THE COMMISSION FOR THE OPPORTUNITY TO PARTICIPATE IN THIS PANEL. THIS IS A VERY IMPORTANT TOPIC. THE INSTITUTIONS AND BUSINESS PROCESSES BEHIND PRICE FORMATION AND PRICE DISCOVERY AND MARKETS ARE VERY IMPORTANT PART OF PLANNING OF THE MARKETS, BUT THIS IS ALWAYS THE CASE WITH PLANNING THAT IT DOESN'T GET MUCH ATTENTION UNLESS IT MALFUNCTIONS. FOR THE LAST FEW YEARS, WE HAVE SEEN SOME NEGATIVE TRENDS, AND I AGREE WITH OTHER PANELISTS THAT IT SEEMS THAT THIS DOWNWARD TREND IS REACHING (INDISCERNIBLE) SO THIS IS GOOD NEWS. THE BAD NEWS IS THAT IT MAY CONTINUE, CONTINUE FOR SOME REASONS I WANT TO MENTION LATER IN MY PRESENTATION. THE SECOND OBSERVATION I WOULD LIKE TO MAKE IS THAT AN EFFICIENT AND TRANSPARENT MARKET IS A PUBLIC GOOD. BUT AS IN THE CASE OF ANY PUBLIC GOOD, THERE ARE TWO PROBLEMS. TWO PROBLEMS THAT HAVE BEEN IDENTIFIED BY THE ECONOMISTS QUITE A LONG TIME AGO, FOR THE FIRST TIME BY THE SWEDISH ECONOMIST (INDISCERNIBLE), HE IDENTIFIED WHO PROBLEMS WITH THE PUBLIC GOODS. FIRST OF ALL, THERE IS ALWAYS A PROBLEM OF FREE RIDER, PEOPLE WHO WANT TO TAKE AN ADVANTAGE OF THE PUBLIC GOOD, BUT THEY DON'T WANT TO PARTICIPATE IN FUNDING, SUPPORTING SUPPLY OF PUBLIC GOOD. SECOND THERE WILL BE ALWAYS MARKET PARTICIPANTS WHO WOULD LIKE LESS OF THE PUBLIC GOOD. YOU KNOW, THOSE ARE THE MARKET PARTICIPANTS WHO CAN TAKE ADVANTAGE OF A SYMMETRIC INFORMATION, DOMINANT MARKET WITH POSITION, YOU KNOW, THEY ARE PROBABLY NOT AS MUCH INTERESTED IN TRANSPARENCY BECAUSE THEY HAVE ACCESS TO BETTER INFORMATION THAN AN AVERAGE MARKET PARTICIPANT. SO WHEN IT COMES TO THE INDICES, I CAN IDENTIFY TWO BASIC PROBLEMS. YOU KNOW, TWO SIDES OF THE SAME COIN. YOU KNOW THE FIRST PROBLEM IS STRONG PREFERENCE FOR ENTERING INTO INDEX DEALS. AND I CAN IDENTIFY TWO SETS OF REASONS WHY THIS IS THE CASE. YOU KNOW, THE FIRST REASON IS THE RESULT OF GREAT SUCCESS. YOU KNOW, THIS IS THE SHALE REVOLUTION, BUT THE SHALE REVOLUTION HAS CREATED CERTAIN CONDITIONS WHICH LEAD MARKET PARTICIPANTS TO HAVE A STRONG PREFERENCE FOR INDEX DIPS. I CAN ELABORATE ON THIS LATER. YOU KNOW, THE SECOND PROBLEM IS THAT WE ARE REALLY DEALING WITH AN INTEGRATED NATURAL GAS ELECTRIC SYSTEM, AND THIS IS A SYSTEM WHICH IS VERY COMPLEX. AND SOMETIMES MINOR CHANGES, MINOR CHANGES AROSE OR MINOR DEVELOPMENTS IN PART OF THE SYSTEM CAN HAVE UNEXPECT CONSEQUENCES IN OTHER PARTS OF THE SYSTEM. AND I THINK THERE WERE CERTAIN DEVELOPMENTS QUITE POSITIVE IN SOME PARTS OF THE INTEGRATED ELECTRICITY NATURAL GAS COMPLEX, WHICH AFFECTS WILLINGNESS TO PROVIDE DATA TO INDEX PUBLISHERS. I WOULD BE GLAD TO IDENTIFY A FEW SPECIFIC EXAMPLES. YOU KNOW, THE SECOND SIDE OF THE COIN IS THE RELUCTANCE TO REPORT TO THE INDEX PUBLISHERS. YOU KNOW, I THINK THAT AGAIN ONE OF THE REASONS BEHIND IT IS THE GREAT SUCCESS STORY, THE SHALE REVOLUTION. THE SHALE REVOLUTION COLLAPSEED THE PRICES, AND ALONG WITH PRICES THE MARGINS COLLAPSED. SO THE OUTCOME IS THAT WE HAVE MANY SMALL PRODUCERS, MARKETERS, STRUGGLING TO SURVIVE. AND IF YOU ARE STRUGGLING TO SURVIVE, REPORTING PRICES AND INCURRING ADDITIONAL COSTS IS PROBABLY LAST THE THINGS ON YOUR MIND. SOMETIMES WE DON'T REALIZE HOW PRESSURED PRODUCERS AND THE MARKETS ARE OF NATURAL GAS. YOU KNOW, I WAS TALKING TO ONE TRADER, AND HE MENTIONED THAT SOME PRODUCERS THEY ARE DEALING WITH, YOU KNOW, CANNOT AFFORD TO BUY DATA, PRICED INFORMATION, PUBLISHED BY THE INDUSTRY, PRICE REPORTING AGENCIES. SO WHAT IS THE SOLUTION? YOU KNOW, THE SOLUTION IS JUST TO FOLLOW THE TRANSACTIONS ON ICE, EARLY IN THE MORNING, YOU KNOW, CALCULATE THE AVERAGE AND THIS BECOMES A PRICE AT WHICH THEY TRANSACT. AND THEN SUCH A TRANSACTION WILL BE REPORTED AS A FIXED PRICE DEAL, WILL BE BOOKED AT A FIXED PRICE DEAL BUT DOESN'T NECESSARILY MEAN TRANSACTION AND PRICE WILL BE REPORTED. THE SECOND PROBLEM IS SOMETHING THAT WAS BROUGHT UP BEFORE, BY THE PANEL, AND THIS IS SAFE HARBOR. I TALKED TO A NUMBER OF TRADERS, YOU KNOW, WHEN THEY SAY, YOU KNOW, GIVEN THAT, YOU KNOW, I AM STRUGGLING TO KEEP MY JOB, YOU KNOW, THE LAST THING I WANT TO HAVE ARE SOME PROBLEMS, YOU KNOW, WITH ERRORS IN THE REPORTED PRICES. I WAS TALKING TO A TRADER IN A BIG FINANCIAL INSTITUTION, AND THEY HAD A ROLE, I THINK IT WAS AN INTERNAL ROLE, THAT THREE MISTAKES WOULD TRIGGER SELF REPORTING TO THE FERC, FORCING ALL TRADERS THAT DON'T WANT IT. SO PROBABLY ONE SOLUTION FOR THE COMMISSION WOULD BE TO REVISIT, POINTED OUT BY OTHER PANELISTS, THE QUESTION OF SAFE HARBOR. EXPAND THE LANGUAGE, YOU KNOW, SEND THE MESSAGE TO THE MARKET PARTICIPANTS, TRESPASSERS WILL BE TREATED WITH LENIENCY. I WOULD BE GLAD TO TALK ABOUT OTHER ISSUES I BROUGHT UP AND GIVE SPECIFIC EXAMPLES OF DEVELOPMENT I'VE BEEN TALKING ABOUT. THANK YOU.

>> THANK YOU. I WANT TO START A DISCUSSION ON PACKING A FEW OF THE THINGS WE HEARD, STARTING WITH SOMETHING MR. ALVAREZ MENTIONED ABOUT SHIFTS IN LIQUIDITY REGIONALLY AND POINT TO POINT, INFRASTRUCTURE BUILDOUT. COULD YOU DISCUSS WHAT YOU'RE SEEING, IF SHIFTS ARE SIGNIFICANT, WHERE LIQUIDITY SHIFTING AND ARE THERE CERTAIN POINTS NOW NOT LIQUID AND IN THE PAST MAYBE 13 YEARS AGO WHEN THE COMMISSION FIRST LOOKED AT THESE ISSUES, HOW THE SHIFTS OF LIQUIDITY ARE AFFECTING INDICES YOU ARE PUBLISHING, YOU CAN TURN OVER YOUR 

>> I'LL START. AGAIN I'LL TRY TO MAKE SURE THE WORD LIQUIDITY, I'M USING IT THE WAY YOU'RE USING IT. AN EXAMPLE, TEXAS EASTERN, A VERY WHAT I WOULD CALL FOR THOSE HAVE BEEN IN THE MARKET A LONG TIME, IS AN AREA WHERE A LOT OF VOLUME MOVES AROUND. IN DECEMBER OF 2016, BID WEEK, JANUARY OF 2017, END OF DECEMBER, THE VOLUME USED WAS 53,005 MMBtus PER DAY, BASICALLY VOLUME TO GO INTO A GENERATING FACILITY, VOLUME AT M 3 TRADES FIXED PRICE IS A LOT MORE THAN THAT. SO THAT'S AN EXAMPLE OF WHERE I WOULD SAY LIQUIDITY IS NOT THE ISSUE, IT GOES BACK TO THE PRICE REPORTING ISSUE WE TALKED ABOUT. ONE OF THE ISSUES THAT CONTINUES TO BE RAISED, MY COLLEAGUES MENTIONED THE MARKET IS HEALTHY. FROM A PRICE REPORTER STANDPOINT IT IS BECOMING RISKIER, THE FACT IN SOME CASES SOME OF US THAT REPORT, WE ARE A LARGER PERCENTAGE OF THAT VOLUME CALCULATED TO PRODUCE THE INDEX THAN WE WOULD LIKE AND IT INTRODUCES RISK TO MY COMPANY, TO MY TRADERS. SO THAT IS THE CORE OF WHAT I'M HERE TODAY TO SPEAK ABOUT, IS THE PRICE REPORTERS, WE NEED TO HELP TOGETHER AS AN INDUSTRY, AS A COMMISSION HERE TO ASK YOU TO BEGIN TO THINK ABOUT HOW, WHETHER SAFE HARBOR IS ONE COMPONENT OF THAT, BUT WHAT I'M SEEING IS THE FACT THAT THERE ARE COMPANIES, AND PLATTS PUT OUT A REPORT THAT HAD THE TOP TEN PHYSICAL MOVERS OF VOLUME, A NUMBER OF MARKETERS IN THERE, NOT JUST PRODUCERS. I UNDERSTAND THE PRODUCER POINT. A NUMBER OF MARKETING COMPANIES THAT BUY AND SELL, JUST LIKE WE DO, AND THEY ARE NOT REPORTING. NINE OUT OF THE TEN ON THIS SHEET DID NOT REPORT, OF THE LARGEST VOLUME GROWERS, VOLUME INCREASED, THAT MAKES SENSE, RIGHT? NINE OUT OF THE TEN  MARK, YOU PUT THIS REPORT OUT AND SHARED IT. NINE OUT OF THE TEN DID NOT REPORT. AND THEY ARE MARKETERS, MOST BEING MARKETERS, THAT'S SOMETHING I WOULD ASK THE COMMISSION TO PAY  YOU KNOW, TO ADDRESS, TO THINK ABOUT, IS, AGAIN, I THINK WE'RE ALL HERE TO SAY HOW CAN WE HELP AND GET MORE REPORTERS, BECAUSE WE'RE ALL ABOUT TRANSPARENCY, BP. THE MORE WE REPORT, THE HEALTHIER THE INDEX. TETCO M 3 IN THE WINTER IS UNHEARD OF. MARYLAND, NEW JERSEY, NEW YORK, PENNSYLVANIA, ALL OF THOSE STATES USE THAT INDEX. UTILITIES, ALL THE BIG UTILITIES. BIG PRODUCERS COMING OUT, MARCEL HAS USED THAT INDEX, FIFTYTHREE FIVE. I'LL LEAVE IT AT THAT.

>> I'D LIKE TO FOLLOW. MAYBE YOU CAN RESPOND AS A FOLLOWUP TOO. WHAT I HEARD I THINK MOST OF YOUR STATEMENTS, THE FIRST QUESTION, YOU FEEL LIKE THE MARKETS ARE HEALTHY, AND I GUESS I WANTED TO GET A LITTLE BIT INTO YOUR STATEMENT THAT IT'S ABOUT THE REPORTING AND NOT NECESSARILY THAT VOLUME ISN'T BEING DONE AT THE LOCATION, CERTAIN LOCATIONS, IF YOU WOULD JUST COMMENT A LITTLE BIT MORE ON THE DISTINCTION BETWEEN THERE'S LOTS OF TRADING LIQUIDITY, LOTS OF PEOPLE IN THOSE MARKETS, IF THAT'S WHAT YOU'RE SAYING, VERSUS IT'S JUST NOT BEING REPORTED, IF YOU COULD COMMENT A LITTLE BIT MORE ABOUT WHEN YOU'RE SAYING THE HEALTH OF THE MARKET, IS THAT RELATED TO TRADING VERSUS PRICE REPORTING, I THINK WHAT I'VE HEARD IS EVERYONE FEELS LIKE IT'S HEALTHY IN TERMS OF TRADING BUT MAYBE THE SECOND PIECE IS NOT THERE. BUT I WOULD JUST LIKE ADDITIONAL COMMENTS ON THAT.

>> I'LL COMMENT A LITTLE BIT, EXCHANGE AROUND THE MARKETPLACE WHERE WE SEE LOTS OF TRADING. I THINK MR. ALVAREZ IS REITERATING A POINT WE'VE SEEN OVER THE LAST SEVERAL YEARS TOO IS RELATED TO INFRASTRUCTURE, BUT ALSO LET ME JUST QUALIFY WHEN WE SAY THE MARKET IS HEALTHIER I THINK WE'RE ALL SAYING THE MARKET IS HEALTHIER, OKAY, AND I THINK THAT WE'VE ALL ACKNOWLEDGED THAT, KNOCK ON WOOD, WE'VE SEEN A NEAR BOTTOM, MAYBE A BOTTOM HOPEFULLY IN TERMS OF LIQUIDITY, GENERALLY SPEAKING, IT DOES SEEM LIKE SOME NUMBERS ARE TRENDING BACK UPWARDS. ONE OF THE THINGS THAT WE OBSERVE AT ICE IS JUST TOTAL VOLUMES ACROSS DIFFERENT REGIONS, DIFFERENT MARKETS, ET CETERA. ONE OF THE INTERESTING THINGS OVER THE LAST SEVERAL YEARS HAS BEEN WATCHING THE SHIFT IN THOSE VOLUMES, WHETHER IT BE IN THE PHYSICAL DAILY MARKETS OR FORWARD FINANCIAL MARKETS. JUST A COUPLE OF THINGS THAT WE HAVE NOTICED THAT SPEAK TO SOME OF WHAT BP IS MENTIONING, WE WOULD AGREE THAT IN HISTORICAL BENCHMARK REGIONAL PRODUCTS LIKE M3, FIVE YEARS AGO NUMBERS LIKE THAT WOULD BE UNHEARD OF. I WOULD BUILD ON THAT THOUGH THERE HAVE BEEN A LOT OF NEW INFRASTRUCTURE ADDED IN THE NORTHEAST, AND SOME OF THAT IN AND OF ITSELF PULLED AWAY SOME MARKET VOLUMES, I'M NOT SAYING THAT BP IS WRONG BY ANY MEASURE, CERTAINLY THAT SOUNDS LIKE A LOW NUMBER. I UNFORTUNATELY DON'T HAVE THE DECEMBER ICE INDEX IN FRONT OF ME. I'D HAPPILY TAKE A LOOK AT IT. BUT JUST IN GENERAL, I THINK ERIC POINTED OUT THAT THEY HAD 134 REPORTERS OUT OF ROUGHLY 1200 SOMEODD COMPANIES, ICE TYPICALLY HAS AROUND 280 DIFFERENT COMPANIES TRANSACTING. SO IN GENERAL, WHILE WE'RE NOT A REPORTER, WE DO SHOW A BROADER COUNTER PARTY DEPTH. I'M NOT SAYING WE NECESSARILY PUBLISHED MORE VOLUME AT M3. I'LL GO OUT ON A LIMB THAT WE DID. WE PROBABLY HAD MORE TOTAL COUNTER PARTIES. BUT THAT'S ONE OF THE REASONS WE HAVE SEEN BENEFIT IN WORKING WITH CHOICE PROVIDERS, INDEX PUBLISHERS, IN MAKING SURE THAT WE TAKE THE TRANSPARENCY AND ROBUSTNESS OF THE ICE TRADING PLATFORM, AND COMBINE IT WITH A FEW OF THE BENCHMARK INDEX PROVIDERS TO ENSURE THAT WE HELP CONTRIBUTE TO THE GROWTH AND TRANSPARENCY AND TOTAL ROBUSTNESS OF THOSE INDEX LIQUIDITY. SOME OF THAT IS STILL IN FLUX. WE HAVEN'T FULLY INTEGRATED WITH ICE. WE'VE BEEN WORKING WITH  EXCUSE ME, INTEGRATED WITH PLATTS, WE'VE BEEN WORKING WITH NGI AND DEXTER SINCE 2007. THERE'S A GENERAL ACCEPTANCE OF INDICES BUT I AGREE THAT THERE'S STILL WORK TO BE DONE TO IMPROVE THE TOTAL VOLUME THAT IS INDEXED. ONE OF THE THINGS I THINK WOULD BE INTERESTING, THIS IS THE FIRST TIME I'VE SEEN A 552 BREAKOUT IN THE FORM YOU PUT OUT. WE AT ICE HAVE OFTEN WONDERS WHAT VERSION OF THE MARKET WE'RE MISSING, RIGHT? FOR OBVIOUS REASONS. GENERALLY SPEAKING, IF YOU ARE TO ASK A TRADER IN THE MARKET AT A VARIETY OF DIFFERENT COMPANIES, I WOULD GUESS BASED ON MY OWN ANECDOTAL FEEDBACK THE AVERAGE NEXT DAY TRADER WOULD ASSUME 80 TO 90% OF NEXT DAY VOLUMES ARE TRADED ON ICE FLAT FORM BUT WE KNOW FROM 552 DATA TOTAL ICE DATA REPRESENTS 65% OF VOLUME. WHAT'S THE OTHER 35%? WE HAVE GUESSES AT WHAT IT IS. MAYBE IT'S TARIFF, TOGETHER, SOMETHING THAT DOESN'T FIT IN THE NORMAL NEXTDAY TRANS ACTED MARKET. I'M NOT SURE IF THAT'S PART OF WHAT WE'RE TRYING TO ACCESS IN TERMS OF INDEX FORMATION, GENERALLY SPEAKING 65% OR SO WOULD BE CONSIDERED PRETTY ROBUST INDEX. THAT SAID, WHEN WE LOOK AT THE FINANCIAL VOLUMES, THE FINANCIAL VOLUMES CONTINUE TO GROW. SO I THINK THAT MULTIPLE YOU MENTIONED EARLIER, 7.6, WILL PROBABLY CONTINUE TO EXPAND AND WON'T NECESSARILY BE BECAUSE INDICES ARE BAD. IT WILL BE BECAUSE THERE'S NEW INFRASTRUCTURE, NEW PIPES THAT ARE IMPORTANT AND THE AMOUNT OF TRADING AND HEDGING AROUND THOSE PIPES IS INCREASING AS THE MARKET GETS HEALTHIER. SO LET'S  WE NEED TO KEEP IN MIND THAT CAUSATION AND CORRELATION ARE DIFFERENT THINGS, AND NEED TO MAKE SURE WE UNDERSTAND WHEN WE ASK THE QUESTION AND GET AN ANSWER IS IT THE RIGHT ANSWER FOR THE RIGHT QUESTION. I KNOW THAT SOUNDS COMPLICATED BUT HOPEFULLY MAKES SENSE WHEN YOU READ IT BACK. I'LL GIVE SOME OTHERS A CHANCE TO TALK. GO AHEAD, MARK.

>> MARK CALLAHAN AT PLATTS AGAIN. TO CLOSE THE LOOP IN ORLANDO'S THOUGHTS, WHAT HE'S REFERRING TO IS SOME ANALYSIS I PRESENTED RECENTLY BASED ON OUR WORK IN THE 552 DATA. THE COMPARISON HE'S TALKING ABOUT WAS I DID AN ANALYSIS OF THE BIGGEST  THE TOP TEN COMPANIES WHO HAD THE LARGEST VOLUME INCREASE FROM 2015 TO 2016 DATA. AND NINE OF THOSE COMPANIES WERE NOT PRICE REPORTERS. SO THAT'S WHAT WE'RE GETTING AT THERE. AND SO I DO AGREE THAT WITH HIS THOUGHTS IT IS A CASE OF HOW TO CAPTURE MORE LIQUIDITY. SO I THINK FROM LOCATIONAL PERSPECTIVE AND PLATTS HAS NOT DONE AN ANALYSIS OF EACH INDIVIDUAL LOCATION OVER TIME TO SEE HOW LIQUIDITY CHANGES, WE CAN'T CONTROL A MARKET IN TERMS OF HOW IT TRADES OR TO MAKE IT TRADE, RIGHT? WE CAN DO OUR BEST EFFORTS TO TRY AND COLLECT AS MUCH DATA AS POSSIBLE THAT DOES TRADE. SO I THINK SOME OF THE LIQUIDITY CHANGES WHEN DO YOU LOOK AT CERTAIN LOCATIONS IS PARTIALLY DUE TO FUNDAMENTALS, IT'S BEEN MENTIONED IN PREVIOUS COMMENTS, FOR EXAMPLE YOU'RE LIKELY TO SEE MORE TRADING IN THE NORTHEAST, IN MORE LOCATIONS THAN YOU MIGHT SEE IN THE GULF COAST BECAUSE YOU'VE GOT A LOT MORE PRODUCTION THERE THAN YOU DID YEARS AGO. SO YOU'RE SEEING FUNDAMENTAL CHANGES IN THAT RESPECT. ALSO YOU'RE SEEING NEW PIPELINES, PIPELINES REVERSING FLOWS. YOU'RE GOING TO SEE CHANGE IN THAT RESPECT. CERTAIN LOCATIONS WHICH YEARS AGO MIGHT HAVE BEEN A KEY POINT THAT PEOPLE HAD HEDGED OFF OF AREN'T ANYMORE, FOR THOSE REASONS. ALSO MYSELF AND OTHER PRIs ADDED MORE LOCATIONS TO OUR INDICES. NOW YOU'VE GOT M3 AND SEVERAL OTHER NEIGHBORING LOCATIONS WHICH MIGHT BE A BETTER LOCATIONAL HEDGE FOR YOU THAT SO THAT PARTIALLY EXPLAINS THAT AS WELL. BUT I DO AGREE THAT REALLY IT'S ABOUT THE POINT OF HOW CAN WE CAPTURE MORE TRANSACTIONS AND WHAT'S GOING ON THERE AND I THINK THAT WILL HELP SOLVE SOME OF THE LIQUIDITY CONCERNS ON LOCATIONAL BASIS SOME PEOPLE MIGHT BE EXPERIENCING. THANK YOU.

>> A CLARIFICATION ON M3 EXAMPLE, IS THAT PRICE NO LONGER FIXED PRICE TRADES NO LONGER BEING REPORTED, OR IS THAT MORE AND MORE PARTICIPANTS RELYING ON INDEX, OR SOME COMBINATION OF THE TWO?

>> SO I WOULD, AGAIN, ECHO MARK'S COMMENTS. I CAN'T  YES, OTHER LOCATIONS, BECAUSE OF THE INFRASTRUCTURE, PEOPLE COULD BE PROXY HEDGING AROUND DOMINION OR SOMEONE IN THE AREA, BUT FIFTYTHREE FIVE IS DRASTIC. THIS IS M3. SO I'M PUTTING  I UNDERSTAND THAT POINT. STILL I THINK IT'S TOO LOW. I THINK FOR THE MOST PART, M3, IN THAT AREA, AS COMMISSION KNOWS, THERE'S A LOT OF BIG UTILITIES, BIG LDCs THAT USE INDEX, RIGHT? SO A LOT OF WHAT HISTORICALLY SINCE I'VE BEEN IN THE MARKET, A LOT OF THAT HAS TO DO WITH BIG VOLUMES GOING IN AND OUT OF NEW YORK OR WHEREVER USING INDEX. SO I THINK YOU'RE SEEING  I THINK FOR THE MOST PART THOSE THAT WERE TRADING FIXED PRICE AND M3, YES, YOU'VE SEEN A SHIFT TO INDEX BECAUSE PEOPLE  YOU KNOW, I DON'T HAVE AN ANSWER AS TO WHY, BUT I THINK YOU'RE SEEING A SHIFT MORE TO JUST USING INDEX. BUT, AGAIN, I'M SAYING THERE IS A LOT MORE VOLUME THAN FIFTYTHREE FIVE OF FIXED PRICE BEING DONE AT M3. I WANT TO MAKE SURE WE'RE CLEAR ON ON THAT. THERE'S ALSO BEEN SHIFT, I'M NOT DOING IT WELL HERE. THE VOLUME HAS COME OFF BUT IT'S STILL  THERE'S ENOUGH VOLUME THERE TO HAVE MORE ROBUST INDEX IS WHAT I'M TRYING TO SAY. I THINK J.C. HAD MENTIONED IT. IT'S HEALTHIER, IT'S HEALTHIER, VOLUMES HAVE COME OFF. BUT THEY ARE STILL HEALTHY. I HOPE I ANSWERED YOUR QUESTION, BUT YEAH.

>> LET VINCE GO.

>> OH. YEAH, SO FOR TETCO M3 FOR JUNE N GI PUBLISHED, 190,000 MBTUs, A DIFFERENT TIME FRAME, UNDERSCORES THE FACT THE AMOUNT OF TRADING CAN VARY GREATLY MONTH TO MONTH. IT'S BASED ON TRADERS' DECISIONS AT THAT MOMENT. THE OTHER POINT THAT I WANTED TO REITERATE WAS THE BUILDOUT IN THE NORTHEAST, I THINK, HAS IMPACTED MAYBE SOME OF THE VOLUMES TRADED AT THE TRADITIONAL POINTS LIKE TRANSCO ZONE AND TETCO M3. THEY USED TO BE THE TWO MAIN DELIVERY POINTS IN THE NORTHEAST. AT SEVEN, TEN YEARS AGO, NGI'S NORTHEAST TABLE HAD MAYBE SEVEN PRICE LOCATIONS. WELL, I LOOK AT OUR PRICE TABLE TODAY IN THE NORTHEAST AND IT HAS  I'M NOT GOING TO COUNT BUT 12 OR 15 IN THE NORTHEAST, AND ADDED APPALACHIAN TABLE FOR THE NEW MARCELLUS AND UTICA, AND THAT SECTION HAS ANOTHER DOZEN OR SO PRICE INDEXES. YES, MAYBE STEALING FROM PETER TO PAY PAUL WHEN TRADERS ARE LOOKING AT MARKETINGS SOURCING GAS TO CUSTOMERS, THERE ARE MORE OPTIONS, SO MAYBE THERE'S LESS TRADING VOLUME AT SOME OLDER OPTIONS. AT NGI WE'VE ALWAYS TOLD FOLKS TO INDEX TO A REGIONAL AVERAGE, NORTHEASTER REGIONAL AVERAGE, OR INDEX TO APPALACHIA REGIONAL AVERAGES. ORLANDO'S CUSTOMERS WANT MORE PINPOINT SOLUTIONA LOCATION NEAR THEIR PLANT OR CITY GATE SO THAT'S A DIFFICULT CONVERSATION. ONE OTHER POINT I WANTED TO LAYER ON COMMENTS THAT I CAN'T LET MARK, ONE UP ME SO I'M GOING TO TRY TO ONE UP HIM. WE DID AN ANALYSIS, SLIGHTLY DIFFERENT, BECAUSE MARK'S ANALYSIS I BELIEVE WAS MARKETERS. WE DID AN ANALYSIS OF PRODUCERS. AND WE DID AN ANALYSIS OF THE CHANGE IN PRODUCTION OF ALL NORTH AMERICAN PRODUCERS FROM 2013 TO 2016. AND OF THE TOP  LET ME GET THIS STAT RIGHT. ONLY ONE OF THE SIX OF THESE 20 COMPANIES THAT REPORT PRAs SO AN INCREASE IN PRODUCTION 2016 VERSUS 2013. AND THAT ONE IS ACTUALLY MR. ALVAREZ'S COMPANY. SO THEY ARE A PRICE REPORTER. THEY SAW A POSITIVE CHANGE IN THEIR PRODUCTION DURING THAT 2013 TO 2016 PERIOD. BUT AS YOU FOLKS IN ROOM ALL KNOW THE OTHER COMPANIES THAT MAKE UP THAT LIST OF POSITIVE CHANGE AND PRODUCTION ARE THE INDEPENDENT PRODUCERS WHO ARE NOT REPORTING TO THE PRAs. AND THAT COULD BE CHANGING. I THINK THERE ARE INDEPENDENT PRODUCERS WHO ARE LOOKING AT THIS. THEY ARE UNDERSTANDING THAT THEY ARE NOW LARGER SHARE OF THE MARKET. THEY ARE HISTORICALLY THEY HAVE NOT SET UP TRADING SHOPS AND THEY HAVE NOT TRADED A LOT OF FIXED PRICE, BUT THEY ARE STARTING TO LOOK AT THAT BECAUSE THEY REALIZE THAT THEY NEED TO BE ACTIVE PARTICIPANTS IN PRICING THE COMMODITY THAT IS THEIR ASSET RATHER THAN BEING JUST PRICE TAKERS. SO THERE'S A SHIFT GOING ON, AND I THINK WE SHOULD ALL GET TOGETHER IN TWO YEARS AND SEE WHAT THAT SHIFT LOOKS LIKE.

>> VINCE AND THEN 

>> VINCE KAMINSKI, RICE UNIVERSITY. YOU KNOW, PERHAPS, YOU KNOW, A QUICK COMMENT ABOUT DIFFERENT DEFINITIONS OF LIQUIDITY. ONE DEFINITION OF LIQUIDITY IS SHEER VOLUME OF NATURAL GAS TO BE MARKETS WHICH HAS INCREASED A LOT GIVEN THE SHALE REVOLUTION. THE SECOND DEFINITION WOULD BE ABILITY TO TRANSACTS AT (INDISCERNIBLE) AND ANOTHER WOULD BE ABILITY TO TRANSACT SIGNIFICANT VOLUMES WITHOUT MOVING THE MARKET. SO LET'S TALK FOR A MOMENT ABOUT THE FIRST DEFINITION OF LIQUIDITY. YOU KNOW, THE SHALE REVOLUTION EXPANDED VOLUMES, AND QUITE FREQUENTLY IN THE LOCATIONS WHEREIN SUFFICIENT PIPELINE CAPACITY. AND FOR MANY BIG PRODUCERS OVERRIDING OBJECTIVE BECAME SELLING GAS. AND PRICE WAS LESS OF A CONCERN, FOR SOME REASONS I WILL COMMENT ON IN A MOMENT. BUT THIS EXPLAINS WHY MANY PRODUCERS PREFER INDEX VIEWS BECAUSE THEY CAN OFFER TRANSACTIONS UNDER WHICH THEY SERVE ONE, TWO, THREE CENTS UNDER THE INDEX TO CAPTURE THE MARKET. AND THAT CREATES STRONG DISINCENTIVES TO ENGAGE IN FIXED PRICE DEALS. OBJECTIVE IS TO SELL GAS, FOR WHICH THERE IS NO HOME. AND THE SECOND REASON MANY PRODUCERS MAY BE INTERESTED IN THE ENGAGING IN THE INDEX DEALS IS THAT BIGGER PRODUCERS WITH STRONGER CREDIT OR ARE ASSETS THEY CAN USE AS COLLATERAL WITH HEDGING ENTITIES, MANY BIG PRODUCERS HAVE THE ABILITY TO HEDGE, IN THE MARKET FIXED PRICES ARE ABOVE SHORTTERM PRICES. THIS MEANS IF PRICES SLIDE DOWN THE PRICE CURVE, THEY DROP. AND THE PRICES THE PRODUCERS GET ARE MUCH DIFFERENT FROM THE REPORTED INDICES BECAUSE THEY HAVE GAINS ON THEIR HEDGES, BUT THE PROBLEMS IS THAT THE ROYALTIES WHICH GO TO THE LANDOWNERS ARE BASED ON THE REPORTED INDEX, INDEX PRICES, WHICH ARE MUCH LOWER. SO THIS IS ANOTHER REASON WHY THE PRODUCERS MAY BE INTERESTED IN ENGAGING IN INDEX DEALS AND AVOID THE REPORTING, OR AVOID FIXED PRICE OUTRIGHT PRICE TRANSACTIONS. AND GOING BACK TO THE SECOND DEFINITION OF VOLATILITY, THE ABILITY TO TRANSACT WITHOUT SIGNIFICANT MARKET IMPACT. YOU KNOW, THIS IS WHAT I HEARD FROM A NUMBER OF TRADERS. YOU KNOW, RICE  ICE IS A VERY WELL DESIGNED TRADING PLATFORM, BUT TRANSACTIONS AND ICE ARE CLOSELY FOLLOWED BY MANY MARKET PLAYERS, AND SOME OF THEM MAY ENGAGE. WHEN THEY SEE PRICES GO UP THEY JUMP ON EMERGING TREND AND EXACERBATE IT. SO THEY HAVE TO BUY A LARGER VOLUME OF GAS, IF THEY ENGAGE IN DIRECT TRANSACTIONS WITH PRODUCERS WITH WHOM THEY HAVE LONGTERM RELATIONSHIP, AND THOSE TRANSACTIONS MAY BE OR MAY NOT BE REPORTED TO THE PRICE REPORTING AGENCY, CHANCES ARE THEY MAY NOT BE REPORTED BECAUSE THEY HAVE OPTIONALITY, WHICH WILL NOT FIT WELL THE FRAMEWORK FOR THE ESTABLISHED INDICES. AND THIS IS NOT SOMETHING HERE. THE TRENDS I MENTIONED, I'VE SEEN IN THE ENERGY MARKETS IN THE PAST, IN THE 1990s INDEX DEALS AT MINUS ONE, TWO, THREE CENTS UNDER INDEX TO DISPOSE OF GAS. WE CAN SEE IN OTHER MARKETS, FINANCIAL AND EQUITY MARKETS, A TREND TOWARDS MARKET FRAGMENTATION, SO TRANSACTIONS TAKING PLACE ON NONPUBLIC VENUES, OR EXCHANGES WHICH ARE NOT OPEN TO ALL THE PLAYERS. THIS IS ESPECIALLY TRUE OF THE EQUITY MARKETS. SO MARKET FRAGMENTATION MAY BE ONE OF THOSE HIDDEN REASONS, YOU KNOW, BEHIND THE SMALLER REPORTED VOLUMES, TO THE PRAs. THANK YOU.

>> I THINK PEOPLE HAVE DISCUSSED AT LENGTH REALLY WHY  WHAT'S CHANGED IN THE MARKET FUNDAMENTALLY OVER THE PAST TEN YEARS. I THINK ONE OF THE POINTS I THINK WORTH NOTING IS THE FERC STANDARDS THAT WERE CREATED NEARLY 15 YEARS AGO HAVE ENABLED INDEX DEVELOPERS REPRESENTED HERE TO ADAPT TO THESE MAJOR CHANGES IN THE MARKET, VERY EFFECTIVELY, NEW INDICES LAUNCHED, OLD INDICES RETIRED. TO ORLANDO'S POINT, THE PROBLEM OF NONREPORTING, THE QUESTION OF NONREPORTING WE'VE BEEN DISCUSSING, THE IMPACT OF THAT IS DISTRIBUTED UNEVENLY. AND DEFINITELY LOCATIONS WHERE HOUSTON SHIP CHANNEL IS QUITE A GOOD EXAMPLE WHERE YOU'RE AWARE OF A LOT OF ACTIVITY BUT THERE'S NOT A LOT OF FIXED PRICE TRADING THAT IS REPORTED. SO WHAT IS INDEX DEVELOPER SUPPOSED TO DO? IS THERE A SUGGESTION THAT WE SIMPLY ABANDON THOSE LOCATIONS AND DON'T REPORT ANYTHING? OBVIOUSLY THAT WOULD BE ABSURD, IN MY VIEW, BECAUSE THEN THAT WOULD RESULT IN EVEN LESS TRANSPARENCY. SO I THINK ESSENTIALLY THERE'S TWO SOLUTIONS HERE. EITHER MORE REPORTING IS ENCOURAGED, WHICH WE'VE ALREADY DISCUSSED, OR YOU COULD  FERC STAFF MAY WANT TO LOOK AT THE EXPERIENCE OF OTHER MARKETS, SO IN THE POST2008 PERIOD, (INDISCERNIBLE) SPENT A LOT OF TIME LOOKING AT PRICE FORMATION, PRICE INDICES, IN ENERGY AND COMMODITY MARKETS AND CAME UP WITH A SERIES OF GUIDELINES AS TO HOW INDEX DEVELOPERS OR PRAs AND I OSCO PARLANCE SHOULD BEHAVE AND YOU SHOULD TRANSACTIONS, DEALS, TAKE PRIMACY BUT IF A TRANSACTION OR DEAL IS NOT AVAILABLE OR IF YOU'RE CONCERNED ABOUT REPRESENTATIVE NATURE OF THAT TRANSACTION OR DEAL YOU WITH REFER TO BIDS OR OFFERS. IF THEY ARE NOT AVAILABLE YOU CAN LOOK AT GEOGRAPHIC SPREADS, LOCATIONAL SPREADS TO POINTS WHERE THERE IS SUFFICIENT LIQUIDITY. I ACCEPT THERE'S A PROBLEM BUT THERE ARE ALSO SOME SOLUTIONS, I THINK IT'S WORTH STAFF BEING OPEN TO ALL OPTIONS HERE.

>> I WANTED TO ASK  UNPACK SOMETHING ELSE MR. ALVAREZ SAID. YOU MENTIONED, I THINK WE'VE HEARD THAT BOTH IN THE DECLINE IN PHYSICAL TRADING VOLUMES AND DECLINES IN REPORTED VOLUMES THAT YOU MENTIONED  I'VE HEARD I THINK TWO REGULATORY RISKS, ENFORCEMENT RISKS, ONE IS SAFE HARBOR PROVISION, ERRORS IN REPORTING TO THE INDEX, AND I THINK MR. ALVAREZ MENTIONED THE PERCEIVED RISK OF BEING SUCH A LARGE PART OF THE FORMATION OF THE PRICE AND PHYSICAL TRADING, REPORTING THAT, THAT OPENS A DIFFERENT RISK TO THE TRADER. I WANTED TO GET COMMENTS ON THE DIFFERENCES BETWEEN THOSE TWO PERCEIVED RISKS AND HOW YOU SEE THOSE IMPACTING THE MARKET CURRENTLY.

>> SO I'LL SPEAK FROM ONE OF THE LARGER PRICE REPORTERS TO PLATTS. AS WE IN SOME INDICES AND LOCATIONS BECOME A LARGER PERCENTAGE OF THE INDEX, OF THE VOLUME, UNKNOWINGLY, CORRECT? I UNDERSTAND THAT'S UNKNOWINGLY. MAKE SURE FOR THE RECORD, OBVIOUSLY. AND SO THIS CREATES RISK, PERCEPTION, PEOPLE START ASKING QUESTIONS. THAT'S PHYSICAL. WHAT DO DO YOU ON THE FINANCIAL SIDE? IT JUST INVITES RISK. I DON'T KNOW HOW ELSE TO ARTICULATE THAT. AND, AGAIN, I'M IN NO WAY  MY TRADERS ARE TRAINED. YOU KNOW, WE'RE OUT THERE TWO WAYS, WHEN WE KNOW THE MARKET IS NOT AS  WE'RE MAKING MARKETS. WE'RE IN THE POSITION AS A MARKETER, AS A LEADING MARKETER, AS A LEADER IN THIS GAS MARKET, MY TRADERS ARE TRAINED TO MAKE MARKETS FOR THOSE UTILITIES, FOR THOSE CUSTOMERS THAT WANT TO PRICE THEIR GAS. IN SOME LOCATIONS IT MAY NOT BE AS LIQUID AS OTHERS. WE'RE A LEADER IN THIS INDUSTRY AND WE WANT TO MAKE MARKETS FOR OUR  FAIR MARKETS FOR OUR CUSTOMERS AND THAT'S WHAT WE DO. BUT BY DOING THAT IT'S INTRODUCING MORE RISK BECAUSE THERE'S LESS PRICE REPORTERS. AND MY QUESTION WOULD BE, WHAT IF MORE CURRENT PRICE REPORTERS DECIDE I DON'T WANT TO DO THIS, THEN WHAT? THEN WE'RE IN A REAL DILEMMA. SO I THINK, YOU KNOW, COLLEAGUE NEXT TO ME FROM ARGUS, HE JUST MENTIONED SOME IDEAS AND THOUGHTS. THERE ARE A NUMBER, SAFE HARBOR WE ADDRESSED OVER AND OVER AGAIN. THAT'S SOMETHING WE NEED TO LOOK AT. ANOTHER SUGGESTION OR IDEA WOULD BE LOOK AT MARKETERS, NINE OUT OF TEN. MARKETERS, NOT INDEPENDENT PRODUCERS OR UTILITIES OR CUSTOMERS, MARKETERS THAT ACTUALLY BUY AND SELL GAS. IS THERE SOMETHING THAT THEY MAY BE  THEY NEED TO BE REPORTING? SO WHEN I TALK TO A FEW INDEPENDENT PRODUCERS, SOME LARGER INDEPENDENT PRODUCERS, THE FIRST THING THEY SAY IS OUR BOARD WON'T APPROVE IT. OUR BOARD WANTS NOTHING TO DO WITH PRICE REPORTING. IT INTRODUCES RISK. AND SO WE'LL JUST, YOU KNOW, PIGGYBACK YOU GUYS AND TAKE INDEX. AND THAT'S WHAT'S HAPPENING MORE AND MORE AND MORE IN THIS INDUSTRY.

>> THANKS. FIRST, I WANT TO THANK VINCE FOR SAYING ICE IS TOO TRANSPARENT, WE LET PEOPLE FOLLOW ON THERE. INTERESTINGLY, TO ECHO A BIT OF COMMENT ABOUT REPORTING, ONE OF THE THINGS THAT WE HEAR FROM COME CUSTOMER THEY FEEL TRADING ON ICE IS IN EFFECT REPORTING BECAUSE ICE DOES CREATE INDICES. OUR INDICES EVERY SINGLE DAY PUBLISH TOTAL VOLUME, WEIGHTED AVERAGE PRICE, NUMBER OF COUNTERPARTIES, NUMBER OF TRADES, THAT HISTORY HAS ALWAYS BEEN AVAILABLE TO OUR CUSTOMERS AND TO ANY ISO RTO THAT HAD NEED INCLUDING GOVERNMENT ORGANIZATION. WE SEE CUSTOMERS THAT WOULDN'T NECESSARILY REPORT TO PRICE REPORTING BUT TRADE ON ICE BECAUSE THEY FEEL THAT'S REPORTING. MANY CONFESS TO TRADE VOLUME ON ICE TO BE COUNTED. I WON'T COMMENT ON SAFE HARBOR HARBOR ISSUE BECAUSE I DON'T HAVE TO DEAL WITH THAT. BUT I DO THINK THAT INTERESTINGLY WHEN WE BEGIN TO INTEGRATE ICE AND PLATTS DATA MORE FULLY I THINK YOU'RE GOING TO SEE A DRAMATIC INCREASE IN THE REPORTED VOLUMES BY PLATTS. YOU'RE GOING TO SEE DRAMATIC INCREASE IN NUMBER OF COUNTERPARTS, INCREASE IN NUMBER OF DEALS. DEXTER CAN COMMENT ON THE EFFECT THAT HAD AND SOME NGI INDICES WHEN WE DID THAT TOO. I'M NOT SAYING THAT'S A COMPLETE SOLVE FOR THE ISSUES HERE. BUT I DO BELIEVE THAT AS SEVERAL PEOPLE UP HERE MAINTAINED GIVE US A COUPLE YEARS. I KNOW THAT'S MAYBE NOT NECESSARILY WHAT EVERYBODY HERE WANTS TO HEAR BUT I THINK THE INDUSTRY IS MOVING IN THE RIGHT DIRECTION. ARE THERE SOME SMALL THINGS THAT WE CAN WORK TOGETHER TO SOLVE M3? I WOULD LOVE TO SEE FIVE TIMES AS MUCH VOLUME TRADED THERE. REALLY WOULD. INTERESTING COMMENT ON LIQUIDITY OF FINANCIAL VERSUS PHYSICAL, SOMEBODY BROUGHT UP SHIP CHANNEL. THAT'S BEEN A GREAT MYSTERY FOR SEVERAL PROVIDERS UP HERE, CERTAINLY IN OUR OTHER THAN INDUSTRY WE SEE IT AS WELL. SHIP CHANNEL IS ONE OF THE LARGEST OPEN INTEREST LOCATIONS IN TERMS OF FINANCIAL TRADING FORWARD, IT'S ONLY ACCELERATING. AND YET ON AVERAGE, PEOPLE TEND TO CARE LESS AND LESS ABOUT TRADING SHIP CHANNEL PHYSICALLY. NOW, AT THE SAME TIME KATIE HAS GROWN SUBSTANTIALLY OVER THE YEARS, AND SO THERE MAY BE WORK TO DO AT SOME POINT LOOKING AT HOW WE COMBINE OR MELD CERTAIN INDICES TO CREATE ADDED DATA BEHIND THEM BUT IN GENERAL THE MARKET DOES A GOOD JOB OF REPAIRING ITSELF AND I THINK THAT WITH SOME SUPPORT FROM YOU GUYS WILL CONTINUE TO DO THAT.

>> THANK YOU. I HAVE JUST A FEW AD HOC COMMENTS AROUND THESE ISSUES. ONE, JUST TO BACK UP, I THINK WE ALL TALK ABOUT WE NEED TO GIVE A BOOSTER SHOT TO THE SAFE HARBOR PROVISION, OR REITERATE THE SAFE HARBOR PROVISION. AND PERHAPS ALONG WITH THAT REITERATE THE POLICY STATEMENT NOW THAT IT'S APPROACHING 15 YEARS OLD. I THINK WE SHOULD ALSO REMEMBER AND MAYBE GIVE THE COMMISSION CREDIT THAT KUDOS FOR WRITING THE DOCUMENT THAT HAS LASTED AND BEEN RELEVANT FOR 15 YEARS. YOU KNOW, I READ IT THE OTHER DAY, AND IT'S STILL OUR GUIDING PRINCIPLE AS PRAs FOR HOW WE CONDUCT OUR BUSINESS, AND I KNOW THAT IT IS THE GUIDING PRINCIPLE FOR THE AUDITS, INTERN AUDITS, THAT COMPANIES ARE DOING AROUND THEIR PRICE REPORTING ACTIONS TO THE PUBLISHERS. SO A BOOSTER SHOT, YES. RESTATING IT, YES. BUT OVERHAULING IT, MAYBE NOT. A COUPLE OTHER COMMENTS ARE THE QUESTION OF  AND THIS IS THE AGEOLD QUESTION, IS IT A PROBLEM OF TRADING WHICH CONTRIBUTES TO REPORTABLE VOLUMES OR IS IT THE PROBLEM OF REPORTING WHICH CONTRIBUTES TO THE 552 REPORTED VOLUMES? AND IT'S DIFFERENT ON A MARKET BY MARKET BASIS. J.C. JUST INDICATED HOUSTON SHIP  MENTIONED HOUSTON SHIP CHANNEL, GREAT EXAMPLE. THERE I SOLEMNLY BELIEVE IT IS A FIXED PRICE TRADING PROBLEM, NOT A REPORTING PROBLEM. WE GET ALL THE ICE DATA, HAVE BEEN GETTING ICE DATA FOR TEN YEARS AND THERE ARE SOME DAYS IT JUST DOES NOT TRADE IN THE NEXTDAY MARKET, AT ALL ON ICE AND DOES NOT TRADE BILATERALLY AT LEAST BY PEOPLE REPORTING TO US. THAT'S ONE THING. AND THEN, YOU KNOW, I HAVE LOTS OF OPINIONS, SOME OF THEM ARE GOOD, ABOUT HOW THE FERC MIGHT INDUCE MORE FIXEDPRICE TRADING. THIS IS A DANGEROUS SORT OF AREA, BUT ONE IDEA IS THAT DOWNSTREAM WE HAVE, YOU KNOW, ORLANDO'S CUSTOMERS, THE UTILITIES, AND THEY ARE VERY HAPPY TO TRANSACT A LOT OF THEIR GAS ON INDEX. PRINCIPALLY BECAUSE IT IS SEEN AS PRUDENT AND JUST BY THEIR PECs. AND SO PERHAPS THERE'S A WAY TO REACH OUT TO THE PUCs AND HAVE THEM CONSIDER HAVING THEM WORK WITH DISTRIBUTORS TO ENCOURAGE THEM TO BUY A PERCENTAGE OF THEIR PORTFOLIO FIXED PRICE. THIS IS A PROCESS. THE FIRST PART IS PUTTING THE IDEA OUT THERE. UPSTREAM MR. ALVAREZ MENTIONED THE MARKETERS WHO ARE BENEFITING FROM THE FREE RIDER EFFECT BY TRADING THE INDEX BUT NOT REPORTING TO THE INDEX. AND, YOU KNOW, JUST ANOTHER IDEA IS WE DO ANNUAL FERC 552, OR PERHAPS IT'S TIME THAT THE FERC WOULD INQUIRE IF YOU ARE NOT REPORTING, WHY ARE YOU NOT REPORTING? AGAIN, I APPRECIATE YOUR TIME. THANK YOU.

>> MARK CALLAHAN, PLATTS. A POINT ON THE CONCENTRATION INDICES, THAT IS SOMETHING THAT PLATTS IS SEEING. SO IF YOU LOOK AT THE TOP FIVE PLAYERS IN TERMS OF VOLUME AND THOSE THAT PRICE REPORT, THEY ARE MAKING UP A LARGER PERCENTAGE OF THE INDICES. SO IF YOU LOOK AT 2016 DATA COMPARED TO PREVIOUS SIX YEARS, THEIR PERCENTAGE OF TOTAL TRADEABLE MARKET HASN'T REALLY CHANGED MUCH. IT'S ABOUT A QUARTER OF THE MARKET. BUT THOSE TOP FIVE PRICE REPORTERS MAKE UP 53% OF 2016 VOLUMES THAT WERE REPORTED TO PRAs. ON A MONTHLY BASIS IT'S EVEN HIGHER, THE TOP FIVE. I'M SORRY THE TOP TEN PLAYERS IN THE MONTHLY MARKET MAKE UP 70%, SO IT ISN'T VERY HIGH, THAT'S REAL. WE DO RECOGNIZE THAT FACT THAT IT DOES INCREASE THE RISK FOR PRICE REPORTING, RIGHT? BECAUSE OF THE PERCEPTION THAT'S INVOLVED, RIGHT? IF YOU'RE A BIG PLAYER, JUST BECAUSE YOU'RE A BIG PLAYER IT'S GOING TO INVITE QUESTIONS. YOUR TRADERS MIGHT BE OPERATING COMPLETELY HONESTLY AND MAKING A MARKET APPROPRIATELY, RIGHT? BUT JUST THE PERCEPTION THAT ACCOMPANIES THAT. SO WE DO AGREE THAT'S SOMETHING THAT NEEDS TO BE ADDRESSED, AND GETTING MORE FOLKS TO PRICE REPORT, YOU KNOW, WILL DO THAT. JUST ANOTHER POINT ON LIQUIDITY, SO THERE'S TWO WAYS TO HANDLE THAT FROM PLATTS PERSPECTIVE. THERE'S THE PRA SOLUTION, RIGHT IN HOUSTON SHIP CHANNEL IS SOMETHING WE'VE TALKED ABOUT WHERE THERE'S BEEN DAYS THAT NO PRAs HAD A PRICE, NO TRADES ON ICE. RECOGNIZING THERE ARE SOME INDEX DEALS, SEVERAL LONGTERM INDEX DEALS THAT PRICE OFF IT, AND FOR TRANSPARENCY PURPOSES, THERE SHOULD BE A PRICE ON THAT DAY. CHANGE METHODOLOGY TO ADD DAILY ASSESSMENTS TO IT. SO IF WE DON'T HAVE ANY REPORTED TRANSACTIONS OR IF WE FEEL LIKE, YOU KNOW, THE ONE SMALL TRANSACTION THAT WE HAVE IS NOT REPRESENTATIVE OF MARKET ACTIVITY, WE DO RESERVE THE RIGHT TO ASSESS A PRICE FOR THAT LOCATION. IF WE DID THAT WE'D PUBLISH ASSESSMENT RATIONAL, HOW WE ARRIVED, WHAT DATA. CLEARLY THE AGREEMENT WITH ICE J.C. MENTIONED WILL HELP INCREASE NUMBER MUCH TRANSACTIONS THAT GO INTO THE INDICES. HOW DO WE GET MORE PEOPLE TO PRICE REPORT, BROUGHT UP HERE MULTIPLE TIMES. I THINK THE CHANGES TO THE POLICY STATEMENT I THINK WOULD BE IMPORTANT BECAUSE AS FOLKS LOOK AT PRICE REPORTING AT RISKREWARD, YOU WANT TO BE THE GOOD CITIZEN, HAVE YOUR TRADES INCLUDED IN THE INDEX, IF THE INDEX COMES OUT DIFFERENTLY THAT CAN COST YOU MONEY, RIGHT? IN ADDICTION PRICE REPORTING ALLOWS PLATTS AND OTHERS TO BE A EXTENSION OF YOUR BACK OFFICE BECAUSE WE'RE LOOKING AT TRANSACTIONS, COMPARING THEM TO EVERYTHING ELSE WE'RE SEEING, WE'RE GOING TO CALL YOU IF SOMETHING DOESN'T LIKE RIGHT COMPARED TO OTHER TRANSACTIONS WE'RE GETTING. BUT I THINK THERE'S MORE THAT CAN BE DONE. I THINK ADDRESSING SOME OF THE WHAT I'LL CALL AMBIGUITY WILL DO THAT, SOMETHING WE CAN TALK ABOUT. BUT I AM LOOKING FORWARD TO PANEL 2, A REQUEST OF GOOD QUESTION TO ASK PANEL 2, WHY THEY AREN'T REPORTING. I CAN SPEAK ANECDOTALLY BUT YOU NEED TO HEAR IT FROM THE FOLKS THEMSELVES. THANK YOU.

>> FIRST DEXTER REMINDED ME OF MY MANNERS. THANK YOU FOR HOLDING THIS PANEL, WE CERTAINLY APPRECIATE IT. I WANTED TO MAKE A POINT THAT THE ICE DATA THAT PLATTS WILL BE INCORPORATING INTO ITS SURVEY, I'M NOT EXACTLY SURE HOW THAT'S GOING TO WORK BECAUSE THEY ARE GLEANING DATA RATHER THAN HAVING THE DATA, YOU KNOW, REPORTED TO THEM. SO I'M NOT SURE HOW THEY  WHAT THEIR SAFEGUARDS ARE IN PLAY, BUT THAT'S FINE. I'M JUST SAYING THAT DATA IS EXCLUSIVE, IT'S NOT MADE AVAILABLE TO ALL PRICE PUBLISHERS. IT'S NOT, YOU KNOW, THAT KIND OF, YOU KNOW, DATA. I MEAN, IT'S LIKE YOU CAN ENCOURAGE PRICE REPORTERS TO, YOU KNOW, REPORT TO ALL PUBLISHERS, BUT IN THE CASE OF ICE DATA THAT'S NOT BEING REPORTED TO PLATTS. PLATTS IS GLEANING THAT DATA UNDER AN EXCLUSIVE AGREEMENT OR NGI OR WHATEVER. SO I WOULD JUST SAY THAT WE SHOULDN'T LOOK UPON THAT AS A PANACEA FOR THE PRICE PUBLISHERS BECAUSE IT ISN'T AVAILABLE. WE SHOULD KEEP OUR FOCUS ON THE FACT THAT WE NEED PEOPLE TO REPORT TO PRICE PUBLISHERS. LET'S JUST KEEP THAT IN MIND. I MEAN, DON'T GET, YOU KNOW, OFF ON THAT, AS THE, YOU KNOW, SOLUTION TO THIS SITUATION. AND ALSO I WOULD JUST SAY THAT IF THE TOP 20 MARKETERS AND PRICE MAKERS OUT THERE REPORTED TO ALL PUBLISHERS WE WOULDN'T BE SITTING HERE. I MEAN, THE OBVIOUS SOLUTION IS FOR PEOPLE  IS FOR FIRMS TO REPORT FIXED PRICE TRADING TO DO FIXED PRICE TRADING, AND TO REPORT IT TO ALL THE PRICE PUBLISHERS THAT, YOU KNOW, HAVE ADOPTED THE FERC STANDARDS. AND THAT'S REALLY ALL I WANTED TO SAY. I WANTED TO MAKE THAT POINT. THANK YOU.

>> THANK YOU. ONE OF THE THINGS I WOULD THINK IS  I'M SORRY, J.C. KNEALE WITH ICE  THAT IS IMPORTANT TO THINK ABOUT IS TRANSPARENCY IN INDEX FORMATION. WE'RE TALKING A LOT ABOUT REPORTED VOLUMES AND NUMBER OF TRADES THAT GOES INTO INDICES WHICH IS OBVIOUSLY IMPORTANT, MORE VOLUME TENDS TO BE A BETTER INDEX. BUT ONE OF THE ADVANTAGES THAT ICE HAS ENJOYED OVER THE YEARS AND THAT OUR CUSTOMERS HAVE ENJOYED OVER THE YEARS IS THE TRANSPARENCY OF INDEX FORMATION, AND WHILE THERE IS DISCUSSION ABOUT POSSIBLY HIGHLY ENCOURAGING TO IN FACT INDUCING MORE FOLKS TO REPORT, UNFORTUNATELY YOU CAN'T GO THE OTHER WAY. I DON'T  SORRY, I DON'T BELIEVE IT'S IN ANYBODY'S BEST INTEREST TO REQUIRE PURELY TRANSPARENT TRADING, THAT BEING SAID THE MARKET HAS ITSELF MOVED TO AN EXTREMELY TRANSPARENT MECHANISM FOR THE VAST MAJORITY CERTAINLY OF NEXTDAY VOLUMES. I BELIEVE AS TOTAL LIQUIDITY IMPROVES IN THE BID WEEK YOU'LL SEE IMPROVEMENT IN BID WEEK AS WELL. IT'S NOT A TOTAL PANACEA BUT ONE ADVANTAGE OF HAVING ICE DATA MORE FULLY REPRESENTED IN TWO GREATER BENCHMARKS IS THAT THEY GET MORE COUNTERPARTIES BUT THEY ALSO GET TRUE TRANSPARENCY, PEOPLE AS VINCE NOTED, PEOPLE CAN SIT AND WATCH THE TRADES THAT ARE BEING ADDED INTO THE INDEX. AND THAT'S AN IMPORTANT PART OF ANY INDEX FORMATION, CERTAINTY ABOUT HOW IT'S CREATED. SO I THINK THAT MOVING TOWARDS MORE TRANSPARENCY IN FORMATION IS CERTAINLY A POSITIVE AS WELL.

>> VINCE?

>> VINCE KAMINSKI, RICE UNIVERSITY. I THINK THAT IT WAS A RECURRING THEME ON THIS PANEL, THE FERC HAS TO PUSH GENTLY THE MARKET PARTICIPANTS TOWARDS REPORTING MORE TRANSACTIONS AND POTENTIALLY ENGAGING MORE IN THE FIXED PRICE TRANSACTIONS. MORE ISOLATION IS PROBABLY ONE THING THAT THE COMMISSION CAN DO. THE PROBLEM IS THAT, YOU KNOW, IT MAY NOT BE VERY EFFECTIVE IF IT RUNS AGAINST ECONOMIC INTERESTS OF MARKET PARTICIPANTS. YOU KNOW, THE QUESTION IS, YOU KNOW, HOW TO CREATE THE ENVIRONMENT IN WHICH THEIR INTERESTS ARE ALIGNED WITH THE NEED FOR TRANSPARENT AND EFFICIENT PRICE FORMATION. ONE PROBLEM WHY INDEX DEALS ARE POPULAR IS THAT THEY ADDRESS CERTAIN REAL OR PERCEIVED INTERESTS OF DIFFERENT MARKET PARTICIPANTS. FOR THE REGULATED UTILITIES, THE OVERRIDING OBJECTIVE IS RELIABILITY. GAS HAS TO FLOW. GAS HAS TO SHOW UP ON A COLD DAY IN WINTER, AND POWER PRODUCERS BEHIND THIS HAVE TO GET NATURAL GAS TO PRODUCE ELECTRICITY. MANY UTILITIES WHICH ENGAGE IN LONGTERM, ENTER INTO LONGTERM TRANSACTIONS, FIXED PRICES AND LOST MONEY WHEN THE PRICES CRATERED WERE CRITICIZED, IN SPITE OF THE FACT THAT GIVEN THE INFORMATION THEY HAD AT THE TIME THEY MADE A DECISION, THE DECISION WAS QUITE RATIONAL. LET ME GIVE YOU ANOTHER EXAMPLE, YOU KNOW WHY THE CERTAIN MARKET PARTICIPANTS LIKE INDEX DEALS. YOU KNOW, THIS MAY BE AGAIN RELATED TO THE ISSUE I MENTIONED IN THE OPENING REMARKS ABOUT COMPLEXITY OF THE ENTIRE INTEGRATED NATURAL GAS AND ELECTRICITY SYSTEM. SO ONE BIG RISK IS THAT A POWER PRODUCERS FACE IS VOLUMETRIC RELATED TO MISALIGNMENT OF NATURAL GAS AND ELECTRICITY TRADES. NATURAL GAS TRADES ARE TYPICALLY CONCENTRATED IN THE FIRST FEW HOURS OF THE DAY, BUT DISPATCH DECISIONS BECOME KNOWN AT SOME POINT DURING THE DAY MUCH LATER, AND ON SOME OCCASIONS POWER PRODUCER MAY REALIZE THAT HE HAS GAS, HE DOESN'T NEED, THAT HE ACQUIRED GAS HE DOESN'T NEED, OR THAT HE HAS TO BUY MORE GALS. AND IT'S VERY DIFFICULT, IT'S VERY DIFFICULT TO ENTER INTO THE TRADITIONAL TRANSACTIONS LATE IN THE DAY. SO ONE SOLUTION WOULD BE TO THINK ABOUT THE MEASURES WHICH WOULD ALIGN BETTER THE SCHEDULES AND GAS TRADING AND ELECTRICITY TRADING AND, YOU KNOW, THINK ABOUT THE MEASURES WHICH COULD STRETCH TRADING IN NATURAL GAS ACROSS LONGER TIMEFRAMES. YOU KNOW, WHAT THE POWER PRODUCERS ARE DOING RIGHT NOW TO AVOID VOLUMETRIC RISK, ENTER INTO INDEX TRANSACTIONS WITH EMBEDDED OPTIONS. THEY PAY SOMETHING EXTRA ABOVE THE INDEX, MAYBE TEN CENTS, BUT THEY HAVE THE RIGHT TO SWING IF THEY NEED MORE GAS AND THEY HAVE THE RIGHT TO PUT BACK TO THE MARKETER IF THEY DON'T NEED GAS. YOU KNOW, THIS ADDITIONAL PREMIUM THEY PAY FOR THIS OPTIONALITY IS MUCH LOWER THAN POTENTIAL LOSSES THEY MIGHT SUFFER IF THEY WERE LEFT WITH EXCESS GAS FOR WHICH THEY HAVE NO HOME.

>> EUAN CRAIK WITH ARGUS. JUST ON THE PLATTS ICE POINT WHICH SEEMS TO HAVE GOTTEN DISCUSSED UNDER THIS QUESTION WHICH BEGAN WITH ENTIRELY DIFFERENT MATTER, BUT I MEAN WE THINK INNOVATION IN INDICES IS A GREAT THING. AND MORE INFORMATION IS GOOD. CAN'T BE BAD, RIGHT? AND COMPETITION DRIVES UP STANDARDS, SO WE ALL COMPETE WITH EACH OTHER. WE TRY AND DO A BETTER JOB AND EARN MORE BUSINESS. IT DRIVES DOWN COSTS, FRANKLY ONE OF THE REASONS WE WERE ASKED TO COME INTO THIS MARKET. AND PLAY THAT ROLE, TO COMPETE WITH THESE EXISTING ENTITIES. SO I THINK IT'S COMPETITION, INNOVATION IS GOOD FOR ALL ENTITIES IN THESE MARKETS. I GUESS MY ONLY SLIGHT CONCERN IS THAT INFORMATION DOESN'T BECOME SILOED BECAUSE THEN THAT MITIGATES AGAINST FURTHER INFORMATION, IF INDEX DEVELOPERS HAVE ONLY A PARTIAL VIEW OF THE MARKET.

>> SWITCH TOPICS A LITTLE HERE, AND TALK ABOUT THE STANDARDS, I WANTED TO ASK INDEXERS FIVE STANDARDS YOU NEED TO ADDRESS IN ORDER TO HAVE YOUR INDICES USED IN FERC JURISDICTIONAL TARIFFS. TALK ABOUT HOW YOUR METHODOLOGIES AND PRACTICES CHANGED SINCE STANDARDS WERE DEVELOPED AND WHETHER YOU BELIEVE THESE STANDARDS ARE STILL RELEVANT TO THE CHANGES IN THE MARKETPLACE SINCE 2003.

>> THANKS, SEAN. JC KNEALE WITH ICE. I CAN REMEMBER PRETTY WELL BACK IN 2003, AROUND SOME OF THE  WHEN THIS WAS FIRST PUBLISHED. AND I MAY MISREMEMBER SO DON'T HOLD ME TO THE FIRE BUT I BELIEVE ICE WAS THE FIRST MAJOR INDEX TO COMPLY WITH ALL OF THESE POINTS. AND FOR THE MOST PART, THOSE INDICES HAVE NOT CHANGED IN 14 YEARS. WE STILL PUBLISH A NUMBER OF COUNTERPARTIES, NUMBER OF DEALS, NUMBER OF TRADES, ALL THE THINGS YOU ASKED FOR. COMPLETENESS IS  I'M NOT SURE HOW WE MEASURE THAT. WE CERTAINLY GIVE YOU 100% OF THE TRADES WE'RE ABLE TO GIVE YOU AFTER WE'VE DONE OUR ERROR CHECKS, ET CETERA. VERIFIABILITY WE'RE THE ONLY 100% COMPLETELY AUDIBLE TRANSACTION RECORD OF INDICES. SO IN GENERAL, I THINK IT'S JUST AS RATIONAL TODAY AS WHEN YOU DEVELOPED IT TO DEXTER'S POINT, IT'S PRETTY INCREDIBLE THAT LEGISLATION WRITTEN THAT LONG AGO REALLY HASN'T BEEN MODIFIED ALL THAT MUCH OR AT ALL. YOU GUYS DID A GREAT JOB AND I DON'T REALLY SEE ANY NEED TO CHANGE THAT PARTICULAR PIECE OF IT.

>> TOM HAYWOOD. I WOULD JUST AGREE. I THINK THE STANDARDS UNDER WHICH WE PUBLISH INDICES AND STANDARDS UNDER WHICH WE'RE GIVEN THE INFORMATION BY THE TRADING FIRMS, YOU KNOW, HAS STOOD THE TEST OF TIME. AND I THINK IT STILL WORKS TODAY. I JUST WANT TO SAY THAT. I DO HAVE PROBLEMS WITH THE INTRODUCTION ON A STATE LEVEL BUT 

>> MARK CALLAHAN, PLATTS. I ECHO THE SAME STATEMENTS. THEY DO STILL APPLY TODAY FROM A PRA PERSPECTIVE IN TERMS OF COLLECTING DATA. THE ABILITY TO HANDLE DATA, VERIFY ACCURACY OF IT. AT THE SAME TIME, PRICE REPORTING IS VOLUNTARY. AND WE CANNOT MANDATE CERTAIN INFORMATION TO BE GIVEN TO US, FOR INSTANCE COUNTER PARTY INFORMATION. AND MARKET PARTICIPANTS HAVE THE REASONS WHY THEY WON'T DISCLOSE THAT INFORMATION BUT WE DO THE BEST WITH THE INFORMATION WE HAVE. AND I THINK THE BEST REPRESENTATION OF THAT IS DONE WITH CONFIDENCE IN INDUSTRIES BUT WE DON'T GET ASKED MY MARKET PARTICIPANTS TO OVERALL YOUR METHODOLOGY OR CHANGE WHAT YOU'RE DOING, RIGHT? AND I THINK THAT THAT SPEAKS VOLUMES TO HOW COMPLETE AND HOW WELL THIS PORTION OF PRICE REPORTING IS WORKING.

>> THIS IS DEXTER WITH NGI. YEAH, SO I GUESS I STILL A LITTLE BIT WITH MY EARLIER COMMENTS, JUST TO LAYER ON OR MAYBE TO CLARIFY, WE SEE POLICY STATEMENT AS FIVE TENETS THAT THE PRICE REPORTERS ADHERE TO AND FIVE TENETS THAT WE AS PRAs ADHERE TO AS BEING ROBUST AND VALID TODAY AS THEY WERE IN 2003. AND THE OTHER COMMENT THAT I HAVE IS THAT THE COMMISSION SHOULD CONSIDER VERY CAREFULLY MAKING CHANGES, SIGNIFICANT CHANGES, OR ANY SIZEABLE CHANGES TO THAT POLICY STATEMENT BECAUSE IT MIGHT CAUSE THE MARKET HEARTBURN, IT MIGHT  YOU KNOW, THERE ARE PROCESSES AND PROCEDURES THAT HAVE BEEN PUT IN PLACE AT NO SMALL EXPENSE BY THE PRICE REPORTING COMPANIES TO ADHERE TO THAT POLICY STATEMENT. AND I WOULD SURE HATE FOR GOOD INTENTIONS TO GO BAD, AND FOR CHANGES TO THE POLICY STATEMENT TO CAUSE COMPANIES TO DROP OUT OF REPORTING BECAUSE THEY FIND IT MORE ONEROUS OR HAVE TO GET DELOITTE BACK IN OR ERNST & YOUNG BACK IN TO FIGURE THINGS OUT. THAT'S MY WORD OF CAUTION. THANK YOU.

>> ARE ANY OF THE FIVE STANDARDS MORE DIFFICULT FOR YOU OVER TIME TO IMPLEMENT, KEEP UP WITH?

>> I THINK MARK SPOKE TO THE QUESTION OF VERIFIABILITY BECAUSE DATA SUBMITTERS WILL NOT DISCLOSE COUNTER PARTY NAMES. YOU ONLY EVER HAVE ONE PART OF THE DEAL. SO YOU'RE SOMEWHAT RELIANT ON THE COMPLIANCE PROGRAMS OF THOSE COMPANIES, AND THEIR FEAR OF AUDITS AND INVESTIGATION BY YOUR GOOD SELVES. BUT THE VERIFIABILITY ANGLE OF IT, YEAH, IT'S PROBABLY THE WEAKEST ELEMENT OF THE FIVE, THE FIVE STANDARDS.

>> I WOULD SAY THAT I'D BE INTERESTED TO HEAR THE ANSWER TO THE SAME QUESTION FROM PANEL 2. THIS IS DEXTER WITH NGI. EXCUSE ME. BUT MY ANSWER, BECAUSE WE HEAR SOME OF THIS FROM THE PRICE REPORTERS IS THAT THE ERROR CORRECTION IS  WE GET QUESTIONS FROM TIME TO TIME ABOUT THEM, ABOUT, YOU KNOW, HOW LONG AFTER A TRADE HAS BEEN SUBMITTED SHOULD THEY FIND THAT THERE'S AN ERROR IN THAT SUBMISSION, SHOULD THEY BE REQUIRED TO REPORT THAT, ET CETERA. SO MAYBE THERE'S SOME FINE TUNING OF WHAT THE STANDARDS ARE AROUND ERROR CORRECTION.

>> THANK YOU.

>> YEAH, THIS IS SOMEWHAT TANGENTIAL TO THE QUESTION YOU ASKED, BUT I WOULD LIKE TO MENTION SOME DEVELOPMENT WHICH MAY BE POTENTIALLY IMPORTANT. LAST YEAR'S EUROPEAN UNION INTRODUCED THE REGULATION REGARDING BENCHMARKS. AND BENCHMARK IS A TERM, EUROPEAN TERM, FOR THE U.S. PRICE INDICES, AND THIS IS AN INTERESTING REGULATION BECAUSE, YOU KNOW, IT'S BASED ON PRINCIPLES FORMULATED BY IOSCO FOR THE OIL PRICE REPORTING ORGANIZATIONS, BUT GOES BEYOND THE PRINCIPLES WHICH WERE CONTAINED IN THE DOCUMENT. WHAT IS INTERESTING, IT INTRODUCES DIFFERENT CATEGORIES OF BENCHMARKS OR INDICES. YOU KNOW, YOU ARE EITHER CRITICAL, CRITICAL INDEX, SIGNIFICANT INDEX, OR YOU'RE NOBODY. IN THE CASE YOU'RE CRITICAL INDEX, THE REGULATORS HAVE THE RIGHT TO OBLIGE CERTAIN ENTITIES TO REPORT PRICES, TO THE PRICE REPORTING ORGANIZATIONS. THIS HAPPENS IN THE CASE OF  I THINK THE LEGAL TERM IS SUPERVISED ENTITIES. THE EUROPEAN UNION REGULATION RECOGNIZES UNIQUE CHARACTER OF COMMODITY INDICES AND RULES THAT APPLY TO COMMODITY BENCHMARKS ARE SOMEWHAT DIFFERENT. BUT UNDER SOME CONDITIONS, THOSE INDICES MAY BE FOUND TO BE CRITICAL AND IN THIS CASE THEY WILL BE SUPERVISED AND WATCHED MORE CLOSELY. SO WHAT I THINK WHAT MAY BECOME AN ISSUE AT SOME POINT IS THAT THERE WILL BE A NEED FOR CROSSATLANTIC HARMONIZATION OF REGULATIONS GIVEN MANY PRICE REPORTING ORGANIZATIONS OPERATE, AND AT SOME POINT REGULATORS HERE AND IN THE EUROPEAN UNION MAY FACE THE TASK OF HARMONIZING THE RULES, UNDER WHICH THE PRICE REPORTING ORGANIZATIONS OPERATE. AND I'M CURIOUS, YOU KNOW, THIS IS ON YOUR RADAR SCREEN, IF YOU WORRY ABOUT IT, THINK ABOUT IT, OR JUST YOU'RE WATCHING WHAT'S GOING ON.

>> MARK CALLAHAN FROM PLATTS. YES, WE'RE ARE. ADHERENCE TO THE PRINCIPLES IS SOMETHING PLATTS TAKES SERIOUSLY. FOR NONOIL COMMODITIES WE HAVE UNDERGONE PREVIOUS TWO YEARS ASSURANCE REVIEWS WHICH AS A RESULT OF THOSE REVIEWS WE WERE DEEMED TO BE IN COMPLIANCE WITH IOSCO PRINCIPLES. FOR NONOIL, THERE'S AN INTERPRETATION OF THOSE PRINCIPLES, RIGHT, BECAUSE THE NATURAL GAS MARKET OPERATES FUNDAMENTALLY DIFFERENT THAN THE OIL MARKET. THOSE ARE PRINCIPLES PLATTS TAKES SERIOUSLY AND WOULD WELCOME SOMETHING LIKE THAT.

>> TO SPEAK FOR ARGUS, WE COMPLY WITH THE IOSCO REPORTING PRINCIPLES, WE'VE GONE THROUGH SEVERAL YEARS NOW OF ASSURANCE AUDITS. WE'VE GOT MOST OF OUR BUSINESS COVERED BY THE IOSCO PRINCIPLES, I THINK THIS YEAR WE'RE GOING TO HAVE TO EXPOSE SOME OF OUR U.S. NATURAL GAS INDICES TO IOSCO AS WELL. SO IT'S BEEN A VERY VALUABLE PROCESS I THINK, AND IT'S SOMETHING THAT IOSCO PRINCIPLES ARE SOMETHING THAT MAYBE FERC SHOULD STUDY IN A BIT MORE DETAIL. I FEEL THE EUROPEAN BENCHMARK REGULATIONS WE ARE WORKING HARD TO COME INTO COMPLIANCE WITH THOSE. WE DON'T ANTICIPATE THAT THEY WILL AFFECT OUR BUSINESS DRAMATICALLY, HOWEVER.

>> DEXTER AT NGI. WE HAVE NOT DONE AN IOSCO REVIEW, AND IT IS NOT CLEAR THAT WE  BEING NGI OPERATES ENTIRELY IN NORTH AMERICA THAT WE NEED TO. WE DO DO AN ANNUAL AUDIT, EXTERNAL AUDIT, WE HAVE AN OUTSIDE COMPANY THAT COMES IN ONCE A YEAR AND AUDITS US, THAT WE ARE IN SUBSTANTIAL COMPLIANCE WITH THE FIVE TENETS OF THE FERC POLICY STATEMENT. THANK YOU.

>> VINCE.

>> ACCORDING TO THE PRICE INDEX ORDER, THE STAFF PRESENTATION THERE WAS SOME STATISTICS ON THE NUMBER OF HOUSES THAT MIGHT BE CONSIDERED OR ARE CONSIDERED UNDER THE METRICS IN THERE, THRESHOLDS, LIQUID. DO YOU THINK THAT GIVEN WHAT YOU'VE TALKED ABOUT AS SHIFT IN KIND OF WHERE VOLUMES ARE TRADED, THE VOLUMES ARE SEEN IN THE MARKET, THAT NUMBERS ARE TOO HIGH OR TOO LOW IN CERTAIN MARKETINGS AND SHOULD BE REVISITED?

>> WOULD YOU MIND REPEATING THE QUESTION. I DIDN'T GET THE END.

>> LIQUIDITY THRESHOLDS, DO THEY  IS THERE A SENSE THAT THOSE ARE STILL APPROPRIATE GIVEN THE CHANGES IN THE MARKET OVER THE YEARS, AND THE SHIFTS IN THE LIQUIDITY?

>> YOU'RE REFERRING TO ERIC AND MATTHEW'S  SO NATURALLY I'M CURIOUS, 13 OUT OF 125 WERE LIQUID FROM BOTH PLATTS AND NGI. SO MY NATURAL CURIOSITY WANTS ME TO KNOW HOW I CAME OUT VERSUS MARK. [LAUGHTER] THAT'S A SEPARATE PROBLEM. ONE THING I DID, YOU KNOW, I THINK I SAID THIS EARLIER IS THAT WE ARE OFTEN ASKED IF YOU ARE PUBLISHING AN INDEX THAT HAS LOW VOLUME TYPICALLY OR LOW NUMBER OF DEALS TYPICALLY WHY DON'T YOU JUST GET RID OF THAT INDEX. AND WE LOOK AT THAT AS, YOU KNOW, AGAIN CAVEAT EMPTOR, WE PUT THE INFORMATION OUT THERE, VOLUME AND NUMBER OF DEALS, IF THE MARKET CARES TO LOOK AT THAT INFORMATION IT'S MARKET INFORMATION IN AND OF ITSELF. SO AS FOR LIQUIDITY THRESHOLDS, I HAVEN'T LOOKED AT THEM RECENTLY FOR THE TARIFFS, BUT I REMEMBER AROUND THE TURN OF THE CENTURY WHEN WE WERE DOING THIS, IT WAS TIER 1 WAS ABOVE 100,000 A DAY, TIER 2 WAS BETWEEN 25,000 AND MMBPUS, TIER 3 BELOW 25,000 A DAY. STATISTICALLY I THINK A VAST MAJORITY OF OUR DAILY INDEXES ARE ABOVE 100,000 A DAY, AND A GOOD PERCENTAGE OF OUR BID WEEK INDEXES ARE ABOVE 100,000 MMBtus A DAY, AND THE ONES THAT AREN'T ARE DENOTED AS SUCH. THANK YOU.

>> ORLANDO ALVAREZ WITH BP. SO, YEAH, MARK IS GOING TO LOOK AT ME, HAVE YOU TOO MUCH DATA OVER HERE. [LAUGHTER] A LOT OF PLATTS DATA THAT I LOOK AT, ACTUALLY GOING BACK TO THE M3 DISCUSSION THAT WE HAD SO I COULD PUT AN END TO THAT ONE, THE VOLUME, THE DEAL VOLUME WAS OVER 150,000 A DAY. FIFTYTHREE GOT REPORTED. 150 IN THE OLD DAYS, IT WAS MORE THAT THAT, TO MARK AND J.C.'S COMMENT, 53 OF 150ISH. TO ANSWER YOUR QUESTION, SEAN, THE LOCATIONS WHERE WE SEE, AND AGAIN WHAT I HAVE IS DEALS DONE, VOLUME AND REPORTED VOLUMES, YOU SEE THE GAP. WHERE YOU SEE ACTUALLY THE DEALS ARE HISTORICALLY WAY OFF, AND THEN ON TOP OF THAT REPORTED VOLUME IS A LOT LOWER, ARE AREAS LIKE SO CAL, PG & E, MISH CON CITY GATE, YOU SEE VOLUMES GOING UP, SHIP CHANNEL, CHICAGO, SOME AREAS LIKE THAT. THE WEST, ROCKIES ARE ANOTHER BIG ONE. ROCKIES REPORTED VOLUME IN THE ROCKIES IN MAY WAS ACTUALLY HIGHER BUT YOU HAD A TREND UP IN THE FIRST PART OF 17, BUT IT'S BEEN GOING DOWN PRETTY QUICKLY. THOSE ARE THE AREAS WHEN WE LOOK, THOSE ARE THE AREAS WHERE ROCKIES, SO CAL, PG ANDE, MISH CON, CITY GATE, TO ANSWER YOUR QUESTION WHERE WE SEE VOLUMES GOING DOWN AND PRICE REPORTED VOLUMES EVEN LOWER.

>> SO I THINK THE QUESTION IS DO YOU WANT PRICE TRANSPARENCY OR NOT. IF WE'RE SAYING THAT ANY INDEX WITH LESS THAN A DAILY INDEX OF LESS THAN FIVE TRADES SHOULD BE DELISTED OR DELETED, YOU WOULD CREATE A GREAT DEAL MORE OPACITY IN THE MARKET. PRICE INDICES PRODUCED BY OUR COMPANIES ARE USED FOR WAY MORE FUNCTIONS THAN IN STATE PIPELINE TARIFFS. THINGS LIKE MARKET TO MARKET, USED FOR LOCAL SALES AND PURCHASES. USAGE EXCEEDS WHAT WAS DETERMINED IN THE ORIGINAL SCOPE OF THE FERC STANDARDS. AND WE FRANKLY GET REQUESTS PARTICULARLY IN THE SOUTHEAST NOW FOR  GIVE ME A CITY GATE PRICE, THERE'S NO MARKET AT MY CITY GATE. BUT EVERYBODY IS CALCULATING THIS PRICE THEMSELVES. SO MUCH EASIER IF YOU WOULD JUST GIVE ME THAT PRICE, WHICH WOULD BE A HUB FOR TRANSPORTATION. THAT WOULD NOT CONFORM WITH CURRENT FERC STANDARDS, BUT IT'S SOMETHING THAT ELEMENTS OF THE MARKET ARE STARTING TO DEMAND. THERE'S A TRADEOFF BETWEEN A DEFINITION, ONE SIZE FITS ALL DEFINITION OF LIQUIDITY AND THE NEED FOR PRICE TRANSPARENCY BY MARKET PARTICIPANTS WHICH IS WHAT WE PROVIDE

>> I'M SORRY, TOM HAYWOOD. I WOULD LIKE TO SAY AS FAR AS LIQUIDITY GOES, THE LIQUIDITY AT A POINT CAN VARY FROM MONTH TO MONTH. BUT YOU HAVE THE SAME REPORTING PARTIES. SO ACTUALLY LIQUIDITY CAN TELL YOU SOMETHING TOO. YOU KNOW, IT'S OF INTEREST. AND SO, YOU KNOW, IN THE END, THE PRICE SURVEY IS A JOURNALISTIC FUNCTION, I MEAN IT IS A SNAPSHOT INTO TRADING. AND LIQUIDITY IS PART OF THAT TRADING. SO TO SAY, WELL, IF YOU DON'T GET THIS MUCH LIQUIDITY YOU SHOULDN'T PUBLISH THE POINT, I THINK KIND OF GOES AGAINST THAT PRINCIPLE, THAT IN THE END WE ARE JOURNALISTS. AND THAT'S THE WHOLE IDEA, YOU KNOW, SO WHAT  IT'S A JOURNALISTIC FUNCTION, BETWEEN US AND BUSINESS.

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  SORRY, TRADING POINTS THAT TYPICALLY TRANSANTED TWO OR THREE TIMES A DAY WERE TRANSACTING TEN OR FIFTEEN TIMES A DAY. PEOPLE FIND A REASSURANCE THEIR NUMBER IS GETTING COUNTED. THEY LOVE SEEING PRINTS UP THERE. IT COMES DOWN TO SOME EXTENT THE COMMENTS VINCE MADE ABOUT WHY CERTAIN PEOPLE PREFER INDEX TRANSACTION. OFTENTIMES WE GET CALLS FROM UTILITIES SAYING CAN YOU INDEX THIS PARTICULAR POINT? WELL, SURE, IF THERE WAS ANY VOLUME WE WOULD. THE PROBLEM IS THERE ISN'T FIXED PRICE REPORTED VOLUMES AT THOSE POINTS SOMETIMES. IT SPEAKS BACK TO WHAT DEXTER SPOKE TO RECORDING  I'M GOING TO WORK EVERYBODY IN ON THIS COMMENT. SPES 'TIS IF I PEOPLE WORK FOR IS SOMETIMES BEYOND ANY REALTIME ABILITIES TO PROVIDE FOR THEM. SO YOU END UP WITH POINTS NEARBY, ET CETERA. THAT'S NOT NECESSARILY A PROBLEM BUT YOU  I DO THINK WE MIGHT HEAR FROM ALL CUSTOMERS, GOSH, I'D LOVE TO SEE MORE AT THIS POINT. IT'S NOT ECONOMIC TO PRODUCE THE PRICE AT THAT POINT NOR IS THERE ENOUGH INFORMATION AT THAT POINT, PERIOD. SO 

>> MARK CALLAHAN, PLATTS. THAT'S A GOOD POINT, J.C AS A PRA, FOR US WE LIKE TO PROVIDE TRANSPARENCY TO THE MARKET. OKAY. AND WHILE THESE LIQUIDITY THRESHOLDS ARE BAROMETERS IMPORTANT TO USE TO GAUGE LIQUIDITY THAN A SERIES OF LOCATIONS IT'S NOT THE ENDALL AS TO WHETHER THAT LOCATION IS VIABLE OR NOT, OKAY? SO PLATTS PRODUCES INDICES FOR 110 LOCATIONS ON A DAILY BASIS. SOME LOCATIONS TRADE EVERY DAY. SOME DON'T. SOME ONLY TRADE IN THE WINTER UNDER EXTREME SCENARIOS, RIGHT? BUT THAT EXAMPLE IS IMPORTANT BECAUSE THAT SENDS KEY PRICE SIGNALS TO THE MARKET WHEN YOU DO SEE ACTIVITY AT CERTAIN POINTS. OKAY. SO I THINK THERE IS BENEFIT TO THAT. AND THE OTHER THING IS, YOU KNOW, WE WANT TO PROVIDE THIS TRANSPARENCY TO THE MARKET BECAUSE ULTIMATELY IT'S UP TO THEM TO DECIDE WHAT TO USE. WE'LL PROVIDE THEM WITH A BASKET OF LOCATIONS WHERE THEY CAN LOOK AT WHAT'S THE LIQUIDITY AT THESE LOCATIONS AND THE PRICES AT WHAT THEY ARE TRADING, AND THEY CAN MAKE THE DECISION AND WHAT WORKS BEST FOR THEM TO HEDGE THEIR RISKS ASSOCIATED WITH THAT, WITH THAT LOCATION. SO IT'S UP TO US TO PROVIDE THAT TRANSPARENCY, DO WHAT WE CAN. IT'S UP TO THE MARKET TO DECIDE REALLY WHAT WORKS FOR THEM. THANK YOU.

>> MR. ALVAREZ?

>> YEAH, ORLANDO ALVAREZ WITH BP. I THINK THERE'S A  WE'RE GOING TO THE 552 DATA, TALKED ABOUT 25,000 A DAY BEING WHAT I REMEMBER HEARING, $25,000 A DAY BEING THE THRESHOLD. THERE ARE SOME CASES WHERE I GUESS I DON'T HAVE THE ANSWER, I'M NOT TRYING TO  BUT IF THE PRAs ARE GETTING  THEY SEE IT'S 20 OR 30 A DAY, THEY SEE THERE'S REPORTED, THEY SEE A LOT MORE VOLUME OUT THERE, IS THERE SOMETHING ELSE THEY CAN DO AT THAT POINT IN TIME INSTEAD OF JUST PUBLISHING THE 20 A DAY, OR IT COULD BE ONE DEAL, TWO A DAY, TWO CONTRACTS A DAY AND IT GETS PUBLISHED AS AN INDEX. MAYBE THERE'S 100,000, 200,000 BEING TRADED THAT DAY. COULD THERE BE SOME SORT OF ASSESSMENT, CALL THE BROKERS, GET THE BROKER MARKET IN, I DON'T KNOW, TO REALLY LOOK AT THE MARKET, FIGURE OUT IF SOMETHING ELSE CAN BE DONE TO GET A MORE ROBUST INDEX IN THERE, THAT WOULD BE MY  SOMETHING LIKE THAT. I'M NOT  I'M JUST THROWING IDEAS OUT.

>> TO FOLLOW TO THAT POINT A LITTLE BIT CAN YOU TALK ABOUT WHICH POINT WE'LL MAKE AN ASSESSMENT FOR INDICES, VOLUME OR NUMBER OF TRADES, WHAT THRESHOLDS ARE AND HOW THAT IMPACTS?

>> MARK CALLAHAN AT PLATTS. WE DO NOT HAVE THRESHOLD IN TERMS OF NUMBER OF TRADES OR COUNTERPARTIES. WHAT WE'LL DO IS LOOK AT THE  LET'S SAY WE HAVE ONE TRADE AT ONE LOCATION, THE VOLUME WEIGHTED, ONE TRADE, WE'LL LOOK AT THAT PRICE FOR THAT LOCATION IN RELATION TO OTHER NEIGHBORING LOCATIONS WHICH ARE MORE LIQUID, AND MAKE A DETERMINATION AS TO WHETHER WE FEEL LIKE THAT PRICE IS REPRESENTATIVE. NOW, IN TODAY'S ENVIRONMENT WHERE WE TEND TO SEE LOW VOLATILITY, WITH LOW PRICES, THAT'S A LITTLE BIT EASIER, RIGHT? SO BUT IF WE FEEL LIKE THAT PRICE IS NOT REPRESENTATIVE, THEN WE WILL USE OTHER MARKET INFORMATION THAT WE CAN GATHER TO TRY AND ASSESS A PRICE WHICH WOULD BE. WHICH WE FEEL WOULD BE REPRESENTATIVE. SO WE DON'T HAVE ANY HARD AND FAST RULES. IT'S PART OF THE EDITORIAL JUDGMENT WE INCORPORATE INTO OUR METHODOLOGY.

>> YEAH, AND JUST FOR OUR PART, I MEAN, VERY SIMILAR FOR DAILIES WE  IF THERE'S NO TRADE DONE WE JUST LEAVE IT BLANK BECAUSE TYPICALLY PEOPLE ARE PRICING OFF AN AVERAGE OF SEVERAL DAYS. AND THAT'S BECAUSE THAT'S WHAT THE MARKET ASKS US TO DO. FOR MONTH, BID WEEK, MONTHLIES, WE WILL MAKE AN ASSESSMENT BECAUSE THAT'S JUST TOO BIG A HOLD IF SOMEONE HAS A CONTRACT PRICING INDEX SO WE'LL MAKE ASSESSMENT BASED ON SIMILAR INDEXES IN THAT REGION AND THE TRANSPORTATION COSTS TO THAT POINT.

>> DEXTER FROM NGI. WE DON'T CURRENT I DO INTO ASSESSMENTS. NGI HAS BEEN LUCKY ENOUGH NOT TO DO ASSESSMENT FOR MORE THAN TEN YEARS REALLY NOW SINCE THE CHALLENGES AROUND THE TURN OF THE CENTURY WITH INDEXES. AND BUT WE ARE REVIEWING OUR POLICY ON ASSESSMENTS CURRENTLY, AS I'VE SAID EARLIER BID WEEK IS THE BIGGER CONCERN. AND BUT IF WE ARE TO EVER RESTART THE ASSESSMENT PROCESS IT WOULD BE DONE  BE MADE HIGHLY TRANSPARENT AND IT WOULD BE USING RELEVANT MARKET INFORMATION, YOU KNOW, THAT WE HAVE AVAILABLE, BID ASKS FROM ICE, SUPPLY DEMAND, IN THE ABSENCE OF MARKET AVAILABLE DATA, YOU KNOW, EITHER FROM THE ICE OR DIRECTLY REPORTED TO US FROM OUR PRICE REPORTERS.

>> DO YOU SEE THE NEED OR HEAR ABOUT A DEMAND FOR MORE TRANSPARENCY INTO THE CURRENT ASSESSMENTS THAT YOU'RE DOING? TO ALL THE PANELISTS.

>> WELL, I COULD KICK OFF THAT. I THINK UNDER THE IOSCO PROTOCOLS AND THIS WOULD AFFECT MARK MORE THAN ME UNFORTUNATELY IN THIS INSTANCE, AND HE CAN SPEAK FOR HIMSELF I'M SURE, BUT, YEAH. I MEAN THERE'S A REQUIREMENT TO PROVIDE AN ASSESSMENT RATIONALE IF A FINANCIAL INSTRUMENT IS SETTLING ON AN ASSESSMENT. SO YES, THERE'S THAT REQUIREMENT

>> MARK CALLAHAN FROM PLATTS. THERE HASN'T BEEN A DEMAND FROM MARKET PARTICIPANTS OR THOSE WHO SETTLE ON OUR PRICES TO DO THAT. IT'S SOMETHING THAT AS A PRA WE HAVE VOLUNTARILY CHOSEN TO DO IN ORDER TO BE MORE TRANSPARENT IN OUR APPROACH. SO THAT IS THE ASSESSMENT RATIONALE WHEN WE DO ASSESS A PRICE, IT IS ADHERENCE TO THE IOSCO PRINCIPLES FOR PRAs. IN ADDITION, THE ICE AGREEMENT IS ANOTHER LEVEL OF THAT WHEREAS CURRENTLY IF A DEAL WERE TO TRANSACT ON ICE, THERE'S UNCERTAINTY IN THE MARKET BECAUSE THOSE FOLKS WHO ARE WATCHING AND SEE THAT TRADE DON'T KNOW THE PARTICIPANTS AND DON'T KNOW IF EITHER COMPANIES ARE PRICE REPORTER, THEREFORE THEY DON'T KNOW IF THAT DEAL WILL BE PART OF THE PLATTS INDEX FOR THAT DAY. BUT WITH THE AGREEMENT WITH ICE THAT WILL GO AWAY, AND J.C. TALKED ABOUT THE TRANSPARENCY AROUND PRICE FORMATION. WE THINK THAT'S GOING TO BE A BIG IMPROVEMENT IN THE INDUSTRY BECAUSE AS YOU'RE WATCHING THESE MARKETS TRADE ON THE ICE EXCHANGE THROUGHOUT THE MORNING, YOU'VE GOT COMPLETE CONFIDENCE THAT THOSE TRADES WILL BE PART OF THE INDEX.

>> THANK YOU. WE'VE WORKED THROUGH THE FOUR MAIN TOPICS. I WANT TO ASK OTHER PEOPLE AROUND THE TABLE HERE IF THEY HAD FOLLOWUP QUESTIONS.

>> ON THIS ISSUE OF ASSESSMENTS, ARE THEY MORE COMMON IN THE MONTHLY MARKET OR DAILY MARKET, WHICH REQUIRES MORE?

>> MARK CALLAHAN WITH PLATTS. SO OUR MONTHLY METHODOLOGY HAS INCORPORATED ABILITY TO DO ASSESSMENTS FOR SEVERAL YEARS, FOR THE PAST ABOUT 2 1/2 YEARS WE'VE PUBLISHED ASSESSMENT RATIONES WHEN WE DO ASSESS A PRICE. ABILITY TO DO ASSESSMENT IN DAILY MARKETS IS SOMETHING WE'LL BE STARTING LATER THIS YEAR WHEN WE IMPLEMENT THE TENETS OF THE AGREEMENT WITH ICE.

>> DO YOU HAVE AN EXPECTATION ABOUT WHETHER IT WOULD BE GREATER IN DAILY OR MONTHLY MARKET BASED ON WHAT YOU LOOKED AT IN THE PAST?

>> THAT'S A GOOD QUESTION. I MEAN, WE ASSESS APPROXIMATELY SIX TO EIGHT MONTHLY LOCATIONS ON A DAILY BASIS TODAY. I HAVEN'T DONE THE ANALYSIS AROUND THE NUMBERS BUT I WOULD EXPECT US TO DO A SIMILAR NUMBER OF DAILY ASSESSMENTS OVER THE 110 LOCATIONS THAT WE HAVE. I SHOULD SAY THAT IT'S NOT A REQUIREMENT TO DO AN ASSESSMENT. IF WE DON'T HAVE MARKET INFORMATION, WE FEEL LIKE WE CAN'T PUT A PRICE ON A LOCATION, WE WON'T DO SO. BUT I THINK IT'S FAIR TO SAY IT'S GOING TO BE IN THE SAME RANGE.

>> EARLIER IN THE DISCUSSION ABOUT THE 2003 POLICY STATEMENT WE HEARD THERE'S NOT A NEED FOR COMPLETE OVERHAUL, BUT I BELIEVE MR. CALLAHAN SAID WORK CAN BE DONE, THERE'S AMBIGUITY IN INTERPRETING THE POLICY STATEMENT. COULD YOU ELABORATE FURTHER ON THAT PLEASE?

>> SURE, CAROLYN. ABSOLUTELY. SO ONE EXAMPLE WOULD BE REQUIREMENT THAT PRICE REPORTERS REPORT ALL THEIR TRANSACTIONS TO A PRA. THE QUESTION WE'VE GOTTEN ASKED IN THE PAST, I THINK IT APPEARS FERC STAFF INTERPRETATION OF THIS HAS CHANGED THROUGH THE YEARS IS DOES THAT MEAN ALL DAILY AND MONTHLY TRADES? OR DOES THAT MEAN IF YOU'RE GOING TO REPORT DAILY TRADES, REPORT ONLY ALL YOUR DAILY TRADES? IF YOU WANT TO REPORT MONTHLIES, ONLY ALL YOUR MONTHLY TRADES. THERE'S UNCERTAINTY IN THE MARKET. AS WE LOOK AT WAYS IN WHICH TO POTENTIALLY INCREASE UNIVERSE OF PRICE REPORTERS, CLARIFYING THAT AND ALLOWING A SEPARATION OF DAILY AND MONTHLY REPORTING WOULD BE BENEFICIAL. I THINK YOU WOULD SEE AN INCREASE IN NUMBER OF PRICE REPORTERS WHICH WILL HELP MAKE INDICES MORE ROBUST AND ACCOMPLISH SOME ISSUES BROUGHT UP IN TERMS OF, YOU KNOW, THE LARGER CONCENTRATION THAT WE'RE SEEING OF PRICE REPORTERS AMONGST BIGGER PLAYERS.

>> I WOULD JUST SAY THAT AS WE SAID, YOU KNOW, THE IDEA OF THE REQUIREMENTS FOR REPORTING AND REQUIREMENTS FOR PUBLISHING PRICES, I HAVE NO PROBLEMS WITH THAT. IT MIGHT BE TWEAKED BUT REALLY IT'S FAIRLY  IT'S A FAIRLY GOOD SYSTEM. WHERE WE HAVE A PROBLEM IS IN THE SECTION 11 WHERE IT TALKS ABOUT UNDUE BURDENS ON REPORTING, TO MORE THAN ONE PUBLISHER, THE EMPHASIS ON, YOU KNOW, JUST REPORT TO ONE PUBLISHER IS GOOD, WHEREAS WE DON'T FEEL LIKE  IT'S OPENING UP THE IDEA REPORTING TO ALL PUBLISHERS IS A GOOD THING. YOU KNOW, THAT YOU SHOULDN'T BE EXCLUSIVELY GIVING ALL THESE PRICES TO JUST ONE OF THE PRICE AGGREGATORS. ALSO, THE OTHER THING THAT I WOULD JUST SAY IS THAT THERE REALLY NEEDS TO BE A CLEAR STATEMENT THAT REPORTING TO ALL, YOU KNOW, PUBLISHERS THAT, YOU KNOW, HAVE ADOPTED THE POLICY STANDARDS AND ARE IN GOOD STEAD WITH THAT SHOWS A GOOD FAITH ON THE PART OF THE REPORTING PARTY THAT'S GOING TO WEIGH IN THEIR FAVOR THAT, YOU KNOW, IN ANY INQUIRY BY THE VEMO, BECAUSE, YOU KNOW, THIS SHOWS THAT THEY ARE BEING TRANSPARENT. THEY AREN'T TRYING TO PUT ONE OVER ON ANYONE. THAT THEY ARE NOT JUST REPORTING TO ONE PRICE PUBLISHER, THERE MIGHT BE ARBITRAGE OR MIGHT  SOMETHING IS GOING ON THAT FOR SOME REASON THEY JUST FEEL LIKE REPORTING TO ONE, AND ALSO THIS DOESN'T REFLECT THE  SOME OF THIS DOESN'T REFLECT THE CURRENT METHOD OF REPORTING, WHERE, YOU KNOW, IF SOMEONE'S REPORTING TO ARGUS, THEY ARE REPORTING VIA EMAIL. THEY ARE REPORTING THEIR DEALS. ALL THEY HAVE TO DO IS PUT OUR ADDRESS ON THAT EMAIL, PUT US ON THE DISTRIBUTION LIST. AND THEY ARE DONE. SO THE BURDEN OF REPORTING TODAY IS SO DIFFERENT THAN IT USED TO BE. IT WOULDN'T BE THAT HIS REPORTER IS CALLING THREE TRADERS OVER AT, YOU KNOW, BP AND WE'RE CALLING THOSE THREE TRADERS AND PLATTS IS CALLING THOSE THREE TRADERS. THE BURDEN ON THAT SENSE ISN'T THERE ANYMORE. SO THE IDEA OF THE BURDENSOME PROBLEMS OF REPORTING THEY DEFINITELY BE ELIMINATED.

>> THANK YOU.

>> I GUESS I WANT TO  J.C. KNEALE WITH ICE. I WANTED TO MAKE A COUPLE POINTS. ONE IS I WANT TO MAKE SURE THAT WE'RE ALL TRANSPARENT ABOUT THE FACT THAT ZERO PRICE REPORTERS ISN'T A TERRIBLE OUTCOME. IF WE LOOK AT THE ACO NATURAL GAS MARKET THEY HAVE ZERO PRICE REPORTERS. WHY IS THAT? IT TRADE ELECTRONICALLY ON THE SYSTEM. FULLY TRANSPARENT. DOESN'T MEAN EVERY SINGLE TRADE THAT OCCURS IN THE MARKET. BUT IT IS A WIDELY ACCEPTED INDEX, ORLANDO PROBABLY KNOWS BETTER THAN ME BUT THINK COVERS 15% OR SO OF FORWARD FINANCIAL VOLUMES, IN NORTH AMERICA. IT'S WIDELY ACCEPTED. THERE ARE NO ISSUES WITH IT. CGPR ISN'T HERE BECAUSE THEY DON'T NEED TO BE HERE. THE SECOND POINT THAT I WOULD MAKE IS ON THE IDEA OF INDUCING A CUSTOMER TO REPORT TO ALL PRAs BECAUSE THEY REPORT TO ONE IS NOT WITHOUT RISK. IT'S NOT WITHOUT RISK TO THE CUSTOMER, MOST IMPORTANTLY. WHEN A CUSTOMER MAKES A DECISION ABOUT BEING A PRICE REPORTER, THEY DO A LOT OF THEIR OWN INVESTIGATIVE WORK TO DETERMINE IF THEY ARE COMFORTABLE WITH THE PRAs THEY WILL BE REPORTING TO. AND SHOULD THE RULE EXPAND TO ALL, BECAUSE OF ONE, THAT DOESN'T NECESSARILY STOP MANY NEW PRAs FROM POPPING UP, THAT WHILE THEY MAY MEET SOME STANDARDS, MAY NOT NECESSARILY HAVE THE CUSTOMER'S BEST INTEREST IN MIND OR TREAT DATA THE SAME WAY, HAVE THE SAME METHODOLOGY. THERE'S LOTS OF SUBJECTIVITY IN THE INDEX FORMATION BUSINESS BY THE PRAs. AGAIN, THEY HAVE REFERRED TO IT AS JOURNALISTIC PROCESS. SO I DON'T THINK THAT THAT'S NECESSARILY THE RIGHT OUTCOME. ARE THERE THINGS THAT COULD MAKE COMPANIES MORE COMFORTABLE WITH REPORTING TO THEIR CHOSEN PRAs? YEAH, PROBABLY SO. I'M NOT THE BEST ONE TO COMMENT ON THAT. BUT CERTAINLY I DON'T THINK OBLIGING THEM TO REPORT TO ALL IS THE CORRECT OUTCOME EITHER.

>> THIS IS DEXTER WITH NGI. I HAVE ONE COMMENT, IT CIRCLES BACK TO MARK'S COMMENT ABOUT CONFIRMING OR CLARIFYING THE POLICY STATEMENT WITH RESPECT TO REPORTING FULLY AND COMPLETELY IN THE DAILY MARKET, VERSUS REPORTING FULLY AND COMPLETELY IN THE BID WEEK MARKET. I STRONGLY AGREE THAT IT WOULD BENEFIT PRICE REPORTING OVERALL IF THE COMMISSION WERE TO PERMIT DAILY PRICE REPORTING OR BID WEEK PRICE REPORTING OR BOTH. ESSENTIALLY LET THE PRICE REPORTER CHOOSE. HERE IS WHY. YOU KNOW, WE'VE TALKED EARLIER, MAYBE I TALKED EARLIER, ABOUT THE DISTRIBUTORS, LDCs, WHO FAVOR THE BID WEEK MARKET AND MAY DO SOME FIXED PRICE TRADING BUT NOT A LOT. WE TALKED ABOUT POSSIBLE INDUCEMENTS FOR THEM TO TRADE MORE IN THE FIXED PRICE MARKET AND THEN TO REPORT THOSE DEALS. WELL, IF THEY WOULD REPORT THOSE BID WEEK DEALS, THAT WOULD BE GREAT. BUT IF THEY ARE TASKED WITH ALSO HAVING TO REPORT IN THE DAILY MARKET, WHERE THEY DO VERY, VERY LITTLE TRADING AT ALL, BECAUSE THAT'S NOT THE TYPICAL WAY THAT A UTILITY BUYS NATURAL GAS, THEN THEY MIGHT JUST NOT REPORT AT ALL. SO THAT WOULD BE MY RECOMMENDATION. THANK YOU.

>> MARK CALLAHAN AT PLATTS AGAIN. JUST ONE COMMENT. I ALSO DO NOT THINK IT IS A GOOD IDEA TO HAVE A MANDATE THAT IF A PRICE REPORTS TO ALL PRAs. THERE ARE SEVERAL REASONS FOR THAT. AMONG THEM WOULD BE THE METHODOLOGY WILL DIFFER AMONGST DIFFERENT PRAs. SO THE INTERPRETATION OF TRADE DATA THAT GETS RECEIVED MIGHT BE PERCEIVED DIFFERENTLY FROM ONE PRA TO ANOTHER. AT SOME POINT IT'S A MANPOWER ISSUE, RIGHT? THERE'S A COST OF COMPANIES TO PRICE REPORT. THEY HAVE TO PRODUCE THE REPORTS. THEY HAVE TO HAVE PEOPLE WHO ARE AVAILABLE TO TAKE PHONE CALLS FROM US, IF WE HAVE QUESTIONS ABOUT A TRANSACTION. AND I THINK A MANDATE OF THAT SORT WOULD RESULT IN POTENTIALLY, YOU KNOW, A CALL FROM MULTIPLE PRAs ABOUT DIFFERENT TRANSACTIONS, POTENTIALLY COMPLICATES THAT PROCESS AND MIGHT BE ESSENTIALLY A TIPPING POINT FOR A COMPANY TO DECIDE NOT TO PRICE REPORT, IF IT BECOMES TOO ONEROUS ON THEM.

>> WELL, OF COURSE I WOULD KIND OF DISAGREE WITH MARK ON ONE THING, THAT, YOU KNOW, THE AMOUNT OF CALLS THAT YOU GET IS NOT SO GREAT AS TO PRECLUDE ROBUST AND HEALTHY PRICE REPORTING SYSTEM. THE OTHER THING IS THAT, YOU KNOW, YEAH, I WOULD AGREE, I WOULDN'T SAY YOU NEED  FERC NEEDS TO SAY IF YOU REPORT TO ONE, YOU HAVE TO REPORT TO ALL. I WOULD JUST SAY THAT THE POLICY STATEMENT SHOULD ENCOURAGE THE WIDESPREAD DISSEMINATION OF YOUR PRICES WITHIN REASON. I MEAN, YOU NEED TO GIVE THIS TO PEOPLE THAT YOU TRUST. WE HAVE, YOU KNOW, THE POLICY STATEMENTS, WE HAVE LAWS, CONFIDENTIALITY, YOU KNOW. I MEAN, IF THE PRICE REPORTING AGENCY CAN'T DEMONSTRATE THAT, YOU KNOW, I MEAN THAT THE PRICE AGGREGATOR CAN'T DEMONSTRATE IT CAN KEEP THE DATA SECURE, I WOULDN'T GIVE IT TO YOU EITHER. I'M JUST SAYING THAT FERC IN THEIR SAFE HARBOR SHOULD ENCOURAGE THE ROBUSTNESS OF THE PRICE REPORTING SYSTEM, AND THE IDEA THAT, YOU KNOW, THAT YOU SHOULD JUST REPORT TO ONE BECAUSE YOU WANT TO, YOU KNOW, KEEP THE QUESTIONS AT A MINIMUM OR YOU'RE GOING TO INCUR ANY MORE COST AGGREGATING DATA GETTING IT TO A PRICE PUBLISHER IS REALLY NOT EXACTLY THE FACT BECAUSE IF YOU'RE GOING TO GET IN LINE TO REPORT TO MARK, YOU'RE ALREADY DONE THE WORK. AND SO IT'S VERY LITTLE EFFORT TO REPORT TO, YOU KNOW, ARGUS AND EIG, AS LONG AS WE CAN DEMONSTRATE THAT WE CAN KEEP THE INFORMATION CONFIDENTIAL, WE'LL TREAT IT PROPERLY AND THAT WE WILL PROVIDE A GOOD PRICE REPORT, A GOOD PRICE REPORT THAT PEOPLE CAN USE IN THE MARKET, PERHAPS LESS, YOU KNOW, BUT ANOTHER AVAILABLE PRICE SET, THAT'S GOING TO BE VERY MUCH LIKE MARK'S PRICE SET BECAUSE THAT'S HOW THESE INDICES WORK. I MEAN, THESE PRICE PUBLISH  PUBLISHED PRICES ARE OFTEN VERY MUCH ALIKE UNLESS THERE'S SOME HUGE VOLATILITY DURING THE DAY, OR, YOU KNOW, YOU DON'T HAVE  BUT THE MORE ACCESS YOU HAVE, THE BETTER EVERYONE'S DATA IS GOING TO BE. SO THAT SHOULD BE THE ULTIMATE PURPOSE OF THE PRICE REPORTING SYSTEM THAT WE HAVE. THANK YOU.

>> I'M NOT SURE IF THIS IS THE ORIGINAL INTENT OF THE QUESTION OR NOT, BUT FROM TIME TO TIME THE NOTION HAS BEEN RAISED, SHOULD REPORTING OF TRADES BE MANDATORY. AT LEAST BY FORM 552 SUBMITTERS AND I DON'T THINK WE THINK IT SHOULD. I THINK IT WOULD PLACE UNREASONABLE BURDEN ON SMALLER MARKET PARTICIPANTS. I THINK WHAT WOULD BE WAY MORE EFFECTIVE WOULD BE STRONG ENCOURAGEMENT FROM THE COMMISSION. AND ONCE AGAIN REVIEW OF REMOVING SOME REGULATORY RISKS INVOLVED IN REPORTING.

>> I HAVE A QUESTION FOR DR. KAMINSKI. WOULD IT BE BENEFICIAL TO REVISIT OR TO TRY TO DESIGN MINIMUM LIQUIDITY THRESHOLDS?

>> WELL, IT DEPENDS WHETHER YOU ARE  DEPENDS WHETHER YOU ARE TALKING ABOUT PIPELINE TARIFFS OR INDICES USED IN PRIVATE TRANSACTIONS, FOR SETTLEMENT OF TARIFFS, FOR INDEX TRANSACTIONS. I THINK MINIMUM THRESHOLDS ARE JUSTIFIED IN THE CASE OF TARIFF PIPELINES, YOU KNOW, BECAUSE TARIFF PIPELINES AFFECT A LARGE NUMBER OF MARKET PARTICIPANTS AND THEY HAVE NO CHOICE. THEY HAVE TO COMPLY WITH THE TARIFF. IN THE CASE OF BILATERAL TRANSACTION THE COUNTERPARTIES CAN USE JUDGMENT TO ASSESS WHETHER INDICES MAKE SENSE, WHETHER THEY ADDRESS THEIR NEEDS, AND MEET REAL REQUIREMENTS FOR QUALITY AND SOUNDNESS. SO I WOULD  SO I WOULD RECOMMEND MAINTAINING LIQUIDITY THRESHOLDS FOR THE JURISDICTIONAL TARIFFS, BUT I WOULD RECOMMEND AGAINST INTRODUCING THRESHOLDS FOR INDICES USED IN BILATERAL TRANSACTIONS.

>> I GUESS I HAVE A QUESTION FOR THE PANEL. THERE'S SOME COMMENTS EARLY ON THAT DECLINING LIQUIDITY SEEMED TO HAVE LEVELED OFF OR BOTTOMED OUT IN THE DAILY, BUT NO ONE WOULD MAKE THAT ASSESSMENT ABOUT BID WEEK. WE'VE NOTED SOME BID WEEK MARKETS, IT'S NOT EVEN SO MUCH REPORTING AS JUST LIKE FOR INSTANCE WATCHING ICE, TRADITIONAL MARKETS, SHIP CHANNEL HAS BEEN MENTIONED, WE NOTED SOME WEST TEXAS SUPPLY POINTS THAT ARE HARDLY TRADING. IS THERE SOMETHING DISTINCT ABOUT BID WEEK THAT WE SHOULD BE AWARE OF OR IS THE PROBLEM MORE ACUTE, IN YOUR MIND, IN BID WEEK?

>>

>> J.C. A ICE. I'LL THROW OUT SOMETHING, THINKING OUT LOUD, SOME OBSERVATIONS BASED ON INDEX DATA. INTERESTINGLY, WHEN I LOOKED AT OUR INDEX DECLINE IN BID WEEK, YEAR TO YEAR FROM 17 TO 16, DID SEE 8%, IF I COMPARED THAT ALSO WITH OUR e CONFIRM TRANSACTION SYSTEM, BACK OFFICE, IT WAS HIGHER DECLINE WHEN I LOOKED AT THE WHOLE MARKET. SO THAT'S INTERESTING TO ME IN THAT WHAT  THAT ALSO CAN BE A CUSTOMER MIX ISSUE, JUST LIKE INDEX FORMATION IS A CUSTOMER MIX ISSUE BUT GENERALLY SPEAKING MOST OF THE LARGER PARTICIPANTS IN THE GAS MARKET WILL USE OUR e CONFIRM SERVICE. IT MAY BE THAT SOME MARKETS ARE GETTING SMALLER. OKAY. THAT'S ONE ISSUE. ONE ISSUE IS THAT THERE ARE MORE HUBS AND SO YOU DO HAVE A FRACTURED LIQUIDITY. CERTAINLY WHEN  PJM WESTERN HUB TO USE A POWER EXAMPLE IS EXCELLENT EXAMPLE OF THIS. TEN YEARS AGO, WHEN YOU WANTED TO TRADE PJM YOU TRADED WESTERN HUB BY DEFAULT. AND LIQUIDITY AT PJM, IF I'M GOING TO MEASURE WESTERN HUB ONLY IS DOWN AROUND 50% OVER THE LAST SIX YEARS. THAT DOESN'T MEAN POWER LIQUIDITY IS DOWN. POWER LIQUIDITY IS IN FACT FLAT TO UP OVER THE LAST EIGHT YEARS, MUCH BETTER THAN GAS IS ON A RELATIVE BASIS. NOW, IF YOU ASK ANY TRADER IN THE MARKET THEY WILL SAY IT FEELS THINNER, AND IT'S TRUE. IT DOES FEEL THINNER, BUT PART OF THAT IS THE SPECIFICITY. THE MARKET IS TRADING MORE POINTS AND SO YOU HAVE LESS COMBINED LIQUIDITY INTO CENTRAL LOCATIONS. AND THERE IS A PHRASE THAT YOU'VE PROBABLY HEARD, LIQUIDITY BEGETS LIQUIDITY. IT IS MUCH EASIER TO FEEL LIKE TAKING A POSITION IN A MARKET WHERE YOU KNOW THERE IS PLENTY OF LIQUIDITY. IN LESS LIQUID MARKETS, IT IS A RISKIER DECISION TO ENTER THAT MARKET AS GIVEN PRICE LEVELS SIMPLY BECAUSE THERE'S LOWER LIQUIDITY. SO AS MANY PEOPLE HAVE STATED, YES, WE BELIEVE THE LIQUIDITY IS SORT OF BOTTOMED OUT. WE'RE HOPING TO SEE RECOVERY. THE DAILY MARKET IN GENERAL HAS MANY, MANY, MANY MORE TRANSACTIONS, THOUSANDS. AND IT'S EASIER TO SEE THAT PICKING UP QUICKER BECAUSE LIQUIDITY BEGETS LIQUIDITY. IF WE LOOK IN THE BID WEEK MARKETS YOU'RE LIKELY TO SEE THE MORE LIQUID POINTS ON OPEN INTEREST BASIS PICKING UP BETTER. THE OTHER SIDE IS FUNDAMENTAL'S. THERE'S SO MUCH WE CAN DO ABOUT FUNDAMENTALS. ON A DAYTODAY BASIS I MAY NEED TO BALANCE OUT, BY, SELL,ETS, WHEN I'M DOING MY MONTH AHEAD PLANNING SOME PEOPLE AREN'T BOTHERING TO HEDGE MONTH TO MONTH BECAUSE GAS IS GOING TO BE $3. THAT'S THE WAY IT'S GOING TO BE. THAT'S NOT TRUE AT EVERY LOCATION BUT THE SAME LOCATION HOLDS TRUE. I DO THINK IT'S A MULTIFACETED PROBLEM, NOT NECESSARILY A PROBLEM OF REPORTING. IT'S COMPLEX.

>> MARK CALLAHAN AT PLATTS. I THINK THIS IS PROBABLY A QUESTION THAT'S BETTER ANSWERED BY THOSE IN THE MARKET THAT ARE TRADING BUT I CAN SPEAK ANECDOTALLY. I DO THINK THE FRACTURE THAT J.C. IS TALKING ABOUT HAS SOMETHING TO DO WITH THE FACT THERE ARE MOST LOCATIONS BUT EVEN IF YOU WERE TO ADD UP TOTAL VOLUMES TRADED IT IS DOWN OVER TIME. AND SOME OPENING COMMENTS HERE TALKED ABOUT SOME REASONS FOR THAT AND I THINK IT'S ESSENTIALLY THE LOW PRICES AND LOW VOLATILITY, WHICH IS PROBABLY THE BIGGEST FACTOR FOR THAT, WHERE PEOPLE JUST DON'T HAVE THAT FEAR, THAT THE DAILY VOLATILITY EXISTS AND PRICE IS GOING TO MOVE AWAY FROM THAT ESSENTIALLY, RIGHT? SO THEY ARE COMFORTABLE WITH VOLATILITY THEY ARE SEEING IN THE DAILIES, AND IT'S WITHIN THEIR TOLERANCE BAND. THEY SAY, OKAY, I'M NOT WILLING TO LOCK IN THIS PRICE AT A MONTHLY BASIS BECAUSE I'M COMFORTABLE WHERE THE DAILY MARKET'S GOING TO AVERAGE OUT. SO I THINK THERE IS PART OF THAT. WE TALKED ABOUT CHANGE IN THE COMPOSITION OF MARKET PLAYERS, RIGHT, WHERE YOU'VE GOT YOUR PRODUCERS, TYPICALLY DO TRADE AT INDEX. ON THE OTHER SIDE OF THAT YOU'VE GOT YOUR END USERS WHO ARE TRADING MORE INDEX BECAUSE THEY WILL TELL YOU THAT THEY CAN JUSTIFY THAT TO THEIR REGULATORS, RIGHT? IN ORDER FOR THEM TO PROVE THEY ACTED PRUDENTLY IN TERMS OF MANAGING THEIR OBLIGATIONS. SO I THINK IT'S A LITTLE BIT OF ALL OF THOSE.

>> DEXTER WITH NGI. THE BUYER IS ALWAYS RIGHT. SO PRODUCERS AND MARKETERS ARE GOING TO PROVIDE THE RISK MANAGEMENT PRODUCT TO THE  EITHER END USER, STEEL PRODUCER OR ALUMINUM PRODUCERS OR THEY ARE GOING TO PROVIDE THAT RISK MANAGEMENT PRODUCT THAT THE BUYER WANTS, AND THEN I'VE ALREADY TALKED ABOUT THE LDC, AND MARK JUST MENTIONED THAT IT'S PRUDENT TO THE  IT'S BEEN DETERMINED PRUDENT BY THEIR PUBLIC UTILITY COMMISSION. LET'S GET BACK TO THE PURCHASER, END USER, THE BIG COMPANY THAT MAKES WALL BOARD OR FERTILIZER OR STEEL OR ALUMINUM. SO NATURAL GAS AT $2 OR $3 AN MMBtu, IT'S NOT SEA LEVEL PROBLEM IN THESE COMPANIES. AND SO THE PROCUREMENT MANAGER IS MORE LIKELY TO JUST BUY AT INDEX. WHEN NATURAL GAS WAS AT $7 OR $8 AN MMBtu THAT PROCUREMENT MANAGER WAS BUSY WORKING AND DOING HIS JOB IN RISK MANAGEMENT TO TRY AS BEST HE CAN TO GET THE PRICE DOWN, AND IF THAT INVOLVED BUYING AT FIXED PRICE HE OR SHE WAS DOING SO. SO I DO, JUST TO REITERATE, LOW PRICES MAKE THE DECISION TO TRANSACT AT INDEX EASIER.

>> ORLANDO ALVAREZ WITH BP. AS WE TALK ABOUT THE STATE OF THE NATURAL GAS INDUSTRY OR MARKET, THIS IS A BIT OFF OF WHAT WE TALK IN PHYSICAL LIQUIDITY, IT'S IMPORTANT TO RECOGNIZE WHEN YOU LOOK AT OPEN INTEREST IN THE FUTURES MARKET OR SWAPS MARKET, I'M TALKING FUTURE, BASIS FUTURE OR FIXED PRICE FUTURE, LOOK AT CMES, WHAT WE PULLED, WHAT WE'RE SEEING NOW IN THE MARKET IS THAT IF YOU'RE A UTILITY AND COME AND WANT YOUR PRICE HEDGED OUT THE NEXT 5 TO 7 YEARS, FERTILIZER PLANT, WHOEVER, THAT LUXURY FROM BEING IN THE MARKET, THAT LUXURY IS NOT THERE ANYMORE. THREE YEARS OUT, WHEN YOU LOOK AT THE CME, USE THE HENRY HUB AS A PROXY, VERY SIMPLY PUT OVER THE LAST FIVE YEARS WE LOOKED AT IT AND IF YOU WERE IN 2012 TRYING TO PRICE OUT FOR FIVE YEARS OUT, FOUR TO FIVE YEARS OUT, OPEN INTEREST TODAY IS 40% OF WHAT IT WAS IN 2012. DOES THAT MAKE SENSE? SO 40% OF THE OPEN INTEREST RETURN BUSINESS AT THE HUB FUTURES FIVE YEARS AGO. WHAT I'M SAYING IN THE LONG WAY IS SO THE OPPORTUNITY TO HELP CUSTOMERS RISK MANAGE THEIR COMMODITY IN THE TERM IS SIGNIFICANTLY REDUCED. EVERYONE IS  SO THERE'S LESS SPECULATORS IN THE MARKET. LOCAL RULE, NUMBER OF THINGS THAT TOOK BANKS OUT, CAPITAL REQUIREMENTS, YOU SEE LESS SPECULATORS IN THE MARKET. WE SEE A LOT LESS MARKET MAKERS IN THE MARKET. SO THAT TERM BUSINESS, ALL THAT'S DOING IN A WAY IS YOUR RISK PREMIUMS GO UP. NOW IF I'M GOING TO TAKE THAT RISK OUT FOR SEVEN YEARS I CAN'T LAY IT OFF, THE WAY I USED TO LAY IT OFF. SO THAT RISK PREMIUM GOES UP. THAT IS SOMETHING THAT IS PROMINENT IN THIS MARKET, ACROSS PRETTY MUCH EVERY POINT. SO I THINK IT'S VERY IMPORTANT TOO WHEN YOU  WE TALKED ABOUT PHYSICAL AND PRICE REPORTING, BUT IF YOU LOOK AT TOTAL GAS MARKET AND HOW IT WORKS, THESE UTILITIES, LDCs, CUSTOMERS NEED TO HEDGE THEIR PRODUCT. THEY WANT TO HEDGE FERTILIZER PRODUCT OR GAS INPUT, THAT ABILITY TO DO THAT HAS BEEN, I DON'T KNOW WHAT WORD I CAN USE, RADICALLY DIFFERENT THAN FIVE YEARS AGO. A LOT HAS TO DO WITH ALL THE NEW REGULATORY, YOU KNOW, REGULATIONS THAT HAVE BEEN INTRODUCED AS I MENTIONED. VERY IMPORTANT POINT TO MAKE.

>> I GUESS JUST TO CLARIFY, YOU'RE SAYING THE LACK OF OPEN INTEREST BEYOND THREE YEARS IS NOT REALLY A FUNCTION OF THE DECLINE IN PHYSICAL LIQUIDITY IN REPORTING BUT MORE THE FINANCIAL REGULATIONS?

>> THAT'S CORRECT. I WANT TO MAKE SURE IT'S CLEARLY DIFFERENT THAN WHAT WE'VE BEEN TALKING ABOUT BUT YOU CAN'T JUST LOOK AT THE PHYSICAL MARKET. THE STATE OF THE INDUSTRY AND STATE OF THE MARKET, WHERE IT IS, AGAIN TWO YEARS AGO WHEN I WAS IN FRONT OF THE COMMISSION, ALSO IN FRONT OF THE CFTC AS WELL MAKING THAT POINT, IT'S NOT JUST THE PRICE REPORTING AND PHYSICAL PIECE BUT ALSO ABOUT FINANCIAL LIQUIDITY. WE HAVE TO LOOK AT THEM TOGETHER.

>> I JUST WAS GOING TO ECHO ORLANDO'S POINT, MOSTLY FOR THE POINT OF HAMMERING HOME THAT WE'RE TALKING ABOUT TWO DIFFERENT ISSUES, AND WE WOULD AGREE, CERTAINLY I WOULD AGREE, I'LL RAISE MY HAND, THAT FORWARD LIQUIDITY IS VERY DIFFERENT THAN WHAT WE'RE TALKING ABOUT HERE TODAY. AND FORWARD LIQUIDITY IS FOR A VARIETY OF REASONS CHALLENGED RIGHT NOW. I AGREE COMPLETELY WITH ORLANDO THAT PART OF IT HAS BEEN REGULATION THAT HAS FORCED A NUMBER OF RISK WAREHOUSE TYPE CUSTOMERS, SPECULATORS, BANKS, ET CETERA, OUT OF THE MARKET. THERE'S NO INCENTIVE FOR THEM TO PARTICIPATE EVEN IF THEY WANTED TO PARTICIPATE IS ANOTHER PROBLEM BECAUSE FOR THE NEXT TEN YEARS FORWARD CURVE IS ROUGHLY $3. IT'S JUST NOT VERY EXCITING. AND SO WE HAVE SEEN JUST LITERALLY IN THE LAST SIX MONTHS, WE STARTED TO SEE A LITTLE BIT MORE ACTIVITY, FURTHER OUT THE CURVE, BUT IT'S STILL NOT ANYWHERE NEAR WHAT IT WAS WHEN ALL THE BANKS WERE INVOLVED, ALL MARKET MAKERS WERE INVOLVED. THERE WERE MORE HEDGE FUNDS INVOLVED, MORE PEOPLE WILLING TO PUT THEIR OWN MONEY AT RISK FOR AN OPINION. THAT TIGHTENS BID ASK. IT MAKES IT CHEAPER FOR END USERS WHICH ALL OF US ARE ULTIMATELY, AND SO, YOU KNOW, ENOUGH ABOUT THAT. I'M SURE THAT THAT'S CHANGING TO SOME EXTENT FOR A VARIETY OF REASONS BUT IT DOES COME BACK TO ONE PROBLEM THAT I THINK ORLANDO HIT ON EARLIER, A FEW OF US TALKED ABOUT AND I'M NOT SURE WHAT THE GREAT SOLVE IS, HISTORICALLY POINTS LIKE M3 OR SHIP CHANNEL FIVE YEARS WOULD BE TRADED DOZENS OF TIMES A DAY CREATING MASSIVE PILES OF OPEN INTEREST, WHAT HAPPENS TO OPEN INTEREST AS WE GET TO KNOW, NOBODY CARES ABOUT TRADING FIXED PRICE AT SHIP CHANNEL, THAT'S AN INTERESTING PROBLEM THAT I'LL LET THE PRAs, YOU KNOW, COMMENT ON OR AT LEAST THINK ABOUT. THEY DON'T NEED TO COMMENT ON IT NOW BUT THAT'S SOMETHING THAT WE AT ICE ALONG WITH NGI AND PLATTS AND OTHERS AND CUSTOMERS ARE CERTAINLY CONTEMPLATING WHAT THE BEST SOLUTIONS THERE ARE TO SOLVE LIQUIDITY PROBLEMS IN THE NOW VERSUS THE FORWARD.

>> ANY OTHER COMMENTS? THANK YOU VERY MUCH FOR PARTICIPATING. OH, OH. GO AHEAD.

>> I'M SORRY. I DON'T WANT TO 

>> LAST WORD.

>> I DON'T WANT TO OPEN A CAN OF WORMS AND MAKE US LATE FOR LUNCH EITHER. BUT WE'VE TALKED ABOUT  I THINK IT'S IMPORTANT TO MENTION THIS TO THE COMMISSION, THAT WE'VE TALKED ABOUT WAYS IN WHICH YOU CAN CHANGE THE POLICY STATEMENT AND GET PEOPLE TO PRICE REPORT. AND I THINK THAT THERE IS  THIS IS INFORMATION I GET FROM PRICE REPORTERS IN THE MARKET. THERE IS A DISINCENTIVE FOR PEOPLE TO PRICE REPORT. AND THAT IS AROUND THE AUDIT PROCESS OF PRICE REPORTING, SPECIFICALLY SOME OF THE FERC  THE FERC AUDIT THAT GETS DONE. I THINK THERE'S A PERCEPTION AMONGST MARKET PARTICIPANTS THAT PRICE REPORTING AUDIT, SOME WORK NEEDS TO BE DONE, FOR EXAMPLE REDUCTION OF SCOPE. RATHER THAN LOOKING AT 4 1/2 OR 5 YEAR PERIOD REDUCING THE SCOPE. ALSO BEING MORE TRANSPARENT UP FRONT ABOUT THE SCOPE OF THE AUDIT, WHAT WILL YOU BE LOOKING AT, OKAY? I THINK HAVING SOME MORE CONFIDENCE AROUND THAT WOULD HELP PRICE REPORTERS, AS THEY WEIGH RISKREWARD OF MAKING THAT DECISION TO PRICE REPORT. THE SCALES ARE TIPPED IN FAVOR OF DISINCENTIVE FOR SOME RIGHT.

>> THANK YOU. THANK YOU FOR PARTICIPATING. WE HAVE AN EXTRA 15 MINUTES. WE'LL RETURN AT 1:00. THANK YOU. (LUNCH RECESS) ... ...

>> ALL RIGHT. IT'S A LITTLE AFTER ONE SO IF EVERYONE COULD TAKE THEIR SEATS, WE'LL GET STARTED. GOOD AFTERNOON. I HOPE YOU ALL ENJOYED YOUR BREAK. WE'RE BACK FOR THE SECOND PANEL, WHERE WE'RE GOING TO BE TALKING ABOUT THE USE OF NATURAL GAS INDICES AND THE ROLE IN PRICE FORMATION. WE HAVE PANELISTS FROM A VARIETY OF ORGANIZATIONS WHO WILL SPEAK TO THIS TOPIC, AND I AM GOING TO ASK THAT ALL PANELISTS INTRODUCE THEMSELVES STARTING WITH MAR SHARP.

>> DONNIE SHARP, THE AMERICAN GAS ASSOCIATION.

>> COREY GRINDAL, WITH CHENIERE ENERGY. WE'RE THE LARGEST OPERATING FACILITY ONLY OPERATING FACILITY EXPORTING LNG RIGHT NOW IN THE LOWER 48 STATES.

>> (INDISCERNIBLE) PAUL GREENWOOD REPRESENTING THE NEW MARKETS.

>> GREGG BRADLEY, SUPERVISOR AT ISONEW ENGLAND.

>> SUSAN BERGELS, ASSISTANT GENERAL COUNSEL, AMERICAN GAS ASSOCIATION.

>> GEORGE WAYNE, KINDER MORGAN IN THE WEST REGION REPRESENTING ALL OF KINDER MORGAN.

>> GUILLERMO BAUTISTA ALDERETE, THE CALIFORNIA ISO, INDEPENDENT ELECTRIC SYSTEM OPERATOR.

>> LEE BENNETT WITH TRANSCANADA U.S. PIPELINES, TODAY I'M REPRESENTING THE INTERSTATE NATURAL GAS ASSOCIATION OF AMERICA, SO THE VIEWS I'M REPRESENTING ARE NOT NECESSARILY THAT OF MY EMPLOYER.

>> PALLAS LEEVANSCHAIK WITH PATOMAC ECONOMICS, SPECIALIZING IN MARKET MONITORING OF U.S. POWER MARKETS, AND WE'RE THE MARKET MONITOR FOR THE NYISO, NEW YORK ISO AND WE ALSO SERVE AS EXTERNAL MARKET MONITOR FOR ISO NEW ENGLAND.

>> DAVID LOUW WITH MACQUARIE ENERGY, A MARKETER OF NATURAL GAS ACROSS NORTH AMERICA ACTIVE IN ISOs AND MANY PIPES IN NORTH AMERICA.

>> THANK YOU FOR BEING HERE TODAY. I WANT TO REMIND ALL THE PANELISTS SINCE YOU'RE ALL NEW TO THE PANEL THAT WHEN YOU WANT TO SPEAK PLEASE TURN YOUR MICROPHONE ON, AND WHEN YOU'RE DONE TURN IT OFF TO AVOID INTERFERENCE, AND THEN ALSO TURN YOUR NAME CARD UP WHEN YOU'D LIKE TO SPEAK. WITH THAT I'LL TURN IT OVER TO ADAM WHO WILL BE MODERATING THE NEXT PANEL.

>> THANK YOU. FIRST OF ALL, I'D LIKE TO START OFF DESCRIBING YOUR CURRENT USES OF NATURAL GAS INDICES INCLUDING FINANCIAL HEDGING OR OTHER DERIVATIVES, AND GO FROM THERE. MAYBE WE'LL START AROUND THE TABLE WITH DONNIE AND WORK OUR WAY HANDER.

>> THANKS. WITH APGA, AMERICAN PUBLIC GAS ASSOCIATION, THE TRADE ASSOCIATION FOR NEARLY A THOUSAND LOCAL GOVERNMENT OWNED GAS DISTRIBUTORS ACROSS THE COUNTRY, MOST OF THESE ARE SMALL PURCHASERS OF GAS, WE'RE NOT NEXTLY LARGE SYSTEMS. BUT THE MAJORITY OF THE MEMBERS, MOST DO PUBLISH, BUY GAS OR THE INDEX. IN HUNTSVILLE WE BY A THIRD OF OUR SUPPLY OFF THE FIRST OF THE MONTH INDEX YEAR ROUND. SO I'M GLAD YOU'RE LOOKING INTO THIS. WE HAVE A VESTED INTEREST, NOT JUST APGA, TO MAKE SURE THEY ARE CORRECT BECAUSE WE RELY ON IT AND LOOK AT THE COMMODITY COSTS. THEY USUALLY REPRESENT ROUGHLY 60% OF OUR EXPENSES FOR OUR GAS SYSTEM FOR THE YEAR, SO IT IS SUBSTANTIAL SO WE WANT TO MAKE SURE THEY ARE CORRECT. WHEN WE GET FURTHER IN APGA MEMBERS ARE FAR FLUNG, ALL OVER THE UNITED STATES, SUBJECT TO A LOT OF PIPELINES AND DIFFERENT INDEXES, NONSOLAR PRIMARILY IN THE SOUTHEAST PART OF THE SYSTEM. WHAT I'VE OBSERVED JUST  WE DESCRIBE TO ICE. MY TRANSACTIONS FOR HUNTSVILLE, LOOK AT ICE TO SEE WHERE IT'S TRANSACTING, DO I WANT TO PAUL BP OR SHELL AND BUY GAS. I CAN'T SAY THEY ARE LESS LIQUID BUT IT SEEMS TO BE LESS TRANSACTIONS, NOT AS FAST MOVING AS IT ONCE WAS, LEADING ME TO BELIEVE THERE'S LESS ACTIVITY, MAYBE BEING REPORTED. WE DO DO A LOT OF TRANSACTION IN THE DAILY MARKET BASED ON GAS DAILY DIFFERENT PIPELINES SO WE WOULD LIKE FOR ALL THIS TO BE FIXED, IF IT'S OUT OF LINE, BUT I'M REALLY JUST TRYING TO COMMUNICATE TO YOU AS THE END USER AND REPRESENTATIVE OF OTHER END USERS, WE DO RELY ON THE INDEXES TO BE RIGHT. WE DON'T WANT A SMALL NUMBER OF PEOPLE HAVING TOO MUCH WEIGHT IN WHAT THEY ARE. IT'S FOR ALL OUR ADVANTAGE TO BE MORE OUT THERE AND BE AVAILABLE WHERE EVERYONE CAN SEE THEM, CORRECT AND COMPLETE CONFIDENCE IN THEM.

>> AS A FOLLOWON QUESTION TO ALSO BE ANSWERED BY THE REST OF THE PANELISTS, DO YOU ACTUALLY HAVE CONFIDENCE THAT THE INDICES THAT YOU'RE USING REFLECT THE LOCATIONAL VALUE OF NATURAL GAS?

>> LIKE ORLANDO SAID, WHEN WE SEEING VOLUME WE'RE SEEING, IT DOES CAUSE CONCERN. NOT THAT WE KNOW THERE'S ANY MANIPULATION AT ALL, BUT THERE'S  IT MAKES YOU WONDER ABOUT THE TRANSPARENCY. AND WE ARE BASING A SIGNIFICANT PORTION OF OUR COMMODITY COSTS ON IT, YOU KNOW, WE WANT TO HAVE CONFIDENCE THAT IT'S CORRECT, THERE'S ENOUGH REPORTING THAT IT'S NOT BEING SLANTED IN ONE DIRECTION OR ANOTHER, THAT IT COULD COST OUR  WE'RE A NONPROFIT SYSTEM. WE DON'T WANT IT TO COST OUR PEOPLE MORE MONEY. AT THE END OF THE DAY, THAT'S WHERE IT'S ALL ABOUT, TO ME.

>> THANK YOU.

>> SO I THINK TO ANSWER OUR QUESTION, WHAT DO WE USE SYNDROME SEES FOR, 2.2 APPROXIMATE TO 2.4 A DAY, WE'RE IN THE PROCESS OF COMMISSIONING OUR FOURTH TRAIN LIKELY PUTTING OUR VALUES PROBABLY CLOSE TO OVER 3 BCF, DEPENDING ON SEASONAL TEMPERATURES, THAT'S PER DAY. SO WE USE INDICES FOR A PART OF OUR BUSINESS BUT BUY GAS ON A MULTITUDE OF INDEXES, WE DO A LOT OF PHYSICAL BASIS, DESCRIBED EARLIER, BUT WE DO BUY GAS OFF THE VARIOUS INDICES. BECAUSE OF THE NUMBER OF COUNTERPARTIES WE TRY TO MEET THE WAY THEY PREFER TO SELL THEIR MOLECULES. WE DO HAVE CONFIDENCE AS WE WORKED WITH MANY OF YOU SITTING AROUND THE TABLE, WE HAVE EVERY INTENTION OF PRICE REPORTING. WE DO NOT TODAY, BUT BY THE END OF THE YEAR I HAVE EVERY CONFIDENCE WE WILL BE A PRICE REPORTER. SO WHEN IT COMES BACK TO THE PANEL YOU HAD BEFORE ABOUT TRANSPARENCY, EVERYTHING THAT WE DO IS FAIRLY TRANSPARENT. YOU CAN GO TO CHENIERE.COM. WE'VE GOT WELL OVER 200 PAGES OF ANALYST PRESENTATIONS THAT TALK ABOUT VARIOUS ASPECTS OF OUR BUSINESS. PRICE REPORTING IS ONE OF THOSE THINGS THAT TO ME WITH THIS SIDE OF THE BUSINESS IN THE UNITED STATES, WE FEEL PRETTY STRONGLY THAT WE WANT TO BE AS TRANSPARENT AS WE ARE WITH THE REST OF OUR BUSINESS. SO WE DO HAVE CONFIDENCE IN THEM. THERE ARE PLACES THAT I WOULD SAY THAT WHEN I GET INSIDE FERC OR NGI EVERY MONTH, I GO DOWN AND LOOK AT THE NUMBER OF TRADES THAT SOME SOME OF THESE INDEXES. PART OF THE REASON WHY WE FEEL WE SHOULD REPORT IS BECAUSE WHERE WE DO A MAJORITY OF OUR ACTIVITY, WHICH IS IN THE MIDCONTINENT AREA AND GULF COAST AREAS OF THE UNITED STATES, SOME OF THE INDICES ARE LACKING, JUST IN TERMS OF ABSOLUTE VOLUME. BUT LIKE I SAID, WE BUY OFF OF A MULTITUDE OF DIFFERENT INDICES BECAUSE WE HAVE TO CAN OUR CUSTOMER BASE, BUT THEY ARE VERY IMPORTANT TO US. SO I WOULD SAY THANK YOU FOR HAVING ME HERE, AS WELL AS WE DO APPRECIATE THE FERC SUPPORT IN LOOKING INTO THIS BECAUSE I DO THINK THIS IS ONE OF THE THINGS THAT WILL BE A BIG ISSUE FOR OUR INDUSTRY ON A GOFORWARD BASIS, FOR MANY OF THE REASONS THAT WERE TALKED ABOUT THIS MORNING.

>> I'D LIKE TO START BY SAYING THANK YOU, GREAT TO BE HERE, CLEARLY A SUBJECT WHICH IS VERY IMPORTANT AND GREAT TO HAVE THE CHANCE TO SPEND SO MUCH TIME CANVASSING SOME OF YOU ACROSS THE INDUSTRY MAKING SURE WE HAVE A CHANCE TO TALK THROUGH OUR PROCESSES AND APPROACH AND VIEWS, SO THANK YOU FOR THAT. YOU ASKED HOW DO WE TRADE GAS, I'M REPRESENTING NGSA, I WOULDN'T THOUGHT THERE WAS A SINGLE PHYSICAL INDEX BASIS EXPRESSED FOR FIXED PRICE ACROSS THE MEMBERS OF THE NGSA FOR OBVIOUS REASONS. WE'RE A LARGE ORGANIZATION THAT TRADES IN MANY WAYS, EACH INDIVIDUAL ENTITY WILL HAVE A DIFFERENT APPROACH BASED ON ITS OWN APPROACH BUT WE HAVE EVERY BASE COVERED ACROSS THE SPECTRUM. THIS IS REALLY IMPORTANT THOUGH. I'D JUST LIKE TO CHARACTERIZE A LITTLE BIT OF WHY IT'S IMPORTANT TO US. IF YOU LOOK AT THE NGSA MEMBERS, I HAVE NO IDEA WHAT THE NUMBER IS BUT AS I SAID IN THE PAST DECADE OR SO WE'VE INVESTED MULTIPLE HUNDREDS OF BILLIONS OF NATURAL GAS INDUSTRY, AND THE WAY IN WHICH THIS MARKET FUNCTIONS TO PRICE THAT GAS IS CRITICAL TO US, AND WE'RE VERY KEEN TO MAKE SURE THAT THIS IS A ROBUST MARKET, AND THAT THE INVESTMENTS WE'VE MADE ARE DONE ON A SOUND MARKET BASIS AND INVESTMENTS WE CONTINUE TO MAKE ARE AS WELL. THANK YOU VERY MUCH FOR HAVING US. IT'S GREAT TO COME HERE AND TALK ABOUT THESE THINGS, WHICH ARE PRETTY CRITICAL TO US. DIRECT ANSWER TO YOUR QUESTION DO WE HAVE CONFIDENCE THE INDICES, YES, WE DO. NOT ONLY IN THE SENSE THEY ARE A TRUE REFLECTION OF WILLING BUYERS AND WILLING SELLERS TRANSACTING GAS AT A PARTICULAR POINT, A PARTICULAR POINT IN TIME, BUT WE ALSO HAVE CONFIDENCE IN HOW THOSE INDICES ARE SET AND MECHANISMS. WE LIKE THE VOLUNTARY NATURE. WE LIKE THE FACT THAT YOU ALLOW INDIVIDUALS TO ASSESS THE MARKET FUNDAMENTAL, AND LOOK AT THAT DATA SET AND DECIDE HOW THEY WANT TO ACT. IF I TAKE A CHANCE JUST TO CHARACTERIZE PERHAPS THE U.S. GAS MARKET, AROUND THE WORLD, YOU REALLY DON'T KNOW HOW LUCKY YOU ARE. SOME OF THE PROBLEMS YOU'VE BEEN TALKING AROUND ABOUT INDIVIDUAL LIQUIDITY ISSUES FOR CERTAIN PERIODS OF TIME, CERTAIN INDICES, YES, THEY ARE IMPORTANT, BUT IF YOU CHARACTERIZE THAT AND COMPARE IT TO SOMEONE LIKE EUROPE, EUROPE IS A VERY SIGNIFICANT GAS MARKET, YOU HAVE A FRACTION OF THE NUMBER OF INDICES THAT HAVE YOU IN THE U.S., NOT AS LIQUID AS THEY ARE IN THE U.S. AND TAKE A LONG TIME TO FORM LIQUIDITY. THIS IS AN AMAZING U.S. GAS INDUSTRY THAT YOU'VE DEVELOPED HERE WHICH HAS GOT MASSIVE DEBT, ENORMOUS AMOUNT OF PEOPLE TRANSACTING GAS HERE, AND WE CERTAINLY HAVE CONFIDENCE IN THE INDICES THAT ARE PRODUCED.

>> GREGG BRADLEY, MARKET MONITORING FROM ISO NEW ENGLAND. FIRST OFF, I WANT TO GIVE EVERYBODY BACKGROUND ON NEW ENGLAND. NEW ENGLAND RUNS THE ENERGY MARKET FOR  1.4 BILLION, 98% OF ELECTRICITY BROUGHT AND SOLD IS IN OUR DAY AHEAD MARKET, WHERE OUR MONEY AND CONCERN IS. ROUGHLY 50% OF OUR ENERGY IS ACTUALLY PRODUCED BY NATURAL GAS, SO WE HAVE A LARGE INTEREST IN WHAT THE PRICE OF GAS IS EVERY DAY. AND SO IT'S A PRIMARY DRIVER IN THE PRICE OF ELECTRICITY IN NEW ENGLAND. SO WHAT DO I DO AND WHAT DO I DO WITH THE INDICES? I'M IN MARKET MONITORING, FIRST OFF WE DO NOT BUY OR SELL NATURAL GAS, WE ALSO HAVE NO REPORTING RESPONSIBILITIES TO ICE, ARGUS OR PLATTS OR ANYBODY ELSE. HOWEVER WE'RE A USER OF DATA. WE PURCHASE DATA FROM ICE AND ARGUS FOR USE IN OUR REFERENCE LEVELS. REFERENCE LEVELS ARE USED IN MARKET POWER MITIGATION IN THE EMERGENCY MARKET, AND THAT'S TO PROTECT AGAINST SELLER SIDE MARKET POWER. SO SELLER SIDE MARKET POWER IS WHEN A GENERATOR HAS MARKET POWER, AND HAS THEIR OWN INCENTIVE TO RAISE THE PRICE IN THE MARKET ABOVE COMPETITIVE LEVELS. SO WE NEED TO CREATE A REFERENCE LEVEL TO FIGURE OUT WHAT A COMPETITIVE OFFER SHOULD BE FOR THAT GENERATOR EVERY DAY. TO DO THAT WE NEED TO KNOW A LOT OF INFORMATION, SOME OF WHICH WE GET DIRECTLY FROM THE GENERATOR, WE NEED TO KNOW ALL THE PHYSICAL AND FINANCIAL PARAMETERS OF EVERY GENERATOR IN NEW ENGLAND. BUT WHAT WE DON'T KNOW EVERY DAY IS THE FUEL PRICE THAT THEY ARE PAYING. SO THAT'S WHY WE PURCHASED DATA FROM ICE AND FROM ARGUS TO CREATE A BENCHMARK FUEL PRICE, TO USE FOR EVERY GENERATOR ON THE APPLICABLE PIPELINE IN NEW ENGLAND TO CALCULATE AN ESTIMATE OF WHAT A COMPETITIVE OFFER SHOULD BE FOR EVERY GENERATOR. AND WHETHER WE THINK THE INDEX IS ROBUST AND LIQUID AND CAPTURES THE CORRECT LOCATIONAL VALUE, I WOULD SAY THAT ON MOST DAYS, WE HAVE NO PROBLEM WITH THE INDEX. THERE ARE A FEW DAYS DURING THE YEAR WHERE WE LACK CONFIDENCE IN WHAT WE'RE SEEING, BUT WE CAN TALK ABOUT THAT A LITTLE BIT LATER.

>> GOOD AFTERNOON, SUSAN BERGEL, AMERICAN GAS ASSOCIATION. THANK YOU FOR THE OPPORTUNITY TO PARTICIPATE TODAY. AGA REPRESENTS MORE THAN 200 NATURAL GAS LOCAL DISTRIBUTION COMPANIES, STATE REGULATED OR MUNICIPAL UTILITIES. AGA MEMBERS SUPPORT PRINCIPLES OF INTEGRITY, LIQUIDITY AND TRANSPARENCY, NATURAL PRICE INDICES. WE BELIEVE RELIABLE INDICES ARE CRITICAL TO A WELL FUNCTIONING COMPETITIVE NATURAL GAS MARKETPLACE, UNDERSTANDABLY TODAY I'M NOT REPRESENTING SPECIFIC INPUT FROM ANY SPECIFIC MEMBER COMPANY BUT JUST BASICALLY PROVIDING A GENERAL OVERVIEW BASED ON MEMBER FEEDBACK. YOU HAVE A GOOD UNDERSTANDING HOW WE USE THEM ALREADY, INDEX PRICE TRANSACTIONS FOR COMMERCIAL TRANSACTION TO PURCHASE GAS, RELATED TO PHYSICAL SUPPLIES AND ALSO REFERENCED IN PHYSICAL HEDGING TRANSACTIONS, INDICES NOW REFERENCED IN STATEAPPROVED LDC TARIFFS PRIMARILY WITH PROVISIONS RELATESED TO IMBALANCES, THEY ALSO MAY BE IN OTHER LDC TARIFF PROVISIONS COVERING SITUATIONS SUCH AS PAYMENT OF GAS OR FAILURE TO MAKE WITHDRAW FROM A STORAGE LDC STORAGE FACILITY UNDER TERMS OF LDCAPPROVED TARIFF. AS YOU NOTED IN THE INTRO TO THIS PANEL, STATE REGULATORY COMMISSIONS ALSO USE INDICES AS BENCHMARKS IN REVIEWS OF LDC NATURAL GAS PURCHASES. WITH RESPECT TO CONFIDENCE AND LIQUIDITY CONCERNS, THE GENERAL FEEDBACK FROM AGA MEMBERS IS THEY ARE NOT EXPRESSING ANY SIGNIFICANT CONCERNS WITH RESPECT TO A LOSS OF CONFIDENCE OR NATURAL GAS INDICES DON'T SUFFICIENTLY REFLECT THE LOCATIONAL VALUE OF NATURAL GAS AT MOST POINTS TO PERMIT DECISION MAKING. THAT'S THE GENERAL FEEDBACK WE'VE RECEIVED FROM MEMBERS.

>> GEORGE WAYNE, KINDER MORGAN IN THE WEST REGION PIPELINE GROUP. AND WE START BY IN GENERAL KMI OVERALL WE OPERATE 70,000 MILES OF NATURAL GAS PIPELINE CONNECTED TO EVERY GROWING NATURAL RESOURCE PLAY IN THE UNITED STATES. KINDER MORGAN, FERC JURISDICTIONAL PIPES BUY AND SELL SIGNIFICANT QUANTITIES OF NATURAL GAS ON A DAY TO DAY BASIS. KINDER MORGAN INTERSTATES AND INTRASTATES PIPELINE STORAGE FACILITIES RELY ON FEW REMAINING PUBLISHERS OF PRICE INDICES INCLUDING PLATTS, AND TRADING DATA FROM ICE TO PRICE NATURAL GAS TRANSPORTATION AND OTHER TRANSACTIONS WITH COMMODITY PURCHASE AND SALES TRANSACTIONS. PUBLISHED PRICE INDICES REALLY ARE EMBEDDED IN ALL THE KINDER MORGAN INTERSTATE PIPELINE AND FERC GAS TARIFFS. JUST AS FOR AN EXAMPLE, WHEN I LOOK AT OUR 21 TOTAL PIPELINE AND STORAGE ASSETS FERC JURISDICTIONAL, I JUST CARVE OUT THE WEST REGION, ROUGHLY TEN FERC JURISDICTIONAL PIPES IN THE WEST REGION, MAKING THE CHANGE JUST FROM PRICE DEVELOPER TO ANOTHER PRICE DEVELOPER WE HAVE  IT RIPPLES THROUGH THE ORGANIZATION. WE HAVE THIS LAST EFFORT GOING FROM CHANGING OUR TARIFFS, OUR CAPACITY RELEASE INDICES, OIL REFERENCES, IT'S QUITE AN EFFORT. FOR INSTANCE, JUST IN THE WEST REGION OLBA REFERENCES, WE REFERENCE PRICE INDICES 144 PLACES. WE HAVE TEN TARIFFS WE HAVE TO REFILE AND SOME ARE IMMEDIATELY REFILING, WHEN PRICES  WHEN WE CHANGE PRICE INDICES. THE SAME THING WITH REGARDS TO CAPACITY RELEASE TRANSACTIONS. WITH REGARDS TO SUPPLY INDICES, NASB REQUIREMENTS, TWO REFERENCES IN OUR GAS TARIFFS, SO ANYBODY WE MAKE A CHANGE WE HAVE TO BE IN KEEPING WITH THE NASB STANDARD. OBAs IN GENERAL DON'T HAVE LANGUAGE THAT NECESSARILY SAYS WHAT TO DO WHEN A PARTICULAR PRICE INDEX DOESN'T BECOME AVAILABLE, WE HAVE TO USE OUR OWN DISCRETION. IN GENERAL WITH REGARDS TO THIS PARTICULAR CONSOLIDATION OR INTEGRATION OF THIS PLATTS AGREEMENT, WITH ICE, WE FEEL WHERE WE REALLY LAND IS WE REALLY FEEL IT REDUCES COMPETITION IN THE MARKET FOR PUBLISHED PRICE INDICES AND ELIMINATES CHOICES AVAILABLE TO MARKET PARTICIPANTS FOR RELIABLE AND TRANSPARENT PRICING IN THE WHOLESALE NATURAL GAS MARKETS. KINDER MORGAN SUBMITS IN ORDER TO PRESERVE TRANSPARENCY, TRANSPARENCY LEADS TO LIQUIDITY WHICH LEADS TO PRICE FORMATION, THAT IS CURRENTLY AVAILABLE IN GAS PARTICIPANTS, OUR FEELING IS ICE SHOULD CONTINUE TO MAKE ICE TRADING DATA AVAILABLE AND AS AN ENTITY INDEPENDENTLY PUBLISH PRICE INDEX ON THE SAME BASIS AVAILABLE PRIOR TO THE PLATTS PRICE AGREEMENT. I ALSO  THIS IS GRANULAR, DEVELOPING PRICES MAKING RAW DATA PRICES AVAILABLE, GETTING OUT OF PRICE DEVELOPMENT BUSINESS THAT'S DIFFERENT THAN ALLOWING FOR ACCESS TO RAW DATA.

>> THANK YOU FOR HAVING ME. I COME FROM THE CALIFORNIA ISO, INDEPENDENT ELECTRIC OPERATOR, ALSO FOR EXPANDED AREA OF THE WESTERN STATES OF THE UNITED STATES, UNDER THE UMBRELLA OF THE (INDISCERNIBLE) MARKET. WE'RE NOT IN THE GAS BUSINESS. WE DON'T TRADE ANY GAS. WE DON'T HAVE ANY OF THE REQUIREMENTS. WE'RE END USERS OF THE GAS. YOU CAN POST INDICES BUT IT'S FOR PURPOSE OF TRANSPARENCY IN THE MARKETS. HOW DO WE USE THE INDICES IN OUR MARKETS? WE HAVE AN ENERGY MARKET. WE HAVE A DAY AHEAD MARKET, ONE DAY IN ADVANCE. WE HAVE MARKETS, REAL TIME THAT RUNS EVERY 16 MINUTES AND EVERY 5 MINUTES, AND THE OBJECTIVE IS TO REVISE OVERALL COST. OBVIOUSLY WE HAVE FIRST SET OF GAS UNITS, AND FOR THOSE WE NEED TO ESTIMATE TWO PARTS. THE FIRST IS WE HAVE TO DETERMINE THE REFERENCE LEVEL THAT SYSTEM WE CALL IT DEFAULT ENERGY BID. AND THESE ARE BIDS THAT ARE USED FOR MARKET POWER MITIGATION SO WHEN WE TRIGGER MARKET POWER MITIGATION THESE ARE USED AS REFERENCE TO MITIGATE THE RESOURCES. THE SECOND PART THAT WE USE THE INDICES FOR IS THE CAP WE IMPOSE ON THE STARTUP COST AND MINIMUM LOAD COST, BASICALLY THE COSTS. PARTICIPANTS CAN GO IN TWO WAYS, PARTICIPATION OF MARKET IN TERMS OF COSTS, PUT AN APPROXIMATE AND WE CAP THAT UP TO 125% OF THAT APPROXIMATE COST. IF THEY OPT FOR THE RAISE OF COST OPTION THEY CAN GO UP TO 150% OF THAT COST, FOR THAT WE USE THE MONTHLY FEATURE PRICES. FOR THE PROXY COST OPTION WE USE NEXT DAY GAS INDICES. FOR THE SAKE OF MAKING THIS STABLE AND ROBUST IN THE MARKET, WE ACTUALLY USE INDICES FROM FOUR DIFFERENT VENDORS. ICE, PLATTS, NGI AND SNL. WE GET THIS BLENDED INDEX. WE BELIEVE THE INDEX ARE ROBUST, COMPLICATIONS WE MAY FROM TIME TO TIME DO WITH THE TIMING OF INDICES BECAUSE OBVIOUSLY WE HAVE TO USE THIS PUBLISHED INDEX, AND GIVEN THE TIMING OF PUBLICATION AND TIMING OF RUNNING, WE HAVE THE POTENTIAL CONFLICTS. IN TERMS OF HOW EFFECTIVE THEY ARE TO REFLECT LOCATIONAL VALUE, WELL, THESE ARE COMMODITY PRICES, WHAT WE USE IN OUR SYSTEMS ARE ACTUALLY MORE (INDISCERNIBLE) PRICES, SO ONCE WE TAKE THE COMMODITY PRICES, GAS INDICES, WE HAVE THE TRANSPORTATION COST AND THAT WILL BE MORE LOCATIONAL BASED TO IDENTIFY SPECIFICALLY WHAT FUEL REGION PRICES SHOULD APPLY TO CORRESPONDING RESOURCES. WHY IT'S IMPORTANT FOR US TO HAVE ROBUST AND EFFECTIVE GAS INDICES? WELL, AT THE END OF THE DAY THESE ARE INPUTS TO DETERMINE OVERALL COST OF SYSTEM. BASED ON THAT WE MAKE THE DETERMINATION OF WHAT IS OPTIMUM DISPATCH. AND BASED ON THAT OPTIMUM DISPATCHED, THEY WILL BE DISPATCHED ACCORDINGLY, THAT'S GOING TO CONSEQUENTLY LEAD TO HOW MUCH GAS THEY BURN. SO IF YOU HAVE A REFLECTIVE GAS INDEX OF THE COST OF THE SUPPLIER, YOU CAN EXPECT THE DISPATCH WE'RE GOING TO HAVE IN THE SYSTEM WILL BE REFLECTIVE OR ALIGN WITH THE GAS PRICE IN THE SYSTEM. WE'RE ACTUALLY ADDING MORE FLEXIBILITY FOR RESOURCES. WE'RE GOING TO GO TO THE EXTENT WHERE THEY CAN MORE DYNAMICALLY DEFINE WHAT FUEL REGIONS THEY SHOULD USE. WE COLLECT AND USE (INDISCERNIBLE) IN THE WESTERN OF THE U.S. AND THESE ARE ALWAYS OUR REFERENCE PRICES. AS NOTED EARLIER WE ARE TRANSPORTATION CALL TO MAKE SURE COSTS ASSOCIATED WITH DELIVERING GAS IS CAPTURED IN OUR MARKET.

>> HI, I'M LEE BENNETT. I'M REPRESENTING INGA TODAY. INTERSTATE NATURAL GAS PIPELINES UTILIZE THESE INDEXES, IN A NUMBER OF WAYS. WE USE THEM AS WAS POINTED OUT EARLIER IN BALANCE CASHOUTS, WE'LL USE IT FOR PENALTY PROVISIONS. WE USE IT IN PAL LANGUAGE, MARKING AND LENDING. IN ADDITION, WE HAVE THE ABILITY TO UTILIZE PRICING OUR SERVICES TO DETERMINE WHAT THE VALUE WOULD BE ON ANY GIVEN DAY. THAT SAID, WE DID HAVE ALTERNATIVES AND MANY PIPELINES CHOOSE TO JUST FOLLOW ICE ON THE DAY TO GET MORE REALTIME PRICING VERSUS RELYING ON AN AFTEREFFECT NUMBER. AND THEN SO THAT'S THE MAIN USES FOR THE INDICES, FOR THE PIPELINES. OUTSIDE OF THAT, YOU HAD ASKED ABOUT WHETHER THE PIPELINES HAVE A CONFIDENCE IN THE INDICES. AND I WOULD SAY GENERALLY YES. AND BEING AN OPERATOR OF A PIPELINE, WE CAN TELL WHEN THE MARKET GETS OUT OF WHACK, AND SO IF A PRICE IS NOT BEING REFLECTED CORRECTLY IN AN INDEX AT A POINT WE'LL SEE IT BECAUSE WHAT WILL END UP HAPPENING IS THE MARKET PARTICIPANTS WILL RECOGNIZE IT, AND THEY WILL EITHER LEAVE MORE GAS ON OUR PIPE OR THEY WILL SHORT US GAS. BECAUSE THEY KNOW THAT THEY WILL EITHER BE ABLE TO REPLACE THAT GAS AT A LOWER COST THAN WHAT WE'RE GOING TO PAY THEM FOR IT, OR THAT WE'LL END UP PAYING THEM MORE THAN THEY ARE GOING TO BE ABLE TO SELL IT FOR. SO WE SEE IT HAPPENING WITH OUR IMBALANCES, IF SOMETHING DOES GET OUT OF WHACK. ANOTHER EXAMPLE, NOT DEALING WITH INDEXES, BUT WE SEE IT WHEN THE PRICE OF ETHANE CHANGES AND WHEN ETHANE LOSES ITS VALUE BECAUSE WE'LL END UP SEEING A MUCH RICHER STREAM OF GAS ON OUR PIPE, BECAUSE THE MARKET'S GOING TO GO WHERE IT'S GOING TO MAKE THE MOST MONEY. AND SO IN THE CASE OF THE ETHANE, WHEN SELLING OF THE ETHANE ALONE ISN'T THE BEST MARKET, IT GETS REINJECTED INTO THE PIPES. SO WITH THAT, WE WOULD KNOW IF SOMETHING WAS OUT OF WHACK AND WE'RE NOT SEEING IT. SO WE HAVE CONFIDENCE, CONFIDENCE USING THESE INDEXES FOR THE PURPOSES DISCUSSED.

>> AS A MARKET MONITORING UNIT, I GUESS I'LL SPEAK MOSTLY FROM THE STANDPOINT OF THE NEW YORK ISO BECAUSE I THINK IN TERMS OF THE DIFFERENT MARKETS WE MONITOR, NEW YORK HAS THE MOST CHALLENGING SITUATION WHEN IT COMES TO EFFECT OF NATURAL GAS MARKET CONDITIONS ON THE ELECTRIC USE AND HOW THE ELECTRIC MARKET IS IN TERMS OF CONGESTION PATTERNS AND INCENTIVES TO INVEST AND THINGS LIKE THAT IS AFFECTED BY THE GAS MARKET. IT'S USUALLY THE CASE IN THESE MARKETS OTHER ISOs WILL FIND SIMILAR CHALLENGES IN FUTURE YEARS BUT THERE'S ALWAYS ONE ISO THAT'S A FIRST, AND SO NEW YORK IS AMONG, YOU KNOW, THE FIRST OF THE ISOs TO SORT OF RUN INTO CHALLENGES ASSOCIATED WITH THE GAS MARKET. SO NEW YORK USES 44% OF ITS GENERATION CAME FROM NATURAL GAS LAST YEAR, BUT IT ACTUALLY PLAYS A MUCH BIGGER ROLE IN TERMS OF PRICE FORMATION IN THE ELECTRICITY MARKET, 68% OF THE TIME  68% OF THE TIME INTERVALS IN THE MARKET HAVE COMBINED CYCLE UNIT ON THE MARGIN, GAS FIRED UNIT. IF YOU USE OTHER GAS FIRED RESOURCES IT'S 80% SO NATURAL GAS HAS A TREMENDOUS IMPACT ON PRICE FORMATION. BECAUSE WE'RE IN NEW YORK, SITUATED RELATIVE TO SHALE GAS AND RELATIVE TO PLACES WHERE THEY DON'T BUILD PIPELINES LATELY, YOU KNOW, NEW YORK HAS, YOU KNOW, I THINK IN THE FIRST QUARTER THIS YEAR THE PRICE IN ONE PART OF THE STATE FOR NATURAL GAS WAS MORE THAN TWICE THE PRICE IN ANOTHER STATE. MOST OF THE CONGESTION PATTERNS WE SEE ARE DRIVEN BY CONGESTION ON THE PIPELINE SYSTEM. ALSO JUST TO UNDERSTAND WHAT'S HAPPENING IN THE ELECTRIC MARKET, YOU HAVE TO UNDERSTAND SOMETHING ABOUT THE GAS MARKET, AND TO UNDERSTAND WHERE THEY ARE INCENTIVES TO BUILD AND MAINTAIN OTHER NEW AND EXISTING UNITS, AL THOSE THINGS ARE VERY MUCH DRIVEN BY WHAT PEOPLE'S OUTLOOK FOR THE NATURAL GAS MARKET AND HOW IT'S GOING TO AFFECT PROFITABILITY OF THEIR ASSETS. I COUNTED NINE DIFFERENT INDICES WE WOULD USE SORT OF ON AN ORDINARY BASIS TO SET REFERENCE LEVELS FOR GENERATORS IN NEW YORK, SO THERE'S A LOT OF ANALYSIS THAT HAS TO GO INTO FIGURING OUT WHAT'S A GOOD INDEX OR COMBINATION OF INDICES, IF WE WANT TO UNDERSTAND WHAT'S DRIVING THE COST OF A PARTICULAR GENERATOR. NOW, WHERE THAT BECOMES IMPORTANT IS IN A COUPLE OF WAYS. FIRST, I'LL JUST SAY THAT THERE ARE MARKET POWER MITIGATION MEASURES BOTH IN THE ENERGY MARKET AND IN THE CAPACITY MARKET. IN THE ENERGY MARKET, LIKE THE OTHER GENTLEMAN FROM THE ISO IS HERE, WE HAVE A SYSTEM OF OFFER CAPPING GENERATORS WHEN WE THINK THERE'S SOME  BASED ON A SET OF PROGRAMMATIC THRESHOLDS THAT ARE DESIGNED TO IDENTIFY SITUATIONS WHERE GENERATOR HAS LOCAL MARKET POWER, OR MARKET POWER MORE GENERALLY. IT'S FOR THE MOST PART I DON'T THINK GENERATORS HAVE INCENTIVES TO NOT ACT COMPETITIVELY BUT TO THE EXTENT WHERE GENERATORS DO HAVE MARKET POWER, THE IDEA IS THAT THIS OFFER CAPPING SCHEME WOULD LIMIT THEIR ABILITY TO RAISE EITHER PRICES IN THE CLEARING PRICES IN THE ELECTRIC MARKET, OR LIMIT THE ABILITY TO GET OUT OF MARKET PAYMENTS FOR CERTAIN LOCAL RELIABILITY SERVICES. SO I THINK, YOU KNOW, FOR THE MOST PART, THE MARKET IS I GUESS I'LL SAY  THE UNITS THAT HAVE LOCAL MARKET POWER THEY ARE IN A SITUATION WHERE THEY WILL, YOU KNOW, OFFER WHATEVER THEY ARE ALLOWED TO, RIGHT? SO A DOLLAR INCREASE IN THE GAS PRICE WOULD BE A DOLLAR INCREASE IN WHAT THEY ARE PUTTING IN THEIR POCKET IN TERMS OF ESTIMATE FOR THEIR COST. ANOTHER SITUATIONE GENERATORS MAY RARELY HAVE MARKET POWER, RARELY HAVE INCENTIVE TO OFFER ABOVE MARGINAL COST. EVEN IF WE HAVE AN OFFER CAP FOR A GENERATOR WITH TRANSIENT MARKET POWER THEY STILL FACE COMPETITION FROM OTHER GENERATORS, IMPORTS FROM OTHER MARKETS. YOU KNOW, OFTENTIMES IF ONE INDEX IS NOT RELIABLE, THEY ARE STILL COMPETING AGAINST GENERATORS IN THEIR MARKET, WHO ARE TAKING GAS OFF OF PLACES WITH OTHER INDICES, EITHER GENERATORS IN NEW YORK OR MIGHT BE IMPORTS FROM NEW ENGLAND, IMPORTS FROM NEW JERSEY AND PENNSYLVANIA. SO THERE'S A LOT ABOUT THE MARKET THAT SORT OF AUGMENTS THE USE OF MITIGATION FOR OFFER CAPPING, SO IT MAKES I THINK IN MANY WAYS THIS PROCESS IS NOT AS VULNERABLE TO BIASED INDICES AS YOU MIGHT BE CONCERNED ABOUT. IN OTHER CASE WHERE IS YOU LITERALLY ONLY HAVE ONE SUPPLIER AND YOU'RE IN A SITUATION WHERE IT'S LIKE TRENCH WARFARE, WHERE IF YOU'RE DISCUSSING  WHAT'S THE APPROPRIATE NUMBER TO USE, THEY HAVE AN INCENTIVE TO EKE OUT EVERY LAST CENT. SO THAT'S A SITUATION WHERE A LOT OF SCRUTINY HAS TO GO INTO THOSE NUMBERS, TO SOME EXTENT BASED ON INDEX TO LOOK CAREFULLY ABOUT THE BASIS FOR THE INDEX. THERE'S A LOT ABOUT THE COMPETITIVE MARKET THAT MAKES THE PROCESS LESS SUSCEPTIBLE TO BIAS OR MANIPULATION OF INDICES. BUT IT'S STILL SOMETHING WE'RE CONCERNED ABOUT. I'D SAY I THINK YOU ASKED THE QUESTION TO WHAT EXTENT DO WE FEEL LIKE WE CAN RELY ON INDICES, AND I'D SAY I THINK 97% OF THE TIME IT MEETS NEEDS FOR OUR PURPOSES. 3% OF THE TIME NOT AS SURE, BUT, YOU KNOW, FORTUNATELY THAT'S A SMALL PERCENTAGE OF THE TOTAL TIME. WE CAN GET INTO MORE OF THE PARTICULARS LATER IN THE SESSION.

>> DAVID LOUW, MACQUARIE ENERGY. AS A MARKETER THE SHORT ANSWER IS WE USE MOST OF THE INDICES, ULTIMATELY PROVIDE CUSTOMERS ACCESS TO MARKETS IS ONE OF THE KEY THINGS WE DO. IN DOING THAT WE TRY PHYSICAL AND FINANCIAL GAS WITH COUNTERPARTIES, ON THE FINANCIAL SIDE THAT'S OBVIOUSLY MOSTLY OTC SWAPS. WE HEDGE THOSE TRANSACTIONS WITH FINANCIAL FUTURES THAT ARE CLEAR TRANSACTIONS AND PROVIDE RISK MANAGEMENT SERVICES TO CLIENTS. THOSE ARE GOING TO BE A HOST OF DIFFERENT PRODUCTS. BUT ALL OR MANY OF THOSE PRODUCTS WILL RELY ON THESE INDICES. TO ANSWER THE OTHER QUESTION, YES, I THINK WE BROADLY ARE CONFIDENT IN THE INDICES. THERE'S A COUPLE INSTANCES WHERE THERE'S THINGS THAT HAPPEN AT A SPECIFIC LOCATION, ONCE IN A WHILE WE MIGHT SEE SOMETHING WITH A THIN AMOUNT OF TRADES THAT MADE UP A PRICE OR SOMETHING MIGHT LOOK OUT OF WHACK AT A PARTICULAR LOCATION, BUT BROADLY SPEAKING THE INDICES ARE RELIABLE, HISTORICALLY THEY HAVE BEEN TODAY, I THINK THEY ARE STILL, THAT BEING SAID THERE'S DEFINITELY WARNING SIGNS. THE DATA THAT SOME OF YOU SPOKE ABOUT THIS MORNING INDICATES THERE IS A DECREASE IN KIND OF WHAT I REFER TO AS LIQUIDITY, THE GAS MARKET REMAINS STRONG AND WE HAVE TREMENDOUS SUPPLY OF NATURAL GAS ESPECIALLY IN THE U.S. SO WE KNOW THERE'S NOT A SUPPLY PROBLEM. DEMAND IS PROBABLY GOING DOWN BUT IT'S CHANGING AT THE SAME TIME WHICH I THINK IS ONE OF THE OTHER CHALLENGES THAT WE HAVE TO KEEP UP WITH. WE'RE TALKING HERE ABOUT PRICE REPORTING. WHERE THE CURRENT POLICY STATEMENT IS MORE THAN 10 YEARS OLD, AND WAS WRITTEN WHEN THERE WAS A LOT OF UNCERTAINTY AND THERE WAS, YOU KNOW, CLEARLY SOME ISSUES IN THE INDUSTRY, WE'VE MATURED SINCE THEN. SO I KNOW SOME OF THE FOLKS THIS MORNING SAID WE DON'T REALLY NEED TO CHANGE THAT, I WOULD AGREE AS FAR AS THE PRINCIPLES THAT ARE THERE ABOUT HOW WE REPORT THE MECHANICS OF IT. THOSE ARE GOOD PRINCIPLES. WE SHOULD KEEP UP WITH THOSE. WE ALSO NEED TO LOOK AT WHAT HAS CHANGED. NOW WE'VE GONE THROUGH CYCLES OF COAL TO GAS SWITCHING, SEEING MORE RENEWABLES COMING ONLINE. ON MONDAY THE RETAIL MARKET IN MEXICO OPENS ITS PRICE LINE LARGE ON U.S. INDICES. WE'RE GOING TO SEE MORE LNG EXPORTS GOING FORWARD, THINGS THAT WILL BRING MORE BRING OPPORTUNITIES, FRANKLY SPEAKING BRINGING OPPORTUNITIES FOR COMPANIES LIKE OURS AS WELL AND WE NEED TO MAKE SURE WE CREATE THE RIGHT ENVIRONMENT FOR COMPANIES TO EMBRACE THOSE OPPORTUNITIES, AND HELP PROVIDE THE LIQUIDITY WE NEED. I WAS EXCITED TO HEAR COREY SAY THAT CHENIERE IS GOING TO BE PRICE REPORTING. IT'S A GREAT STEP FOR THEM AND FOR THE INDUSTRY AS A WHOLE. THE MORE PRICE REPORTERS, THE MORE TRANSACTIONS MAKE UP THE INDICES.

>> THANK YOU.

>> GO AHEAD, GEORGE.

>> TO CIRCLE BACK AROUND AGAIN, I WASN'T  I WANTED TO MOVE ON A LITTLE BIT, LET THE OTHER SPEAKERS GET THEIR FIRST INTRO IN BUT I WANT TO CIRCLE BACK AROUND WITH KINDER MORGAN USING PRICE INDICES. AGAIN, IT'S PERVASIVE, REALLY THE LIFE BLOOD, IF YOU WILL, OF OUR OPERATION. EVEN THOUGH WE DON'T NECESSARILY TAKE COMMODITY RISK INHERENTLY, INDIRECTLY WE TAKE A LOT OF THAT TYPE OF RISK AND WE RELY ON THOSE INDICES TO HELP US UNDERSTAND REALLY ULTIMATELY AT THE END OF THE DAY HOW TO SELL OUR TRANSPORT. AGAIN, LIKE THE OTHER SPEAKERS MENTIONED, CASHOUTS, DISCOUNTING TRANSPORTS, THAT'S A KEY AREA. WE LOOK AT PRICE INDICES, SPOT AND FORWARD TO HELP SHAPE OUR DISCOUNTING POLICY. OBVIOUSLY WE'RE LOOKING AT THE VALUE OF MARKET AREA, VALUE OF SUPPLY AREA, OBVIOUSLY SPREAD ACROSS OUR PIPES TO TRY TO DETERMINE, UNDERSTAND WHEN POTENTIALLY WHERE WE SHOULD BE DISCOUNTING AND MAYBE WHEN WE TALK ABOUT EXPANSIONS OR BROWN FIELD, GREEN FIELD TYPE PROJECTS, LOOKING TO HELP DEVELOP AND NEGOTIATE RATES TYPE ARRANGEMENT. WE ALSO LIKE THE OTHERS IN BALANCE MANAGEMENT WHERE THERE'S PENALTIES, YOU KNOW, LOOKING AT AUTHORIZED, UNAUTHORIZED OVERRUN PENALTIES AND HOW TO SHAPE REALLY SEND A MARKET SIGNAL TO OUR SHIPPERS TO HOW BASICALLY GET BACK IN BALANCE. ANOTHER ONE THAT'S MAYBE NOT AS OBVIOUS IS CREDIT. WE RELY ON PRICE INDICES TO DETERMINE THRESHOLDS FOR LOAN AGREEMENTS, HOW MUCH ADDITIONAL COLLATERAL OR SUPPORT THEY SHOULD HAVE WHEN THEY TRANSACT WITH US. AND THEN ACCOUNTING, OUR ACCOUNTING, FERC ORDER 581 REQUIRES OUR ACCOUNTING GROUP TO ABIDE BY THOSE PRINCIPLES AND SO WHEN WE MAKE A CHANGE, LOCATIONAL OR ACROSS THE BOARD, WE HAVE TO MAKE SURE OUR SYSTEMS AND ALL THAT ARE  CAPTURE ALL THAT TO MAKE THAT CHANGE REALLY FROM FRONT OFFICE, MIDDLE, TO BACK OFFICE, CAPTURE ALL THOSE THINGS. SO THAT'S AGAIN PERVASIVE. THAT'S HOW WE USE IT ALL OVER. I WANT TO  IT'S IMPORTANT TO REALLY DRAW OUT WHEN WE TALK ABOUT OUR PARTICULAR CONCERNS, AS FAR AS THE PLATTS ICE AGREEMENT ELIMINATING CHOICES, WHERE WE'RE COMING FROM WITH REGARDS TO THAT. I LOOK BACK PROBABLY FIVE YEARS AGO, WHEN WE DECIDED TO MOVE FROM PLATTS TO ICE, AND WE DON'T TAKE THAT LIGHTLY. AND MAKING THE MOVE, AGAIN, AS I TALKED ABOUT ALL THE OBAs, TARIFF REFERENCES, CAPACITY RELEASE REFERENCES, ET CETERA, IT'S A BIG MOVE TO MOVE FROM ONE PRICE DEVELOPER TO ANOTHER. BUT AFTER CANVASSING THE MARKET, TALKING TO OUR CUSTOMERS, WE THOUGHT IT WAS THE MOST PRUDENT BECAUSE WE SAW THE CHANGE IN TECHNOLOGY, WE SAW NEW PRODUCTS BEING DEVELOPED, NOT GETTING TO RENEWABLES, HOURLY PRICES, HOW THAT'S IMPORTANT. WE FEEL LIKE PLATTS  MINE ICE IS A BETTER PLATFORM TO CONSUMMATE WHAT IT MEANS WHEN WE TALK ABOUT SELLING TRANSPORT ON AN HOURLY BASIS. AND THEN OF COURSE THE SHALE REVOLUTION, AND WHAT'S  HOW THAT'S SHAPED MOVEMENT AND CHANGE AND FLOWS IN PIPELINES ACROSS OUR PARTICULAR NETWORK. ALL THAT CAME DOWN TO THE REASON WHY WE AGAIN MADE THAT MOVE WE FELT BECAUSE IT WAS IMMEDIATE, WITH REGARDS TO NOT JUST REAL TIME BUT IF YOU'RE FOLLOWING HOW PRICES ARE TRADED AT THE END OF THE DAY, DURING THE DAY, YOU UNDERSTAND WHERE THEY SETTLE AND WHY THEY SETTLE, AT THE END OF THE DAY. OKAY? SO YOU CAN MAKE THAT CONNECTION. IT'S MORE EASY TO MAKE THE CONNECTION, EASIER TO ADMINISTER TRADES ON ICE, TRANSACTIONS ON ICE, IT'S ANONYMOUS, UNFILTERED. AT THE END OF THE DAY IT COMES DOWN TO THINGS, BETTER TRANSPARENCY, WHICH CREATES CONFIDENCE IN THE INDICES, END OF DAY PRICE, LEADING TO GDD AVERAGE PRICE OVER THE MONTH, AND ULTIMATELY BETTER PRICE FORMATION. TO ANSWER THE THIRD QUESTION, HAS TO DEAL WITH LOCATIONAL VALUE, OUR VIEW OF HOW LOCATIONAL VALUE HAS BEEN IMPACTED, HAS IT BEEN COMPROMISED. IN GENERAL LIKE MOST OF THE SPEAKERS HAVE TALKED ABOUT, I DON'T BELIEVE IT HAS BEEN REALLY COMPROMISED. I MEAN, YOU CAN TALK ABOUT  I'LL REFERENCE THIS IS  I THINK IT WOULD BE IMPORTANT TO MAYBE REFERENCE THIS, THIS CAME UP IN THE SEC 1994 WHITE PAPER MARKETS 2000 REPORT, AND THEY DEFINE TRANSPARENCY REFERRING TO THE REALTIME DISSEMINATION OF INFORMATION ABOUT PRICES, VOLUME AND TRADE AND THEY STATE LIQUIDITY IS A FUNCTION OF DIVERSE NUMBER OF BUYERS AND SELLERS, DIVERSE, MEANING THIS IS NOT THE SAME AS A LARGE NUMBER OF  THE LARGE VOLUME FROM TWO OR THREE. IT'S A GOOD NUMBER OF VOLUMES FROM A DIVERSE SET OF PLAYERS THAT REALLY CREATES THAT LIQUIDITY THAT YOU WANT. AND ULTIMATELY THAT PRICE FORMATION. SO AGAIN I WANT TO GET BACK TO ALL OF THAT IN TERMS OF LOCATIONAL VALUE, WHEN YOU LOOK AT THE VALUE OF  THE TRANSPORTATION VALUE OF THE PIPELINE, DEPENDING ON WHERE IT IS IN ITS LIFE CYCLE, INITIALLY WE CONSTRUCT A MAXIMUM COMPENSATORY RATE BUT AS THE MARKETPLACE EVOLVES, TAKE FOR INSTANCE THE ROCKIES, WE HAVE PIPES NOT FULLY LOADED, MEAN THEY ARE NOT FULLY SUBSCRIBED, THEY DON'T FLOW FULL. AND SO WE HAVE OPEN CAPACITY, IN WHICH WE NEED TO LOOK AT THESE PRICES AT A DISCOUNT, OUR PARTICULAR TRANSPORTATION. SO WE LOOK AT THERE'S A FUNDAMENTAL ECONOMIC RULE, THE LAW OF ONE PRICE, OKAY? THE LAW OF ONE PRICE STATES THE DIFFERENCE BETWEEN MARKET AND SUPPLIER COULD BE COST OF TRANSPORTATION, VARIABLES ARE FUEL, COMMODITY, ACA, MAYBE SOME OTHER THINGS. BUT THAT'S THE FLOOR. WE LOOK TO SEE WHERE WE'RE TRADING RELATIVE TO THE FLOOR, AND IF WE'RE ABOVE THE FLOOR, RELATIVE TO WHAT THE SPREAD MAY SAY, MINUS VARIABLES, THAT'S EXTRINSIC VALUE THAT PIPELINE MAY BE ABLE TO OFFER, VARIOUS REASONS, COULD BE BECAUSE HIGH PRESSURE LINE OR COMPRESSED ABILITY TO SELL TO A PARTICULAR MARKET AREA THAT'S UNIQUE. SO AGAIN ALL THOSE THINGS GO INTO DETERMINING WHEN WE SAY LOCATIONAL VALUE, LOCATIONAL VALUE SUFFICIENTLY REFLECTED, AGAIN I BELIEVE IT IS. LASTLY I LOOK AT RECENT MARKET EVENTS, ALISO CANYON. WE HAVEN'T SEEN A HOT, HOT SUMMER BUT ALISO CANYON, THE REASON I SAY THAT, THE VERDICT IS OUT WHETHER MARKET SIGNAL THAT WE'VE SEEN IN PRICES SUGGESTS ALISO CANYON SHOULD BE BACK IN PLAY WHEN WHEN ALISO CANYON WENT OUT AND WE LOOKED IN THE FORWARDS, THAT MEANS WE SHOULD SEE SUMMER TRADING THREAD BETWEEN ROCKIES AND CALIFORNIA BELOW WHAT WE HAVE SEEN AT TRADING HISTORICALLY, AND THE WINNER SHOULD BE TRADER HIGHER THAN HISTORICALLY. AGAIN, THAT'S EXACTLY WHAT WE SAW. SO, AGAIN, WE FELT LIKE THAT INFORMATION WAS REFLECTED. JUST THIS PAST WEEK ARIZONA WAS 120 DEGREES. L.A. BASIN WAS BASICALLY NORMAL TEMPERATURES. SO WE SAW THE SO CAL BORDER PRICE WAS REFLECTING THAT EAST OF CALIFORNIA WAS VERY, VERY HOT AND IN NEED OF ADDITIONAL GAS TO BE ABLE TO  FOR GASFIRED GENERATION, WHERE INSIDE THE CITY GATE, L.A. BASIN AREA, BECAUSE THE DEGREE DAYS WEREN'T AS HIGH, THE PRICE FROM CITY GATE TO BORDER WAS PRETTY MUCH TRADING AT A LITTLE BIT ABOVE AVERAGE. AGAIN, THOSE ARE JUST DATA POINTS BUT I CAN PROBABLY  I CAN DRAW ON OTHERS, BUT THOSE ARE EXAMPLES OF AGAIN PRICE SIGNALS WHICH WE THINK IS ULTIMATELY AT THE END OF THE DAY PRICE INDICES SENDING PRICE SIGNALS TO SUGGEST THE LOCATIONAL VALUE ARE REFLECTING EFFICIENCY IN OTHER THINGS

>> THANK YOU. I JUST HAD A FOLLOWUP QUESTION FOR ALL OF YOU. I THINK WE'VE HEARD THAT PEOPLE FEEL PRETTY CONFIDENT IN INDICES THEY ARE SAYING AND FEEL LIKE THEY ARE REFLECTING THE MARKET PRICES AND I WAS WONDERING IF WE COULD HEAR A LITTLE BIT ABOUT WHETHER PEOPLE FEEL LIKE THERE ARE POTENTIAL IMPROVEMENTS TO THE VALUE THAT'S REFLECTED IN THOSE PRICES THAT COULD HELP WITH DECISION MAKING OR ANY MORE INFORMATION THAT COULD BE HELPFUL IN PROVIDING BETTER DECISION MAKING.

>> IF I COULD ANSWER THAT A LITTLE BIT, I AGREE. WE PROBABLY LISTENED TO OVER 20 PEOPLE NOW, FIRST PANEL AND THIS PANEL AND MY SENSE IS THERE IS A CONSIDERABLE AMOUNT OF AGREEMENT AND CONSENSUS AROUND THE FACT HIGH CONFIDENCE IN THE INDICES, PEOPLE DO SEE THIS AS A MARKET FUNCTIONING VERY WELL. THERE ARE CLEARLY SOME QUESTION MARKS AROUND SOME INDICES AT SOME POINTS HOW MANY ACTUAL FIXED PRICE TRANSACTIONS ARE FORMING THAT INDEX INCLUDING THAT INVOLVES OVER TIME, DEPENDS, I'D LIKE TO BUILD ON WHAT DAVID SAID, AND I HOPE IT WILL ANSWER YOUR QUESTION AS WELL. THE INTERESTING POINT IS, YOUR COMMENT DAVE, THERE AREN'T MANY TRANSACTIONS FORMING THAT AND HAVE QUESTION MARKS ABOUT LIQUIDITY. YOU HAVE TO RECOGNIZE ENORMOUS AMOUNT OF DATA IN THIS MARKET, AN INCREDIBLE TOOL SO WE ACTUALLY KNOW WHAT PRICES ARE AT DIFFERENT POINTS, HOW MANY TRADES ARE MADE, WHAT VOLUMES ARE, LOTS OF OTHER TOOLS YOU CAN HAVE IN THE MARKETPLACE TO TELL BUT VOLUME FLOWS AND ABOUT HOW PRICES REVOLVING, WE'RE VERY, VERY DATA RICH IN THIS INDUSTRY. WHAT THAT DOES IS IT GIVES EVERYBODY WHO IS ACTING IN THE INDUSTRY THE CAPABILITY TO UNDERSTAND WHAT IS HAPPENING IN THE DIFFERENT POINTS IN TIME TO THEN FORM THE DECISION ABOUT HOW THEY WANT TO TRADE. SO YOU ASKED THE QUESTION WHICH IS WHAT DO YOU NEED MORE. I WOULD SAY WE HAVE AN ENORMOUS AMOUNT NOW AND THE VOLUNTARY REPORTING, YOU HAVE A FANTASTIC SET OF DATA CAN YOU USE TO UNDERSTAND WHAT THE RISK AND BENEFITS ARE OF TRADING IN DIFFERENT WAYS AT DIFFERENT POINTS AND FREEDOM TO ACT. SO IF YOU DON'T LIKE NECESSARILY HOW AN INDEX IS BEING FORMED YOU HAVE THE FREEDOM TO DO FIXED PRICE TRADES AND RECORD THEM FOR THE INDEX. WE HAVE FANTASTIC VISION AND OPTICS WHAT IS HOW THERE AND HOW INDICES ARE ACTUALLY BEING FORMED.

>> GUILLERMO?

>> THANK YOU. I'M GOING TO BE QUITE ISO CENTRIC, THE END USER PERSPECTIVE THAT WE BRING TO THE TABLE. WE'RE CONFIDENT WITH THE QUALITY OF INDICES AND HOW REFLECTIVE THEY ARE. THE COMPLICATIONS RECENTLY HAS TO DO MORE WITH TIMING OF THE INDICES. WE RELY ON PUBLISHED INDEX, NEXTDAY INDEX, THEY COME AT DIFFERENT TIMES MUCH DAY. WHEN YOU ALIGN WITH TIME FRAME OF ENERGY MARKET THAT'S WHERE SOMETHING THAT STARTS TO CONFLICT, LET ME TELL YOU TIMEWISE APPROACH, SO DURING THE DAY YOU HAVE ALL THE INDICES COMING OUT, PUBLISHED. AT THE END OF THE DAY HAVE PLATTS, NGI, SNL AND ONE OTHER. ONCE WE COLLECTED ALL THESE FOUR INDICES WE COME WITH A BLENDED INDEX. AT THE END OF THE DAY WE HAVE THE BLENDED INDEX. NOW IF YOU OVERLAP WITH TIME FRAME OF THE DAY MARKET, NEXT MORNING WE COME AT TEN IN THE MORNING AND START TO RUN THE DAYAHEAD MARKET FOR ELECTRIC MARKET. WE START ATTENDING THE MONEY. AT THAT POINT IN TIME THE MOST RECENT AVAILABLE PUBLISHED INDEX IS THE ONE FROM THE DAY BEFORE. SO IF YOU HAVE TO PICK AN INDEX TO RUN YOUR DAYAHEAD MARKET FOR THE ELECTRIC MARKET, THAT IS INDEX THAT IS AVAILABLE. A PUBLISHED INDEX. WHAT MAY HAPPEN IS NATURALLY YOU HAVE ONEDAY LAPSE. WE HAVE MORE RECENTLY INSTEAD OF GOING WITH PUBLISHED INDEX FROM PREVIOUS DAY IS JUST PRIOR TO START RUNNING THE DAYMARKETS WE GO TO THE ICE SYSTEM AND GET THE ESTIMATED INDEX. IT'S NOT A PUBLISHED INDEX. WE HAVE RUN MEASURES TO SEE HOW LIQUID AT THAT POINT IN TIME THE INDEX IS, GENERALLY WE CAN SEE OVER 90% OF TRADES ARE DONE BY THE TIME WE FIX THAT INDEX AND USE IT EFFECTIVELY TO RUN OUR MARKET. THE LIMITATION COMES THAT IT'S AN ESTIMATED INDEX, NOT A PUBLISHED AND QUITE REFLECTIVE OF WHAT THE FINAL PUBLISHED INDEX IS GOING TO BE. FINE FOR THE DAYAHEAD MARKET, IT'S GOING TO CAPTURE THE EXPECTED COST OF GAS FOR NEXT TRADING DA THAT ALIGNS WITH THE DAYAHEAD MARKET AND ELECTRIC MARKET. THE COMPLICATION COMES, ONE WE CLEAR THE DAYAHEAD MARKET, THAT IS BASICALLY 1:00 P.M. PACIFIC TIME, THERE MAY BE INCREMENTAL CHANGES BASED ON EXPECTATIONS OF SUPPLIERS. YOU MAY HAVE TO COMMITMENT ANOTHER RESOURCE NOT EXPECTED TO BE ONLINE OR COMMIT RESOURCES THAT WERE EXPECTED TO BE ONLINE. NOW THEY HAVE TO RECONCILE THAT IN THE INTRADAY OR SAMEDAYTIME FRAME. WHEN YOU GO AND HAVE TO GRAPH AN INDEX FOR THAT, THERE IS NO PUBLISHED INDEX THAT THEY CAN RELY ON TO BASICALLY DETERMINE WHAT IS THE EXPECTED COST. THESE ARE THE COMPLICATIONS WHEN WE HAVE TO ALIGN THE TIME FRAMES OF THE GAS INDEXES PUBLICATION VERSUS RUNNING THE ENERGY MARKET ON THE ELECTRIC SIDE.

>> DAVID AND THEN COREY.

>> DAVID LOUW, MACQUARIE ENERGY. WHEN WE TALK ABOUT IMPROVEMENTS, SOME THINGS ARE RELATIVELY EASY TO DO, SOME OF THOSE THINGS THE COMMISSION CAN EASILY TAKE ACTION ON. SO LIKE LAST YEAR PLATTS AND ICE ANNOUNCED THEIR DEAL TO COLLABORATE, ONE OF THE FIRST THINGS THAT COMES TO MIND IS CURRENT POLICY STATEMENT DOESN'T ADDRESS THIRD PARTY DATA PROVIDER LIKE ICE IN THIS SCENARIO, SOMETHING THAT POTENTIALLY PLACES MARKETSERS AT RISK THAT ARE PRICE REPORTING, POTENTIALLY PUTS ICE AT RISK AS WELL. FOR BOTH PARTIES OR ALL THE PARTIES INVOLVED, IT WOULD BE GOOD IF WE COULD GET CLARITY ON THAT, SOME DISCUSSIONS I'VE HAD WITH STAFF, EVERYONE KIND OF AGREES IT'S NOT EXPECTED BUT SOMETHING WE SHOULD DO. THERE WAS SOME QUESTION ON THE FIRST PANEL THIS MORNING ABOUT, YOU KNOW, SHOULD WE  SHOULD THERE BE A REQUIREMENT OR AN EXPECTATION OF SORTS THAT ANYONE WHO IS PRICE REPORTING SHOULD PRICE REPORT TO ALL PRAs. YOU KNOW, AS A MARKETING COMPANY, I THINK I LIKE THE OPTIONALITY OF CHOOSING WHO TO PRICE REPORT TO. WE PROBABLY REPORT TO MOST OF THE PRAs TODAY BUT PROBABLY NOT ALL OF THEM. I THINK THERE'S A CONCERN THAT IF THERE WAS ANY KIND OF MANDATE THAT YOU HAVE TO DO THIS OR THAT, THERE'S ALWAYS MORE RISK OF UNTENDED CONSEQUENCES, SO THAT'S AN AREA WE'VE GOT TO MOVE CAREFULLY ON AS AN INDUSTRY IF WE WANT TO MOVE DOWN THAT PATH. DEFINITELY GETTING BETTER TRANSPARENCY FOR THE PRAs INTO TRANSACTIONAL DATA IS A GOOD THING. I THINK THERE'S PROBABLY FAIRLY GOOD AGREEMENT THAT WHEN WE'RE TALKING ABOUT NEXTDAY GAS, THERE'S A FAIR AMOUNT OF LIQUIDITY, A LOT OF TRADING THAT TAKES PLACE FOR THE NEXT DAY. MY CONCERN IS MORE AROUND BID WEEK. AND THERE WAS A COUPLE REFERENCES EARLIER TODAY ABOUT THERE'S A NUMBER OF ORGANIZATIONS THAT LEFT THIS MARKET THAT ARE EITHER COMPLETELY OR EVEN THOSE STILL IN THE MARKET ARE TRADING LESS FIXED PRICES, ESPECIALLY DURING BID WEEK. WHEN I SPEAK TO OTHER TRADERS, WHEN I SPEAK TO THE TRADERS THAT I COVER, AND MY ROLE IS BEING COMPLIANCE, ONE THING, I'M THE INTERNAL TOM. I'M THERE TO MAKE SURE THAT OUR GUYS ARE FOLLOWING THE RULES AS WELL. SO WE INTERACT WITH THEM ON A DAILY BASIS, AND PRETTY ACTIVELY DURING BID WEEK AS WELL. AND EVEN THERE YOU HEAR ACROSS THE BOARD PEOPLE ARE VERY HESITANT TO WANT TO TRADE FIXED PRICE, ESPECIALLY IN BID WEEK. ORLANDO MADE A REFERENCE THIS MORNING TO THERE'S SO FEW PLAYERS NOW THAT YOU CAN EASILY BECOME A SIGNIFICANT PART OF AN INDEX, ONE COMPANY OR ONE INDIVIDUAL TRADER. THAT IMPOSES A LOT OF RISK ON COMPANIES. SO IF PART OF THE SOLUTION NEEDS TO BE WHAT DO WE DO TO GET PEOPLE BACK INTO EITHER GET COMPANIES TO COME BACK OR NEW COMPANIES TO ENTER THAT MARKET, OR GET COMPANIES TO TRADE MORE FIXED PRICE, THAT'S THE FUNDAMENTAL PIECE WE HAVE TO ADDRESS. FOR I THINK FOR MANY YEARS, WE'VE ASKED THE QUESTION OF ENFORCEMENT AND OF THE COMMISSION TO COME BACK AND BETTER DEFINE FOR US WHAT MANIPULATION IS, SPECIFICALLY WHEN WE'RE TALKING  WE'RE TALKING ABOUT RELATED POSITIONS, SO IT'S TRANSACTING IN FIXED PRICE PRODUCTS AND HAVING SOME OTHER RELATED POSITION WHETHER PHYSICAL OR FINANCIAL MARKETS. THIS IS MAYBE AN OPPORTUNITY TO CHANGE THAT QUESTION A LITTLE BIT AND SAY WHAT CAN WE DO TO EXPAND THE SAFE HARBOR, TO TELL COMPANIES THAT ARE PRICE REPORTERS IF YOU'RE GOING TO PRICE REPORT AND IF YOU FOLLOW CERTAIN RULES, AND THAT'S WHERE I THINK THE STAFF CAN LAY OUT FOR US WHAT THAT RULE  WHAT THAT SET OF RULES NEEDS TO BE, THAT WILL PROVIDE US SOME SAFE HARBOR FROM SOME VERY COSTLY AND TIME CONSUMING INQUIRIES AND INVESTIGATIONS THAT WE HAVE TO DEAL WITH. THAT'S SOMETHING THAT I THINK WILL HELP COMPANIES AND MARKET PARTICIPANTS GENERALLY, ONE, COME BACK TO THE MARKET. FOR THOSE PEOPLE THAT ARE IN THE MARKET, RELYING ON THESE INDICES, THAT WILL BE REALLY GOOD FOR THEM TO GET MORE CONFIDENCE IN THE INDICES, TO KNEE PEOPLE THAT ARE TRANSACTING IN THESE MARKETS AND PRICE REPORTING HAVE STRONG AND ROBUST INTERNAL CONTROLS IN PLACE.

>> THANK YOU.

>> YOU'RE SUGGESTING, DAVID, JUST TO BE CLEAR, EXPANSION OF THE SAFE HARBOR THAT'S NOT JUST BROADER LANGUAGE BUT ADDRESSES BEHAVIOR OF TRADERS DURING BID WEEK, THAT TYPE OF THING?

>> YES. ABSOLUTELY.

>> OKAY.

>> COREY?

>> MUCH LIKE WAS TALKED ABOUT THIS MORNING WHEN YOU'RE NOT THE FIRST ONE TO TALK IN A PANEL SOME POINTS ARE BROUGHT UP. I DO WANT TO EXPAND ON SOME OF WHAT DAVID SAID. AS WELL AS SOME THINGS THAT WERE SAID THIS MORNING. GOING BACK TO SOME STATISTICS THAT ORLANDO THREW OUT, THE TWO GENTLEMEN YOU HAD SPEAK ON THE 552 REPORT, YOU CAN CLEARLY SEE THAT THE LARGER PARTICIPANTS IN THE MARKET DO MAKE UP A LARGER SIZE OF THE REPORTABLE DATA. AND MUCH LIKE PAUL BROUGHT UP, THERE IS A LARGE AMOUNT OF DATA. IT'S JUST A MATTER OF HOW MUCH OF THAT DATA IS ACTUALLY BEING SUBMITTED TO CALCULATE THE INDEXES. I ALSO AGREE THAT YOU SHOULDN'T MANDATE ANYBODY TO DO IT BUT THERE'S A CERTAIN THRESHOLD PEOPLE SHOULD BE ENCOURAGED TO REPORT. BECAUSE IF YOU FOLLOW THE OLD 90/10 ADAGE YOU'RE GOING TO HAVE 90 OR 80% OF ALL THE DATA COME FROM 10 TO 20% OF MARKET PARTICIPANTS JUST BECAUSE OF THE SIZE OF LARGER PARTICIPANTS. I INCLUDE OURSELVES IN THAT CATEGORY. THE OTHER THING THAT COULD BE AN IMPROVEMENT IS THE PROCESS IS NOT BROKEN. IT'S JUST A MATTER OF EVERYBODY DOES IT A LITTLE BIT DIFFERENT. TO GIVE ICE SOME KUDOS DURING BID WEEK ONE OF THINGS THAT'S VERY USEFUL IS THEIR DAILY BID WEEK REPORT BECAUSE THEY SUMMARIZE AND DO AN AVERAGE OF EVERYTHING THAT IS TRADED THAT DAY ON THEIR PLATFORM, AND I KNOW THAT PERSONALLY HAVING TRADED AS WELL AS DEALING WITH OTHERS A LOT OF PEOPLE WILL REFERENCE THAT IN THE SECOND DAY OF BID WEEK, TO START WHERE THEY SHOULD START BIDDING OR OFFERING DEPENDING ON THEIR POSITION IN THE MARKET. HAVING A PLATTS OR NGI DO SOMETHING LIKE THAT I THINK WOULD ALSO BE BENEFICIAL. YES, IT'S COST TO THE ACTUAL  I THINK IT'S COST TO THE ACTUAL PRA, TO THE EXTENT DATA IS TAKEN ON A DAILY BASIS IN BID WEEK INSTEAD OF AVERAGING OVER THREE DAYS IS SOMETHING THAT COULD BE IMPROVED UPON. I WANT TO STATE THE PROCESS IN ITSELF IS NOT BROKEN. AND THEN DAVID I THINK REALLY KIND OF HIT WHAT I THINK THE MAIN THING AROUND PRICE REPORTING IS, BECAUSE IT'S SOME DEBATE WE HAVE INTERNALLY IN THE CHENIERE ORGANIZATION IS THE SAFE HARBOR RULES. I DO THINK THAT IT NEEDS SOME TYPE OF EXPANSION. I THINK IT DOES NEED SOME TYPE OF ASSURANCES TO THE EXTENT THAT YOU ARE GOING TO PRICE REPORT, THAT THERE IS A THOUGHT OUT THERE THAT IF DO YOU PRICE REPORT YOU ARE THAT MUCH MORE OPEN TO SOME TYPE OF INVESTIGATION BY THE OFFICE OF OVERSIGHT. I THINK SOME RULES NEED TO BE LOOKED AT AND THIS IS PROBABLY NOT SOMETHING THAT CAN BE DECIDED TODAY BUT SOMETHING THAT SHOULD BE LOOKED AT IN TERMS OF EXPANSION OF THE SAFE HARBOR PROVISIONS BECAUSE I KNOW FOR US INTERNALLY AS WELL AS HAVING BEEN IN THE BUSINESS FOR A LONG TIME THAT IS PROBABLY THE MAIN THING THAT HAS PEOPLE NOT REPORT THEIR DATA.

>> THANK YOU. PAUL?

>> ACTUALLY A QUICK FOLLOWUP QUESTION.

>> GO AHEAD.

>> ON THE SAFE HARBOR SIDE, WHEN YOU SAY THAT'S THE NUMBER ONE REASON WE MADE A DISTINCTION NOW BETWEEN WHAT DAVID IS CALLING AN EXTENSION OF SAFE HARBOR TO INCLUDE BEHAVIOR AND YOU'RE SAYING PRICE REPORTING, ARE YOU SAYING THAT THERE'S A FEAR OF PEOPLE BEING OPEN TO LIKE AUDITING PROCESS AND MIST REPORTING, DO YOU THINK THAT FEAR IS GREATER, ABOUT THE SAME OR THE SAME THING?

>> THE SAME THING. PEOPLE DO NOT WANT TO REPORT DATA FOR FEAR IT'S WHETHER REAL OR NOT, A PERCEIVED FEAR SOMEHOW OR ANOTHER THERE IS A GREATER LIABILITY, OR THAT THEY ARE THEN OPENING THEMSELVES UP TO MORE LIABILITY BY BEING A PRICE REPORTER.

>> IF I COULD BUILD ON THAT, TWOFOLD. I THINK ONE IS PEOPLE ARE NOT NECESSARILY PRICE REPORTING BECAUSE THEY HAVE CONFIDENCE IN THE INDICES AND THINK IT'S WORKING VERY WELL, THEREFORE THEY DON'T REALLY SEE THE NEED TO DO SO. THEY ARE NOT COMPELLED TO DO SO, AND I BELIEVE IF THEY WOULD FEEL COMPELLED THEY WOULD DO SO. I SUPPORT WHAT COREY AND DAVID ARE BEEN SAYING, IT'S ABOUT REGULATORY RISK WHICH PEOPLE FEEL THEY ARE GOING TO BE RUN FIGURE THEY PRICE REPORT. THAT MIGHT BE A PERCEPTION, THAT MIGHT BE REALITY, BUT THERE IS A BELIEF THAT, YOU KNOW, INADVERTENT ERRORS CAN LEAD TO A RISK FOR TIME AND EFFORT, TO ANSWER THE QUESTION ASKED, HOW DO YOU GET MORE PEOPLE TO PRICE REPORT IN THE MARKET AND ENCOURAGE FIXED PRICE TRANSACTIONS AND FEED INDICES, YOU NEED TO LOOK LONG AND HARD AT REGULATORY RISK. THE MORE YOU CAN MAKE IT LOW COST, EASY, LOWER THE RISK, THE MORE LIKELY TO ENTICE PEOPLE TO VOLUNTARY PRICE REPORT, THAT'S SOMETHING WHICH WE RECOMMEND MORE CONSIDERATION GIVEN.

>> SUSAN?

>> YEAH, SO I THINK I'M GOING TO FOLLOW UP ON WHAT WAS DISCUSSED IN THE FIRST PANEL, ALSO WHAT HAS BEEN UNDER DISCUSSION WITH THIS PANEL ON THE SAFE HARBOR. AGA MEMBERSHIP REFLECTS COMPANIES THAT BOTH REPORT TO PRAs AND THOSE WHO DO NOT REPORT. REPORTING MEMBERS HAVE INDICATED TO US THEY HAVE WAIVED COST AND RISK AND FELT IT WAS IMPORTANT TO CONTRIBUTE TO LIQUIDITY. NONREPORTING MEMBERS HAVE INDICATED MAIN REASONS BEHIND THOSE DECISIONS WERE COST ASSOCIATED WITH INTERNAL SYSTEMS AND REGULATORY RISK. MORE SPECIFIC CONCERNS JUST A LITTLE BIT MORE OF A DIVE WOULD BE HOW DIFFERENT REPORTING SYSTEMS AMONG LDCs UNDER A SINGLE CORPORATE PARENT, CONCERNS HOW DATA WOULD BE INTERNALLY TO ENSURE COMPLIANCE, TIME AND COST OF THE MIDDLE OFFICE REVIEW, ET CETERA. SOME NUMBERS ALSO AS WE HEARD TODAY EARLIER FELT THAT THE NEED TO REPORT TRANSACTIONS WAS ALREADY BEING ACCOMMODATED BY THE INCLUSION OF INFORMATION REGARDING ICE TRANSACTIONS BY THE PRAs. BUT THE GOOD NEWS HERE IS THAT SOME OF THE NONREPORTING MEMBERS HAVE INDICATED WITH NO GUARANTEES BUT THAT THEY WOULD GO BACK AND REEVALUATE THEIR DECISION ON REPORTING IF THE SAFE HARBOR WERE STRENGTHED. WE'RE ECHOING, WE COULD LIKE TO SEE DISCUSSION ON HOW TO FURTHER STRENGTHEN SAFE HARBOR PROVISION TO PROMOTE CONTINUATION OF VOLUNTARY REPORTING. THANKS.

>> THANK YOU.

>> I'M GOING TO ASK A QUESTION HERE, I MAY REPEAT IT IN THE THIRD PANEL. I DID WANT TO TALK, DAVID, ON YOUR POINT WITH SAFE HARBOR, I THINK IN THE FIRST PANEL WE ALSO TALKED ABOUT REASONS WHY PEOPLE MAY NOT BE  MAY HAVE LEFT THE MARKET AND MAY NOT BE TRADING FIXED PRICE FOR EXAMPLE, GREATER REGULATION ON FINANCIAL SIDE, AND OTHER  THE PROFITS AND VOLATILITY IN THE MARKET IS JUST NOT THERE. IT'S EXPENSIVE TO GET INVOLVED IN THE BUSINESS WITHOUT MUCH OF A RETURN. I WAS WONDERING IF WE WERE TO IMPROVE SAFE HARBOR TO PROVIDE SOME SORT OF PROTECTION FOR BEHAVIOR AS WELL, HOW MUCH MORE  THERE'S A DIFFERENCE BETWEEN THE REPORTING AND NEW TRADERS COMING INTO THE MARKET, SO I WAS WONDERING IF YOU COULD SPEAK ABOUT WHETHER HOW MUCH YOU THINK WOULD BE NEW TRADING IN THE MARKET VERSUS MORE PEOPLE JUST REPORTING.

>> THAT'S OBVIOUSLY A VERY HARD QUESTION TO ANSWER DEFINITIVELY.

>> I LIKE TO ASK HARD QUESTIONS.

>> SPEAKING TO PEOPLE IN THE MARKET, WE SEE  WE HEARD THIS MORNING THAT NINE OUT OF THE TEN COMPANIES THAT HAVE SEEN CREDIT INCREASE IN ACTIVITY ARE NOT CURRENTLY PRICE REPORTING. EVEN THOUGH THOSE AREN'T NECESSARILY NEW ENTRANTS THOSE WOULD BE THE FIRST COMPANIES I WOULD EXPECT WOULD BE MUCH MORE INCLINED TO START REPORTING, SO THAT WOULD BRING MORE TRANSPARENCY IF THOSE COMPANIES WERE ACCELERATING THE MARKET, JUST ENTICING THEM TO START REPORTING. AND I THINK THAT'S THE FIRST PART OF THAT ANSWER. I THINK THERE ARE GENUINELY THOUGH COMPANIES THAT ARE LOOKING AT EITHER GETTING BACK INTO THE MARKET, AND THERE'S OTHER NEW ENTRANTS WE WILL SEE COMING BACK INTO THE MARKET AS WELL. $3 GAS IS NOT PARTICULARLY ATTRACTIVE, THE FORWARD CURVES ARE STARTING TO MOVE A LITTLE BIT. AND I GO BACK TO WE'VE GOT ALL THESE EXCITING THINGS HAPPENING WHICH IS GOING TO LEAD TO MORE VOLATILITY, WHICH THAT BRINGS OPPORTUNITY FOR PEOPLE TO COME INTO THE MARKETPLACE. YOU'VE GOT TO BE ABLE TO CAP THE  IT'S ALWAYS A COSTBENEFIT ANALYSIS FOR ANYONE THAT'S GOING TO TRY TO COME INTO THIS MARKET. AND THE MORE OF THOSE REGULATORY UNCERTAINTIES AND REGULATORY COSTS THERE ARE, THAT'S MORE DOWN SIDE AND MORE COST THEY HAVE TO CONSIDER. THE MORE OF THOSE THINGS WE CAN HELP ELIMINATE THE EASIER IT WILL BE FOR THOSE COMPANIES TO GET INTO THE GAS MARKET. DOES THAT ANSWER?

>> YEAH, I GUESS. THE ONLY FOLLOWUP I WOULD HAVE IS WHERE WOULD YOU RANK, IF YOU HAD TO RANK WHAT WOULD BE KEEPING PEOPLE OUT OF THE MARKET, WHO HAVE LEFT THE MARKET, WHERE WOULD YOU PUT THE REGULATORY RISK ASSOCIATED WITH THE PRICE REPORTING, AS COMPARED TO OTHER REGULATORY REQUIREMENTS LIKE DODDFRANK AND BOZEL 3 AND VOLATILITY IN THE MARKET, THERE'S LACK OF VOLATILITY IN THE MARKET. COULD YOU ASK ANOTHER HARD QUESTION TO DO THAT?

>> THEY ARE RANKED FAIRLY EVENLY. IT'S NOT THAT ONE IS MORE IMPORTANT THAN THE OTHER. THEY ARE THINGS LIKE WHEN YOU TALK ABOUT BOZEL 3, JUST THE COST OF CAPITAL, KNOWN QUANTITIES. THAT'S A VERY BLACK AND WHITE ANALYSIS. EITHER CAN YOU OR CAN'T MAKE IT WORK. PEOPLE ARE SUBJECT TO THAT TODAY MAKING IT WORK. SO I DON'T THINK THAT THAT'S AN ABSOLUTE  IF YOU'RE SUBJECT TO STRINGENT CAPITAL REQUIREMENTS THAT YOU CAN'T SURVIVE IN THIS MARKET. BUT DEFINITELY YOU KNOW REGULATORY RISK IS ONE OF THE TOP AREAS, AND BECAUSE FOR TWO KEY REASONS. ONE, THE REPUTATIONAL RISK TO INSTITUTIONS IS VERY HIGH. AND TWO, CARRIES A LOT OF UNCERTAINTY. SO UNLIKE CAPITAL REQUIREMENTS WHICH ARE BLACK AND WHITE, REGULATORY RISK AND REGULATORY TRENDS ARE SOMETHING YOU REALLY DON'T KNOW. YOU DON'T KNOW IF YOU'RE COMING INTO THIS MARKET. IS MY WORST CASE OUTCOME THAT I'M GOING TO BE SUBJECT TO, YOU KNOW, A MILLION DOLLAR FINE, OR IS IT A $400 MILLION FINE? THAT'S KIND OF THE NUMBERS THAT WHEN YOU'RE SITTING ON THE OUTSIDE YOU'RE SEEING THOSE RANGES OF PENALTIES ON FIRMS. THERE'S OBVIOUSLY A LOT THAT GOES INTO THAT BUT THAT'S A VERY BIG RANGE OF UNCERTAINTY THAT COMPANIES HAVE TO FACE.

>> JUST A QUICK FOLLOWUP, YOU OBVIOUSLY CAN'T ANSWER THIS ON THE SPOT BUT WHAT WOULD SOME TYPE OF BEHAVIORAL SAFE HARBOR, YOU HEARD PEOPLE SPECULATE WHAT THEY HAVE IN MIND WITH THAT?

>> THAT I THINK IS GOING TO TAKE A LITTLE BIT MORE WORK.

>> EVEN BESIDES THE PANEL 3, THINK ABOUT IT.

>> YOU HAVE A REPRIEVE FOR NOW. LEE, PALLAS AND GEORGE.

>> THANK YOU. WE'VE BEEN TALKING ABOUT ENCOURAGING FOLKS TO REPORT AND I GUESS I JUST WANTED TO SUGGEST THAT THE FOCUS BE ON THOSE WHOSE BUSINESS IS THE BUYING AND SELLING OF GAS OR THE BUYING OR SELLING OF GAS, AND I RELATE THAT BACK TO WHO I'M REPRESENTING WITH INGA, AND THAT IS OUR PRIMARY BUSINESS IS NOT BUYING AND SELLING GAS, IT'S MOVING GAS FROM POINT A TO POINT B. SO WHEN WE'RE BUYING GAS WE'RE DOING SO TO, AS WE TALKED ABOUT, CASH OUT AND END BALANCE OR SOMETHING THAT OCCURRED DURING OUR OPERATIONS. SO I WOULD SUGGEST THAT YOU WOULDN'T WANT TO FOCUS ON THE PIPELINES THAT THE AMOUNT OF TRADES THAT ARE OCCURRING THERE, THAT'S NOT A REGULAR EVENT FOR US. THAT'S  SO WITH THAT IN MIND I WOULD FOCUS ON THOSE THAT ARE REGULARLY DOING IT. DOING IT ON A DAY IN AND DAY OUT BASIS AND THOSE WOULD BE THE ONES YOU WOULD WANT REPORTING.

>> TO THE EXTENT YOUR PIPELINES BY AND SELL NATURAL GAS FOR OPERATIONAL NEEDS DO YOU REPORT TRANSACTIONS BASED ON FIXED PRICE?

>> WHEN WE'RE BUYING AND SELLING GAS? WE DO SO THROUGH MANY DIFFERENT WAYS, BUT THROUGH RFPs. WE RECENT REPORT UNLESS IT IS ABOVE 2.2 BCF AND REPORT THROUGH THE FORM. BUT AS FAR AS REPORTING TO THE INDEX PROVIDERS, WE DON'T REPORT. BUT AGAIN I WOULD SUGGEST THAT THAT'S NOT THE GROUP YOU WOULD WANT TO FOCUS ON. THE VOLUMES THAT ARE BEING DONE AS WELL AS THE FACT THAT IT IS A SPORADIC EVENT WOULD TELL ME THAT'S NOT WHO YOU WANT.

>> THANK YOU. PALLAS?

>> SO I GUESS I WANT TO PURSUE A DIFFERENT THREAD. WE DON'T REPORT BECAUSE WE'RE MORE OF A CONSUMER OF THE INFORMATION SO THIS MIGHT SEEM LIKE A NONSEQUITUR AFTER THIS SERIES OF COMMENTS BUT BEFORE WHEN I WAS TALKING, BECAUSE OF HOW WE USE THE INFORMATION IN CONJUNCTION WITH OTHER INFORMATION BECAUSE WE HAVE THE ABILITY TO TALK TO ELECTRIC GENERATORS AND AUGMENT SOME OF THE PUBLICLY AVAILABLE INFORMATION WITH SOME PRIVATE INFORMATION, FOR THE MOST PART I THINK WE'RE PRETTY HAPPY WITH OUR ACCESS TO INFORMATION, BUT THE 3% OF THE TIME WHERE WE HAVE CONCERNS DEAL WITH A COUPLE OF REALLY CHALLENGING WINTERTIME SITUATIONS, SO LIKE, YOU KNOW, I THINK THE MOST FRUSTRATING THING WOULD BE LIKE WEEKENDS, SO YOU HAVE A THREEDAY STRIP OR FOURDAY STRIP BECAUSE IT SEEMS LIKE COLD WEATHER IS CORRELATED WITH THREEDAY WEEKENDS IN RECENT YEARS. [LAUGHTER] SO YOU KNOW WE'LL BE COMING INTO A WEEKEND WHERE ON FRIDAY THE GAS PRICE IS $5 AT A PARTICULAR LOCATION, THE WEEKEND STRIP IS $15, AND WE CAN SEE FROM LOOKING AT WEATHER DATA ON SATURDAY THERE'S NO REASON TO THINK THE PRICE SHOULD BE HIGHER THAN $5, SO YOU ARE REALLY DEALING WITH A SITUATION WHERE THE PRICE OF GAS IS VARYING WILDLY AFTER THE WEEKEND AND THE INFORMATION THAT'S AVAILABLE ON THAT IS ASTOUNDINGLY LIMITED. IT WOULD BE LIKE IF YOU WANTED TO RENT THE HOTEL ROOM AND NO HOTEL ROOM IN THE CITY WAS WILLING TO RENT YOU JUST ONE NIGHT. EVERY HOTEL ONLY DOES THREE NIGHTS, THREENIGHT STAYS, AND SO, YOU KNOW, IT JUST MEANS IF THERE'S ALREADY SOME OF THE INFORMATION CAN BE SKETCHY FROM INDICES OR HAVE LIMITED REPORTING, YOU KNOW, THE GRANULARITY OF INFORMATION ON THE THREE OR FOURDAY STRIP IS REALLY A PROBLEM, SO THAT REQUIRES EVEN MORE OF THAT SORT OF AUGMENTATION I WAS TALKING ABOUT AND ULTIMATELY IS GOING TO, YOU KNOW, WIND UP WITH SOME KIND OF IMPRECISION THAT ULTIMATELY AFFECTS ELECTRIC CLEARING PRICES OR PAYMENTS.

>> GEORGE?

>> WITH REGARD TO SUGGESTION AROUND IMPROVEMENTS, ONE OF THE AREAS CERTAINLY I THINK I ADDRESSED THIS BEFORE BUT MAINTAINING OR INCREASING THE NUMBER OF PRICE DEVELOPERS THAT ARE OUT THERE. I MEAN, AT SOME POINT YOU GET FRAGMENTED, I'M NOT SAYING A LOT, BUT MORE INTEGRITY OR PRICES THAT ARE DEVELOPED THAT ARE DIVERSE IS HELPFUL TO HELP YOU TRIANGULATE TO UNDERSTAND AND PICK ONE VERSUS THE OTHER TO SAY YOU GET A FEELING OF COMFORT, IS THAT A FAIR PRICE, YOU HAVE SEVERAL DIVERSE PRICE DEVELOPERS. WHEN I SAY DIVERSE, WHERE WE ARE NOW WHEN YOU LOOK AT PLATTS AS A ONESTOP SHOP IN TERMS OF CONSULTING, RESEARCH, NEWS AND PRICE DEVELOPER, ICE IS REALLY PURELY MORE OF A PRICE DEVELOPER. AND ICE  I MEAN YOU HAVE NGI, SORT OF END PRICE DEVELOPER BUT THEY ARE ALL A LITTLE UNIQUE AND THAT CREATES A DIFFERENT MAYBE MARKET PERSPECTIVE, PARTICULARLY WHEN YOU DEVELOP NEWS FROM THAT PRICE, YOU MAY GIVE A DIFFERENT SLANT THAN YOU MIGHT SEE OTHERWISE. I THINK THAT KEEPING THAT DIVERSITY IS IMPORTANT, TO BE ABLE TO REALLY LACK OF A BETTER WORD DOES THAT DOG HUNT, SO TO SPEAK, UNDERSTANDING IS THAT REALLY REFLECTING A FAIR PRICE. ANOTHER ONE THAT HASN'T BEEN BROUGHT UP IS THE PROCESS OF ADDING AND DELETING PRICING POINTS. I KNOW LIKE FOR INSTANCE ICE I KNOW ACTUALLY HAS A PROCESS, TWO OR THREE WEEKS AHEAD OF TIME, THEY PLAN ADDING OR DELETING A PRICING POINT IN THEIR SYSTEM, YOU CAN CALL AND BILATERALLY VET THAT. THAT'S IMPORTANT BECAUSE THERE'S BEEN TIMES WHEN WE'VE HAD ISSUE WITH THE PRICING POINT THAT LITERALLY MAY BE A MARKET MAKER ON THE OTHER SLIDE OF THE FLANGE, OKAY, WHERE TWO PIPELINES INTERSECT BUT LITERALLY ON THE OTHER SIDE OF THE FLANGE IS ANOTHER PRICING POINT THAT PHYSICALLY THERE'S NO DIFFERENCE, AND THAT COULD DEVALUE UPSTREAM OR DOWNSTREAM THAT PIPE, OKAY? SO AGAIN MAKING THAT TRANSPARENT, KEEPING IN THE PROCESS OF WHEN YOU DECIDE TO ADD AND DELETE POINTS. ANOTHER ONE IS ACCESS TO HISTORY. IT'S IMPORTANT TO BE ABLE TO HAVE ACCESS TO HISTORY TO UNDERSTAND TRENDS. IN PARTICULAR, BACK OFFICE STUFF. WHEN WE LOOK AT  DOESN'T HAPPEN OFTEN BUT WE HAVE TO RECONCILE WITH CUSTOMER INVOICES, OKAY? SOMETIMES A TRADE THAT GOES INTO THE MONTHLY INDEX, SOMETIMES THERE'S A TRADE MISSING. YOU HAVE TO BE ABLE TO EITHER TRIANGULATE, BOOT STRAP, OR REFERENCE ANOTHER PRICE DEVELOPER TO ADD INTO THAT PARTICULAR SET OF PRICES TO COME UP WITH THE INVOICE, WITH THE INVOICE IN WHICH THE CUSTOMER IS AGREEABLE. YOU NEED THAT HISTORY TO DO THAT AND HAVE ACCESS TO HISTORY. WHEN I SAY HISTORY, I'M TALKING ABOUT DEVELOP HISTORY, I TALKED ABOUT THAT BEFORE. NOT RAW DATA. THAT'S THE DIFFERENCE BETWEEN RAW DATA AND ACTUAL HISTORY THAT'S BEEN DEVELOPED AND PUT OUT THERE IN AN ARCHIVE. I THINK THIS FERC REPORT, FERC REQUIREMENTS REGARDING HOW MUCH HISTORY YOU SHOULD HOLD DEPENDING WHAT TRANSACTION IT IS, THREE TO FIVE YEARS IN SOME CASE, YOU NEED TO HOLD GOING BACK ON A RATE CASE OR OTHER THINGS, YOU HAVE TO BE ABLE TO BRING THAT UP, TO BE ABLE TO RECONCILE ISSUES IN A RATE CASE.

>> YOU FIND MUCH PROBLEM WITH DIVERGENCE AMONG THE INDICES OR DISPUTES OVER DIFFERENT VALUES FOR THE SAME POINT OR SAME RELEVANT POINT BY DEPENDING ON IF IT'S A PUBLISHER OR ICE OR AMONG THE PUBLISHERS?

>> I DON'T WANT TO SAY THAT I SEE A BIAS, ONE WAY OR THE OTHER, BUT I CERTAINLY SEE DIFFERENCES. I CAN SEE SOMETIMES YOU SEE, YOU KNOW, DEPENDING ON LIKE I SAY USUALLY AN EVENT, BUT IT COULD BE  OUR FLAG GOES UP WHEN THEY HAVE BEEN TRADING AT TENTHS OF A CENT DIFFERENT, NGI, PLATTS OR ICE, SUDDENLY IT'S 3 OR 4 CENTS DIFFERENCE FROM EACH OTHER, THAT'S WHEN IT LOOKS AT INVESTIGATING WHAT HAPPENED, WHAT'S DRIVING THE DIFFERENCE. AGAIN, IT HELPS TO TRIANGULATE AND GET COMFORTABLE WITH THAT DIFFERENCE, IF IT'S REAL OR SOMETHING ELSE.

>> THANKS.

>> SWITCHING GEARS A LITTLE BIT HERE, BACK TO LIQUIDITY, TO THE EXTENT THAT NATURAL GAS INDICES ARE LIQUID, THEY ARE BEING REFERENCED, EITHER IN YOUR TARIFF OR ISO, MARKET MITIGATION, WHAT EXTEND IS LIQUIDITY IMPACTING THOSE TARIFF PROVISIONS OR ABILITY TO MITIGATE MARKET POWER?

>> GREGG FROM ISO NEW ENGLAND. SO I THINK I'LL PIGGYBACK ON WHAT GUILLERMO AND PALLAS HAS SAID ALREADY ABOUT THE INFORMATION WE HAVE WHEN WE HAVE IT. AND THEN THE CONCERN THAT WE HAVE. LIKE GUILLERMO SAID THE MARKET CLOSES WHILE THE GAS MARKET IS STILL TRADING, SO WE HAVE TO USE A PRICE FROM THE PREVIOUS DAY FOR NATURAL GAS AS A BENCHMARK FOR WHAT'S GOING TO BE A VALUE FOR THE NEXT DAY. SO RIGHT THERE YOU ALREADY HAVE A GAS PRICE THAT'S ONE DAY STALE. WHICH IS FINE MOST DAYS. EVERY DAY THERE'S NOT A LOT OF CHANGE IN THE VALUE OF GAS. A GOOD EXAMPLE IS TWO WEEKS AGO TENNESSEE TRADED DIFFERENCE OF 6%, DAY OVER DAY, SO INCREASED 6%, WHICH WAS OKAY IN OUR EYES, BECAUSE OUR MITIGATION SPECIALS ARE SET OUT THAT IF SOMEONE IS ACTUALLY OFFERING MARGINAL COST, THEY CAN STILL DO THAT. IF THE PRICE OF GAS INCREASES 6%, OUR THRESHOLDS ARE LARGER THAN THAT. THEY SHOULDN'T FEAR MITIGATION. WHEN IT MATTERS TO US IS ON A FEW DAYS MAINLY IN THE WINTERTIME, WHERE WE ACTUALLY SEE THE PRICE OF GAS DOUBLE DAY OVER DAY, IT DOESN'T HAPPEN OFTEN, ACTUALLY YOU HAVE TO GO BACK TO 2014, IN NEW ENGLAND, TO SEE THE MOST CASES, I THINK IT HAPPENED 15 TIMES THAT WINTER, BUT IF YOU LOOK AT A DAY, JANUARY 17 OF 2014, PRICE OF GAS WAS $6.50, SO THAT'S WHAT WE'RE USING THE NEXT DAY, GOING INTO THE DAYAHEAD MARKET. THE PRICE THAT TRADED ON THAT NEXT DAY WAS $18. SO THREE TIMES WHAT THE VALUE OF GAS WE HAD IN NEW ENGLAND FOR A REFERENCE LEVEL. SO RIGHT THERE WE COULD BE MITIGATING SOMEONE TO A PRICE THAT DOESN'T REFLECT WHAT MARGINAL COST IS. THAT'S A BIG CONCERN FOR US, MITIGATION ISN'T SUPPOSED TO BE PUNITIVE. WE'RE REALLY SUPPOSED TO DETECT MARKET POWER AND PUT PEOPLE BACK TO THEIR COSTS. WE DON'T WANT PEOPLE TO LOSE MONEY. WE'RE TRYING TO PROTECT THE ENERGY MARKET. SO FOR THOSE INSTANCES WE ACTUALLY DEVELOPED A WORKAROUND KIND OF LIKE WHAT GUILLERMO SAID BUT ALLOW PARTICIPANTS TO TELL US WHAT THEIR EXPECTATION OF GAS IS. SO MAINLY IN THE WINTERTIME YOU'RE GOING TO SEE A WHOLE LOT OF GENERATORS COME THROUGH AND SAY, HEY, YOUR INDEX OF $6 DOESN'T MAKE SENSE TO ME. ICE IS TRADING $18, $20, CAN YOU USE THIS PRICE TO SET MY REFERENCE LEVEL INSTEAD, AND HERE IS MY DOCUMENTATION. WE ACCEPT THAT AND WE TRY TO REPRESENT THEIR COSTS ACCURATELY. BUT THOSE ARE THE BIGGEST CONCERNS FOR US, ON THOSE DAYS WE LACK CONFIDENCE THAT THE INDEX THAT WE'RE USING RECOMMENDS THE VALUE OF GAS FOR THE NEXT DAY. IT'S NOT NECESSARILY SAYING THAT WHAT'S TRADING ON ICE IS ILLIQUID OR ROBUST, IT'S JUST A TIMING ISSUE FOR US.

>> OKAY, GUILLERMO?

>> HE ALREADY SAID THE KEY POINTS SO I'LL TRY TO PUT SOME FLAVOR. I THINK ISOs ARE IN THE SAME POSITION OF TIMING COMPLICATION. WHAT IS OUR CONCERN, THE CONCERN IS FIRST WE DON'T HAVE ACCURATE, IT'S NOT GOING TO BE MATERIALIZED IN THE ENERGY MARKET. AND THAT IMPLIES POTENTIALLY SUPPLIERS MAY NOT RECOVER ALL THE COST. THAT'S A BIG CONCERN BECAUSE YOU'RE ASKING THEM, AND THERE'S AN EXPECTATION THEY SHOULD BE ABLE TO RECOVER FULLY DAY COSTS. FOR PRACTICAL SERVICES WE NEED AN INDEX. AT THE END OF THE DAY WE HAVE TO RUN THE MARKET AND DO HAVE AN INDEX. HOW REFLECTIVE THAT IS GOING TO BE IS PART OF THE DISCUSSION, SO GIVE US CONFIDENCE THAT THAT'S THE BEST WE CAN DO. NOW HOW WE CAN RECONCILE THIS TIMING ISSUE, SIMILAR TO WHAT GREGG EXPLAINED, WE'RE TRYING TO COME AS CLOSE AS POSSIBLE TO TIMES WHERE THE MARKET IS DRY, THE CONCERN FOR THE DAYAHEAD MARKET, AS CLOSE AS POSSIBLE. THE ORIGINAL CONCERN WE HAVE WAS YOU CAN MISS THE SPIKES, THE DYNAMICS AND TIMING OF GAS MARKET IS GOING TO BE SUCH A WAY THE ENERGY MARKET CANNOT CAPTURE THAT SPIKE AND SIMILAR TO 2014 SAW SIMILAR EFFECTS, THE DAYAHEAD PRICE WAS RUNNING WITH INDEX IN RANGE OF $3, $4, PRICE SPIKED THREE OR FOUR TIMES, NOT REFLECTIVE IN THE DAYAHEAD MARKET, THE ENERGY MARKET, BUT THAT MEANS THAT NOW WE HAVE TO DISPATCH RESOURCES IN AN EFFICIENT WAY BECAUSE YOU'RE DISPATCHING THEM IN A VERY LOW INDEX, THEY ARE INCURRING HIGH COSTS. I THINK THAT IS THE MAIN CONCERN. THE OTHER CONCERN WITH RESPECT TO REFERENCE LEVEL, THIS IS IF THIS HAPPENS THEY ARE GOING TO BE INVESTIGATED, THEY NEED TO INVESTIGATE WITH RESPECT TO COST, FOR THAT YOU REALLY NEED TO HAVE THE GAS INDEX REFLECTING THE REALITY WHAT THEY HAVE TO RECOVER. AND WHEN WE MOVE NOW INTO THE REAL TIME, THE COMPLICATION IS KIND OF THE SAME. NOW IF THERE ARE MARKET CHANGES, HOW CAN YOU INTRODUCE THAT CHANGE THROUGH THE INDEX SUCH THAT THE ENERGY MARKETS RECOGNIZE THAT SPIKE IN THAT MARKET CONDITIONS CHANGE. THAT IS THE OTHER COMPLICATION WE HAVE. YOU ARE GOING TO INTRADAY TRADES OR SAMEDAY TRADES, WHAT INDEX DO YOU USE, IF YOU HAVE TO BE RUNNING YOUR REALTIME MARKET EVERY 15 MINUTES, EVERY 5 MINUTES, AND USUALLY ONE RESOURCE TO REALIZE WHAT IS THE NEW MARKET CONDITIONS, WHAT MECHANISM, WHAT YOU CAN USE TO REFLECT THIS DYNAMIC CHANGES. THAT IS THE COMPLICATION WE MAY RUN INTO, INTO REALTIME. FOR PRACTICAL PURPOSES, PRICES HAVE BEEN RELATIVELY STABLE, THE VOLATILITY IN THE SYSTEM IS IN THE RANGE OF $3, PLUS/MINUS A FRACTION OF A DOLLAR. IS THAT HIGH RISK? 99% IT'S NOT GOING TO BE WHEN THERE'S A SPIKE. THESE ARE THE PRACTICAL IMPLICATIONS OF HAVING THIS TIMING CONCERN.

>> THANK YOU. GO AHEAD, PALLAS.

>> THANKS. INITIALLY WHEN YOU ASKED ABOUT THIS I WAS THINKING YOU WERE ASKING IF SPECIFIC INDICES WERE NAMED IN THE TARIFF, YOU KNOW, INDEX ABC VERSUS XYZ, THERE'S NOTHING LIKE THAT IN EVERY CASE WHERE AN INDEX IS USED. THERE'S DISCRETION IN THE PROCESS TO USE ONE DEEMED APPROPRIATE, SO IF THAT'S SOMETHING YOU'RE ASKING ABOUT THEN  IF IT WASN'T, THERE HAVE YOU MY ANSWER. I ALSO WOULD ECHO A LOT OF TIMING CONCERNS THAT THESE GUYS HAD WITH OFFER CAPPING PROCESS. IF THE IDEA IS TO USE NATURAL GAS INDEXES AS THE BASIS FOR ESTIMATING SOMEBODY'S TALKS, COMPETITIVE BENCHMARKS FOR OFFERS, AND THE TIMING IS IMPORTANT, BECAUSE THE GAS IS ALWAYS TRADED IN CERTAIN BLOCKS WHERE TIMING IS CRITICAL. NOW THEY I DON'T LINE UP WELL WITH THE ELECTRIC MARKET. IN THE CASE OF NYISO, THE BID SUBMISSION TO THE DAYAHEAD AUCTION OCCURS AFTER THE BEGINNING OF THE GAS TRADING DAY. THERE'S AN OPPORTUNITY, EVEN THOUGH THE DAILY PRICES ESTIMATE HASN'T BEEN POSTED AT THAT POINT THERE'S STILL ABILITY TO LOOK AT TRADING EARLY IN THE DAY TO SEE WHERE THAT IS AND USE THAT AS BASE ITS FOR COST ESTIMATES. IN THE NYISO CASE, BEFORE 5:00 A.M., IN NEW ENGLAND IT'S ONE DAY EARLIER. THAT'S AUGMENTED BY GENERATORS CALLING IN, PROVIDING BASIS FOR ADJUSTMENT, THAT'S GRANTED ON A TRUST BUT VERIFY BASIS. THAT LEADS TO BEING OFFER CAPPED THAT'S LOW. WHEN THE MARKET IS GOING UP, YOU KNOW THAT ESSENTIALLY ADDRESSES THAT CONCERN. WHEN THE MARKET IS COMING DOWN, WE DON'T GET A LOT OF PEOPLE WHO ARE CALLING, ASKING FOR DOWNWARD ADJUSTMENT. AND SO BUT WHAT'S INTERESTING WE DON'T SEE THAT EVERYBODY IS OFFERING BASED ON THE PREVIOUS DAY'S GAS PRICE. WE SEE PLENTY OF MARKET PARTICIPANTS RESPONDING TO COMPETITIVE INCENTIVES OFFERING WHERE WE THINK THE MARKET IS. EVEN THOUGH YOU KNOW THERE'S CLEARLY AN OPPORTUNITY THERE FOR PEOPLE TO PUSH UP ELECTRIC PRICES, WE DON'T FIND  YOU KNOW, THAT GENERALLY IS GOING ON. I THINK THE EXCEPTION WOULD BE LIKE I WAS TALKING ABOUT BEFORE WHEN THERE'S LOCAL MARKET POWER, YOU HAVE A SINGLE GENERATOR, THERE'S NO COMPETITIVE PRESSURE THAT'S GOING TO MAKE THAT GENERATOR DROP ITS OFFER TO SOMETHING THAT IT KNOWS IS WHERE THE GAS MARKET IS TRADING AT BECAUSE THERE'S NO COMPETITIVE PRESSURE. SO BUT FORTUNATELY THAT'S A FAIRLY  THAT'S A PROBLEM WITH A FAIRLY LIMITED SCOPE.

>> JUST TO CLARIFY AND RECAP WHAT I'M HEARING FROM THIS RTOs, THE MARKET MONITORS, MAIN CONCERN IS TIMING, LESS SO AMOUNT OF TRADES FORMING THE INDEX EVEN THOUGH IT'S A DAY OLD.

>> I MEAN, I THINK THE NUMBER OF TRADES IS IN GENERAL ACCEPTABLE. BUT IT DEPENDS A LOT ON WHICH INDEX, WHAT THE CIRCUMSTANCES ARE, TO WHAT EXTENT THAT CAN BE BENCHMARKED AGAINST ANOTHER. THAT'S LOCATION SPECIFIC. THERE ARE CASES WHERE IT PROBABLY IS TOO THINLY TRADED AND THE NUMBER WE HAVE IS  YOU KNOW, ALLOWS SOME  YOU KNOW, A LITTLE EXTRA, YOU KNOW, SWEETENER FOR THE GENERATOR.

>> THANK YOU. DAVID?

>> I JUST MAYBE HAD A FOLLOWUP QUESTION. I WANTED TO CONFIRM, ARE YOU GUYS USING GAS DAILY INDICES FOR ALL OF THESE PURPOSES, I DON'T THINK YOU'RE USING MONTHLY INDICES?

>> YES, IT WILL BE NEXTDAY PRICES.

>> WE HAVE AN EXCEPTION. WE USE NEXTDAY PRICES, DAILY PRICES BUT THERE'S AN OPTION WHERE THEY BE OPT TO USE MONTHLY PRICES.

>> GO AHEAD, GREGG.

>> WE DO USE THE NEXTDAY PRICE EVERY DAY. WE NEVER USE THE MONTHLY PRICES. AND TO YOUR POINT OF MOSTLY CONCERNED WITH TIMING VERSUS LIQUIDITY AND VOLUME, WE'RE DEFINITELY CONCERNED WITH TIMING. VOLUMEWISE, WE'VE SEEN IT TAIL OFF IN RECENT YEARS, SINCE SAY 2011. THE VOLUME IS STILL SUBSTANTIAL ENOUGH WHERE WE THINK THE INDEX REPRESENTS THE CORRECT LOCATIONAL VALUE. THERE ARE CERTAINLY A FEW DAYS DURING THE YEAR WHERE A FEW TRADESES END UPSETTING THE INDEX PRICE BUT ON AVERAGE WE DON'T HAVE AN ISSUE WITH IT.

>> THANK YOU. SO RECOGNIZING THAT THE USE OF NATURAL GAS INDICES AND FERC TARIFFS IS DIFFERENT THAN COMMERCIAL TRANSACTIONS THAT SOME OF YOU GUYS USE THEM FOR THE COMMISSION ESTABLISHED LIQUIDITY THRESHOLDS TALKED ABOUT EARLIER SO INDICES COULD BE REFERENCES IN THE TARIFF. DO THEY CAPTURE THE THRESHOLD OVER APPROPRIATE PERIOD OF TIME AND SHOULD LIQUIDITY OF THOSE INDICES THAT ARE REFERENCED IN THE TARIFFS, ISO NEW ENGLAND'S TARIFFS, BE ASSESSED OVER TIME? GEORGE?

>> IN OUR SHOP, WE CERTAINLY  WHEN WE DECIDE TO CHANGE FROM PARTICULAR INDEX DEVELOPERS TO ANOTHER INDEX DEVELOPER, OBVIOUSLY FERC HAS GUIDELINES AS FAR AS LIQUIDITY TESTS. WE GO THE EXTRA YARD TO POINT BY POINT GO BEYOND THAT, LOOKING AT STATISTICAL SIGNIFICANCE, NOT TO GET INTO THE PARTICULARS BUT, YOU KNOW, STATISTICAL TESTS LIKE VARIANCE OF MEANS, VARIANCE OF VOLATILITY AROUND THE MEAN, MAKING SURE THAT THOSE ARE SIGNIFICANT AND NONDISPARIC WHEN WE MOVE FROM INDEX DEVELOPER TO INDEX DEVELOPER. WITH REGARDS TO, AGAIN, WITH REGARDS TO THE LIQUIDITY, WE JUST WANT TO MAKE SURE THAT WE UNDERSTAND WHO ON ANY PARTICULAR DAY OR MONTH, WHAT WENT INTO THAT PARTICULAR SET OF PRICES OR TRANSACTIONS. AND TRYING TO SEE IF THERE'S ANY AMOUNT OF INFLUENCE THAT MIGHT BE PERCEIVED. BUT THE IMPORTANT PART IS THAT AGAIN AS I STATED, THERE'S  WE FEEL A DIVERSE NUMBER OF INDEX DEVELOPERS THAT WE CAN RECONCILE BETWEEN TRIANGULATE BETWEEN TO GET COMFORTABLE, WHEN WE MIGHT SEE A SMALL LIQUIDITY SHIFT ON ANY GIVEN DAY OR ACROSS TIME BUT IN GENERAL BECAUSE WE HAVE THE DIVERSE NUMBER OF INDEX DEVELOPERS AS WE STAND RIGHT NOW WE HAVEN'T SEEN A PARTICULAR ISSUE OR HAD A PARTICULAR ISSUE.

>> TO CLARIFY, DO YOU ACTIVELY THE NUMBER OF TRADES THAT GO ON AND INDICES REFERENCED IN KINDER MORGAN?

>> YES. WE HAVE A PROCESS, PROBABLY LOOK AT THEM ON A QUARTERLY BASIS.

>> THANK YOU. LEE?

>> FROM OUR PERSPECTIVE STANDARDS SET FORTH BY THE COMMISSION REMAINS SUFFICIENT. IT IS IN THE BEST INTEREST, TARIFFS WORK AS INTENDED. INTERSTATE PIPELINES ESTABLISHED OTHER WAYS TO MITIGATE IMPACT OF THESE INDICES SUCH AS IMBALANCED TRADING AMONG OUR SHIPPERS, SO THAT YOU END UP WITH A LOWER VOLUME BEING IMPACTED BY THOSE INDICES. AND AS FAR AS THE POINT ITSELF, IF A POINT WAS TO BECOME ILLIQUID IT WOULD BE SOMETHING THAT WOULD HAPPEN OVER TIME, IT'S NOT SOMETHING THAT'S, AS FAR AS THE POINT ITSELF, A GIVEN DAY MAY BE SQUIRRELY. BUT THE QUESTION IS REALLY OVER TIME DO THEY MEET THE STANDARD. AND IF IT WERE TO BECOME ILLIQUID IT WOULD BE OVER TIME. PIPELINES WOULD HAVE TIME TO SEE THIS WAS OCCURRING. WE WOULDN'T NECESSARILY KNOW IT. I UNDERSTAND WHAT GEORGE IS SAYING AS FAR AS TRACKING IT BUT WE WOULD KNOW IT BY OTHER MEANS OTHER THAN LOOKING AT INDICES TO SEE WHAT'S GOING ON. OUR SHIPPERS WILL BE TALKING TO US AND EXPLAINING TO US THERE ARE ISSUES AND CONCERNS. WE WILL SEE OPERATIONAL CHANGES OCCURRING ON OUR PIPELINE SO WE'LL KNOW THAT SOMETHING IS GOING ON WHICH WILL PURCHASE US TO TAKE A LOOK AT IT VERSUS HAVING TO REVIEW IT ALL THE TIME. AT THAT POINT IN TIME, THAT'S WHEN WE WOULD WORK WITH OUR SHIPPERS TO EVEN THOUGH THERE'S A GREAT, GREAT DEAL OF WORK INVOLVED, AS GEORGE WAS EXPLAINING, IN MAKING CHANGES TO OUR TARIFFS THAT'S WHEN WE WOULD WORK WITH OUR SHIPPERS TO DETERMINE WHAT IS A POINT THAT'S GOING TO BE MORE REALISTIC FOR THAT MARKET OR BETTER USED TO COVER THAT MARKET. SO  AND WE WOULD DEVELOP ALTERNATIVE POINT AND THEN FILE OUR TARIFFS WITH THE COMMISSION FOR APPROVAL FOR ALTERNATIVE POINT.

>> FOLLOWUP QUESTION, GEORGE TALKS ABOUT WHAT HE PERCEIVED AS COST OF CHANGING INDICES. DO YOU SEE SIMILAR COSTS ASSOCIATED WITH CHANGING A REFERENCE?

>> I'M GOING TO PLEAD THE FIFTH HERE. I ACTUALLY DON'T KNOW ALL THE COSTS INVOLVED. I'M NOT IN THE REGULATORY AREA. SO THAT WOULD BE DIFFICULT FOR ME TO SAY. I DO KNOW THERE'S A GREAT DEAL OF WORK THAT GOES INTO IT.

>> BURDEN, YOU SHOULD CLARIFY, NOT DOLLARS. HE'S TALKING ABOUT THINGS HE WOULD HAVE TO MODIFY OR SYSTEM.

>> LIKE I SAY, AGAIN IT WOULD BE VERY DIFFICULT FOR ME TO SAY. I WOULD SAY THAT I DO KNOW THAT, YOU KNOW, THE SYSTEMS DO, AS GEORGE WAS POINTING OUT, ARE TRANSACTION SYSTEMS, ARE ALL REFERRING TO ONE INDEX VERSUS ANOTHER. I CAN'T TELL YOU WHETHER IT'S ACTUALLY PULLING DATA FROM THAT OR WHETHER THAT'S AN INPUT. SO THAT WOULD BE DIFFICULT. AND IN REALITY, I THINK IT WOULD BE BASED UPON EACH INDIVIDUAL PIPELINE, EACH INDIVIDUAL PIPELINE HAS THEIR SYSTEM SET UP DIFFERENTLY. SO, YOU KNOW, I DON'T KNOW THAT I COULD TELL YOU WHAT THE COST WOULD BE.

>> THANK YOU. DAVID?

>> MY COMMENT IS MAYBE A LITTLE BIT BROADER. OBVIOUSLY NOT A PIPELINE. SO THE SPECIFIC REQUIREMENT DOESN'T APPLY. AT THE SAME TIME, IF YOU LOOK AT THE CONTEXT OF THE THRESHOLDS, MY QUESTION IS, IS THIS SOMETHING THAT SHOULD MAYBE BE REVISITED IN LIGHT OF WHAT THRESHOLD  MAYBE NOT THRESHOLDS BUT TRIGGERS SHOULD BE FOR ALL THESE PRICING LOCATIONS, AS USERS AND CONSUMERS MUCH THESE INDICES, WE LOOK TO THEM, FERC BASICALLY REGULATES AND HAVE OVERSIGHT OVER THESE INDICES, SO THERE'S A GENERAL EXPECTATION THAT YOU HAVE SOME OVERSIGHT OVER THAT WHOLE PROCESS. SO MAYBE WE NEED RATHER THAN THESE VERY POINTED SOLUTIONS JUST FOR PIPELINES OR ISOs THERE'S SOMETHING WHERE THERE'S A BROADER  SOME TRIGGER LEVEL, IF AN INDEX ISN'T  DOESN'T GET USED ENOUGH OR TRADED ENOUGH, THAT FOR A CERTAIN PERIOD OF TIME THERE'S AN ANALYSIS THAT NEEDS TO BE DONE AND PRESENTED BACK TO STAFF AND THE INDUSTRY BY THE RELEVANT PRA. GET MORE ROBUST INDICES OVERALL AND MAYBE THE PIPELINES DON'T HAVE TO BE BURDENED WITH THEIR SPECIFIC REQUIREMENTS TO TRACK HOW MANY TRADES WERE REPORTED TO A SPECIFIC INDEX THEY MIGHT BE PRICING AGAINST.

>> THANK YOU. GREGG?

>> WE HAVE PROVISIONS IN TARIFFS THAT REFERENCE INDICES, AND WE REEVALUATE WHETHER WE NEED TO USE THESE INDICES LIKE THEY SAID OVER TIME. WE ACTUALLY JUST CAME ACROSS THIS IN THE LAST YEARANDAHALF, WHEN ICE PUT OUT A NEW PRODUCT, CREATED ALGONQUIN INDEX, A SHIFT FROM CITY GATE TO ALGONQUIN NONG, AND THIS ALGONQUIN CITY GATE PRICE REFERENCED IN TARIFF IS NO LONGER APPLICABLE AND WASN'T SETTING THRESHOLD APPROPRIATELY. WE DO EVALUATE OVER TIME ONCE WE NOTICE A SHIFT IN TRADING.

>> THANK YOU. SUSAN?

>> I JUST WANTED TO SAY ON THIS ONE THAT PRIOR TO THE SUPPLEMENTAL NOTICE OF TECHNICAL CONFERENCE AGA HAD NOT HEARD FROM ANY MEMBERS EXPRESSING CONCERNS ABOUT THE INDICES LOOKED AT, INDICES THAT WERE PUT IN TARIFFS. AFTER THE NOTICE WE SURVEYED MEMBERS ON THIS ITEM AND WE ALSO DIDN'T GET ANY CONCERNS EXPRESSED, IN PARTICULAR ON THIS ISSUE. THE NUMBERS DO BELIEVE AS SHIPPERS ON SYSTEMS EITHER IF THEY DO SEE A PROBLEM, AT ONE OF THE POINTS THAT IS REFERENCED IN THE TARIFF, THEY CAN EITHER RAISE WITH THE PIPELINE, THE PIPELINE CAN SELF IDENTIFY, RAISE WITH SHIPPERS, AND OUR EXPECTATION WOULD BE AS LEE SAID WE WOULD WORK TOGETHER WITH THE PIPELINE TO DISCUSS IF THERE IS AN ISSUE AND DETERMINE WHAT OTHER  WHAT WOULD BE A BETTER POINT TO USE AND WHAT TARIFF CHANGES MIGHT BE NECESSARY.

>> THANK YOU. GEORGE?

>> I WANTED TO QUICKLY QUALIFY MY STATEMENT ABOUT  I'M REPRESENTING ALL OF KINDER MORGAN TODAY, SPEAKING SPECIFICALLY ABOUT OUR PROCESS THAT WAS REALLY REFERRING TO WEST REGION, OBVIOUSLY WE HAVE MIDSTREAM BUSINESS, TERMINAL BUSINESS, TANKER BUSINESS, OTHER THINGS. I WASN'T REFERRING TO THEIR PROCESS AS FAR AS TRACKING THESE INDICES. I KNOW IN THE WEST REGION WE HAVE IT WELL AUTOMATED TO ASSESS THOSE AND AS I SAID ASSESS THOSE PERIODICALLY. AND I SAY ANECDOTALLY ALSO PROBABLY THE SAME VEIN FORWARD MARKET POINTS, MORE IN FORWARD MARKET POINTS AND LIQUIDITY AND RELIABILITY. HOW FAR OUT, YOU KNOW, ON THE CURVE DO YOU GO TO GET COMFORTABLE THAT IT'S REPRESENTATIVE? WE LOOK AT THAT ANECDOTALLY ALSO.

>> SOUNDS LIKE THERE'S NOT A WIDESPREAD CONCERN. ARE THERE SPECIFIC CONCERNS YOU HAVE TO GO BACK SEVERAL YEARS TO SAY DURING POLAR VORTEXTYPE COMPANIES, OFTEN WHEN WE REACH OUT TO THE MARKET THEN MARKETERS WILL POINT TO THE CRITICAL DAY PROVISIONS AND MULTIPLES OF GAS DAILY FINES AS TO WHY THEY ARE BUYING SO FRANTICALLY. I DON'T KNOW IF YOU HAVE CONCERNS FOR THE MARKETPLACE THEN ABOUT PARTICULAR INDICES WITH REGARDS TO PENALTIES? CASHOUT PENALTIES DURING CRITICAL DAYS?

>> I HAVEN'T. I'M NOT AS FAMILIAR WITH THE POLAR VORTEX, BUT OTHER MARKET EVENTS, PARTICULARLY OUT WEST, THAT HAVE BEEN IMPACTED, PRICES. WE HAVEN'T SEEN AN OUTRIGHT ISSUE.

>> LEE?

>> I GUESS WHAT I WOULD SAY IS AS FAR AS THE POLAR VORTEX AND ALL OF THAT, THAT'S THE REASON WE NEED THE INDICES IN THERE. WE NEED THEM REFLECTING THE CORRECT PRICES BECAUSE THAT'S WHAT'S GOING TO PROVIDE THE CORRECT MARKET SIGNAL IS THAT AS WELL AS CHARGES ABOVE THAT NUMBER. THAT NUMBER DOESN'T PROVIDE THE CORRECT INCENTIVE, ON THE COLDEST DAY OF THE YEAR WE MAY HAVE PEOPLE PEOPLE NOT FROM OUR SYSTEM PULLING GAS OFF OUR SYSTEM AND CAUSING PROBLEMS. SO WE DO NEED TO BE ACCURATE. THAT SAID I BELIEVE THAT THEY ARE. WHILE I'VE GOT THE FLOOR ONE OTHER THING I WANTED TO BRING YOU THE, IT'S ABOUT WHAT WE WERE TALKING ABOUT, IS THAT PIPELINES HAVE AN INCENTIVE FOR THE INDEXES TO BE PRICED INCORRECTLY BECAUSE OUR SERVICE  OUR CUSTOMERS ARE BASING WHAT THEY ARE DOING BASED UPON THOSE INDEXES, OR INDICES. AND THERE ARE TIMES WHERE WHEN NEW CONSTRAINTS COME INTO PLAY PRICING POINTS, EVEN THOUGH THEY ARE STATING WHAT THE VALUE IS IN A GIVEN POINT, AT A GIVEN POINT, IT'S NOT NECESSARY REFLECTIVE OF ALL THE AREA THAT IS CURRENTLY TRADING AT THAT POINT. AND THE EXAMPLE THAT I'LL GIVE YOU IS ON TECO SYSTEM WHERE WAS THE TECO POOL, AND PRIOR TO ALL OF THE INCREASE IN MARCELLUS PRODUCTION THERE WASN'T A PROBLEM BECAUSE GAS COMING ACROSS TO MAKE IT TO THE TECO POOL OR THE GASES BEING PRODUCED. ONCE THERE BECAME A CONSTRAINT TECO COULD NO LONGER MOVE ALL THAT GAS TO THE POOL, THE GAS IN THE PRODUCTION AREA ACTUALLY HAD DOWNWARD PRESSURE ON IT BECAUSE IT COULDN'T ALL GET OUT. AND SO IT WAS ACTUALLY TRADING AT A LOWER PRICE THAN THE TECO POOL. AND WHAT TECO DID AT THAT POINT IN TIME IS WENT TO PLATTS, EXPLAINED THE SITUATION, AND WORKED WITH PLATTS TO GET THE TECO NONIPP POINT PUT IN PLACE. SO THAT'S NOT A QUESTION OF ILLIQUIDY, JUST A QUESTION OF THE PRICE WASN'T REFLECTIVE OF THE MARKET. AND BUT PIPELINES DO HAVE INCENTIVE TO KEEP AN EYE ON THESE THINGS AND MAKE CHANGES AS NECESSARY.

>> THANKS. THAT'S A GOOD ANSWER. WAS IT A DIFFICULT PROCESS TO GET THE DIFFERENTIATION AT THE TECO POOL WITH PLATTS?

>> I WASN'T FIRSTHAND INVOLVED, BUT THE PEOPLE THAT I WAS SPEAKING WITH, IT DID NOT SOUND LIKE IT WAS A DIFFICULT PROCESS, THAT WE NEEDED TO EXPLAIN THE SITUATION, AND THAT PLATTS WORKED WITH US TO DEVELOP THE NEW POINT.

>> I THINK I SPOKE TO THIS WITH REGARDS TO CHANGING ICE POINTS, WE WENT THROUGH A ALSO PROCESS TO NEGOTIATE WHETHER WE FELT LIKE THAT SHOULD BE ADDED OR NOT SO THE PROCESS WAS THERE BUT I HOPE GOING FORWARD WE CONTINUE TO HAVE OPEN DIALOGUE AND PROCESS AND MAKE THAT TRANSPARENT WHEN THOSE CHANGES OCCUR.

>> THANK YOU.

>> I'LL BE THE LAST QUESTION. THIS MORNING WE SPOKE ABOUT HEDGING AND RISK MANAGEMENT GIVEN CHANGES IN TRADED VOLUMES AND FUTURES PRODUCTS, AND I WAS WONDERING HOW CURRENT MARKET TRENDS EITHER AT INDEX REPORTING OR IN THE FINANCIAL SIDE HAVE CHANGED YOUR HEDGING STRATEGIES, IF THAT'S HAPPENED, IF YOU COULD SPEAK TO HOW THAT IMPOSED POTENTIAL COST ON YOUR BUSINESSES, IF ANYONE WANTS TO ANSWER THAT QUESTION.

>>

>> I'M NOT CERTAIN THIS IS WHAT YOU'RE LOOKING FOR. I THINK OF INDEX, I'M THINKING ABOUT TODAY. WHAT'S HAPPENING TODAY, WHAT HAPPENED YESTERDAY, ET CETERA. VERSUS LOOKING FORWARD. SOMEBODY BROUGHT UP THE FACT AS YOU GET FURTHER OUT IN TIME IT BECOMES MORE AND MORE AND MORE ILLIQUID. IF THAT'S WHAT YOU'RE GETTING AT I CAN EXPLAIN HOW IT IMPACTS OUR BUSINESS AT LEAST FROM THE STORAGE SIDE OF THINGS.

>> SURE.

>> THAT IS WHEN YOU'RE WORKING WITH OUR CUSTOMERS ON WHAT THE VALUE OF THAT STORAGE IS THERE'S SEVERAL THINGS THAT COME INTO PLAY ON THAT, ONE IS THE BIDASK SPREAD AND THE FURTHER IN TIME, THE WIDE ARE THAT BIDASK SPREAD IS GOING TO BE, IT WELCOMES MORE ILLIQUID, COMING RIGHT OFF THE VALUE. IN ADDITION TO THAT MANY CUSTOMERS WANT TO BE ABLE TO HEDGE OFF THEIR RISK, AND SO WHEN THEY ARE WORKING WITH US INSTEAD OF BEING ABLE TO DO A THREEYEAR CONTRACT WITH US, NOW WE'RE STARTING TO SEE SHORTERTERM CONTRACTS BECAUSE THEY DON'T HAVE THE ABILITY TO HEDGE OFF THE LONGER TERMS. SO THAT'S IMPACTING US, IF YOU LOOK AT IT FROM A COST IMPACT, IT'S SHORTER TERM CONTRACTS, AND IF THEY GO LONGER TERM IT'S REDUCED RATES. IS THAT THE DOOR YOU WERE LOOKING FOR?

>> JUST TO FOLLOW UP WITH THE GENTLEMAN FROM TRANSCANADA WITH WITH REGARD TO FOR WORD MARKET AND STORAGE, I AGREE, BUT AS WE'RE GOING FORWARD, PARTICULARLY WHEN YOU LOOK OUT WEST, OBVIOUSLY RENEWABLE TRENDS, RPS STANDARDS ARE GOING, STORIES ARE IMPORTANT TO BACKSTOPPING RENEWABLES, WHETHER IT'S BELOW GROUND STORAGE LIKE TRADITIONAL STORAGE, OR RESERVOIR OR AQUIFER, BUT HORIZONTAL STORAGE, A LOT OF UNUTILIZED PIPELINE CAPACITY WOULD HAVE STORAGE VALUE, PAL SURFACE, EVERY ONE OF OUR PIPES OUT WEST IN PARTICULAR OUT WEST, PROBABLY IN A LOT OF OTHER PIPES THAT HAVE SLACK CAPACITY, WE HAVE INTERRUPTIBLE STORAGE PAL SERVICE, SO AGAIN IN THE FACE OF GROWING RENEWABLES, THAT NEED IS EVER GROWING, AND EVERY POINT THAT THE PERSON TRANSCANADA MADE IS SPOT ON IN IMPORTANCE.

>> I THINK YOUR QUESTION WAS VERY BROAD. I'M GOING TO GIVE YOU A VERY BROAD ANSWER. THE INDICES DON'T NECESSARILY AFFECT THE WAY WE HEDGE PRODUCTS THAT WE USED TO HEDGE. MOST OF OUR EXPOSURE IS RELATIVELY SHORT TERM IN NATURE, LESS THAN MONTHS, MORE SO THAN THE THREE OR SIXYEAR STRIPS WHICH AT THE END DAY HAVE NO IMPACT ON WHAT WE'RE TALKING ABOUT TODAY IN TERMS OF PRICE FORMATION. A LOT OF THOSE THINGS HAVE MORE TO DO WITH BAZEL AND THE NOPR THAT WAS RELEASED BY THE FED HERE ABOUT COUNTERPARTIES THAT ARE INVOLVED IN THE FINANCIAL BUSINESS, SO FROM A BROAD QUESTION, IT'S A BROAD ANSWER. I WANT TO CLARIFY MY COMMENTS ABOUT SAFE HARBOR. WE SPEND A LOT OF TIME AND EFFORT, A LOT OF MONEY MAKING SURE THAT WHEN WE DO REPORT, THAT WE DO COMPLY WITH THE SAFE HARBOR. I THINK IT'S MORE OF A PERCEPTION, AND I HOPE THAT'S WHAT YOU KIND OF SAW FROM MY PREVIOUS RESPONSE, THAT IT IS A PERCEPTION OF WHY PEOPLE DON'T NECESSARILY GIVE THEIR DATA TO THE PRICE REPORTING AGENCIES. SO I JUST WANTED  I'M HAPPY TO ANSWER MORE QUESTIONS IF YOU WANT TO GET MORE SPECIFIC BUT FROM A BROAD ANSWER, I DON'T THINK THAT ANY OF OUR HEDGING ACTIVITY, FINANCIAL HEDGING ACTIVITY, IS IN ANY WAY COMPROMISED, WHERE WE DOUBT ANYTHING WE DO BECAUSE OF THE INDICES.

>> (INDISCERNIBLE) I WOULD LIKE TO REITERATE SOME THINGS THAT ORLANDO ALVAREZ MENTIONED THIS MORNING WHICH DRIVES YOUR QUESTION WHICH IS IS THERE A DECREASE IN LIQUIDITY AND LONGTERM FINANCIAL PRODUCTS. IT SEEMS THERE IS. I DON'T KNOW WHAT THE SOLUTION IS. IT'S CLEARLY DRIVEN BY DECREASE IN VOLATILITY, SENSE OF HIGHER CONFIDENCE IN PRICES, DODDFRANK, OTHER THINGS, DRIVING PEOPLE OUT OF THE MARKET, WE'VE TALKED IN THE PAST ABOUT LOTS OF BANKS LEAVING. I WOULD SAY IT IS IMPORTANT, IT'S IMPORTANT IN TERMS OF DEMAND. SO, YOU KNOW, IF PEOPLE CAN'T ACTUALLY GET THE LONGTERM HEDGES THEY NEED IN ORDER TO MAKE INVESTMENTS ON THE DEMAND SIDE, TO GUARANTEE THAT PRICE TO ACTUALLY LOCK DOWN THEIR RETURNS, THAT'S AN ISSUE. SO WE LIKE TO HIGHLIGHT THAT, TRANSLATE WHAT I THINK ORLANDO WAS SAYING THIS MORNING INTO A REAL MARKET ISSUE, WHICH IS IF WE CAN SOLVE THAT WE CAN BRING BACK LIQUIDITY AND LONG TERM FINANCIAL PRODUCTS, MORE LIKELY TO GET PEOPLE PUTTING STEEL IN THE GROUND TO BURN GAS AND MAKE STUFF. WHICH I THINK IS A BENEFIT TO THE MARKET.

>> MAYBE JUST TO ADD ON TO THAT SO THERE IS ONE AREA WHERE I THINK THERE IS SOME OVERLAP BETWEEN WHEN WE TALK ABOUT LONGTERM LIQUIDITY, IN THE FINANCIAL MARKETS, AND WHAT WE'RE TALKING ABOUT HERE WITH REPORTING. AND THAT'S GOING BACK TO THOSE PARTICIPANTS THAT LEFT THE MARKET AND ARE HOPING WILL AT SOME POINT RETURN. I ABSOLUTELY AGREE INDICES DON'T HAVE A DIRECT IMPACT ON HOW PEOPLE HEDGE AND BOTH HOW WE HEDGE OUR OWN EXPOSURES AS WELL AS RISK MANAGEMENT PRODUCTS WE CAN PROVIDE TO OUR CUSTOMERS, BUT IT DOES  HAVING FEWER PARTICIPANTS THAT CAN PARTICIPATE IN THE INTEGRAL WAY, PHYSICAL AND FINANCIAL MARKETS, TAKES OUT LIQUIDITY IN THE PHYSICAL SPACE BUT ALSO IN THE FINANCIAL MARKET BECAUSE THOSE SAME PLAYERS WERE SAYING SOME PEOPLE WHO HAD A LOT OF OPEN INTEREST IN THE OUT MONTHS. IT IS AN IMPORTANT PROBLEM WE HAVE TO SOLVE ALL AROUND.

>> ANYONE ELSE HAVE ANYTHING? NO? OKAY.

>> COULD I JUST SAY, ONE OF THE BENEFITS OF GOING ON THE SECOND PANEL YOU GET TO HEAR WHAT WAS SAID ON THE FIRST PANEL, AND PASS COMMENTS ON THINGS YOU LIKED AND THINGS YOU DIDN'T. THREE THINGS I WANT TO BRIEFLY MENTION, ONE WAS AN IDEA I DIDN'T LIKE, ONE WAS A GREAT IDEA, ONE I THOUGHT REQUIRED A BIT MORE CLARIFICATION. THE FIRST ONE, I WON'T CALL HIM OUT BY NAME, I APOLOGIZE AFTERWARDS, SOMEONE MENTIONED IDEA OF MANDATED CERTAIN AMOUNT OF PERCENTAGE OF FIXED PRICES FOR CUSTOMERS, SHOULD BE URGING UTILITIES OR EVEN FORCING UTILITIES TO DO CERTAIN PERCENTAGE OF PURCHASES ON FIXED PRICES. COREY LIKES TO BUY GAS THE WAY SELLERS LIKE TO SELL. MEMBERS LIKE TO BUY. THE MARKET FUNCTIONS WHEN YOU LET BUYERS AND SELLERS AGREE, ANYTHING WHICH MANDATES ANYBODY TO BE DRIVEN DOWN A CERTAIN PATH CAN BE VERY DAMAGING TO THE MARKETS, I WOULD URGE YOU TO DISREGARD THAT RECOMMENDATION. THERE WAS ONE HOWEVER MADE WHICH WAS VERY POSITIVE THAT TALKED ABOUT FERC INVESTIGATIONS AND PROCESS AND TALKED ABOUT AMOUNT OF HISTORICAL DATA THAT IS LOOKED AT IN THOSE, SO GOING BACK INTO THE DEEP DARK RECESSES OF HISTORY AND PEOPLE'S MINDS, PEOPLE FIND IT DIFFICULT TO EXPLAIN. THE OTHER ONE SCOPE BEING RELATIVELY ILL DEFINED AT THE BEGINNING, AND THEN SCOPE CREEP OVER TIME, AND THEN I THINK THE THIRD IS JUST THE DURATION OF SOME OF THOSE, THEY CAN BE VERY ONEROUS ON THE ORGANIZATIONS THAT HAVE TO UNDERGO THEM AND I THINK IT'S PART OF THAT REGULATORY RISK WHICH WE NEED TO MINIMIZE IF YOU WANT TO INCENTIVIZE PEOPLE TO REPORT PRICES. THE THIRD IS THE ICE AND PLATTSS, THE INDUSTRY IF WE CAN HAVE MORE FIXED PRICE TRANSACTIONS BEING FED FROM ICE AND PLATTS INDICES, IT'S ALREADY BEEN MENTIONED, WE NEED TO MAKE SURE THERE ARE NO UNINTENDED CONSEQUENCES THERE, THE LIABILITY OF INADVERTENT DOESN'T GET PASSED DOWN, WE NEED TO THINK THAT THROUGH AND MAKE SURE NO LIABILITY IS INCREASED ON PEOPLE WORKING THROUGH US. THANK YOU.

>> I'D LIKE TO THANK YOU FOR BEING ON THE PANEL AND PARTICIPATING. OUR NEXT PANEL IS NOT SET TO BEGIN UNTIL 3:25. WE FINISHED A BIT EARLY. OH, 3:45? OH. PERHAPS WE COULD START THIS NEXT PANEL EARLIER, WOULD THAT BE OKAY WITH EVERYBODY? OKAY, GREAT. WE CAN GET OUT EARLIER. HOW ABOUT WE RECONVENE IN 15 MINUTES, AT 3:15. THANK YOU. (RECESS) ... ....

>> ALL RIGHT, IF FOLKS COULD START RETURNING TO THEIR SEATS. THANK YOU FOR COMING BACK FOR THE THIRD PANEL. THE THIRD PANEL IS ABOUT POTENTIAL OPTIONS TO INCREASE INDEX REPORTING AND LIQUIDITY AND TRANSPARENCY IN NATURAL GAS INDICES. I'LL ASK THE PANELISTS TO BEGIN BY INTRODUCING THEMSELVES, STARTING WITH COREY.

>> COREY GRINDAL, CHENIERE ENERGY.

>> JOE BOWRING, MARKET MONITOR.

>> MARK CALLAHAN WITH PLATTS, EDITORIAL DIRECTOR ARE RESPONSIBILITY FOR NATURAL GAS PRICE ASSESSMENTS.

>> I BROKE IT. DREW FOSSUM, TENASKA INCORPORATE.

>> JOAN DRESKIN, ENTER NATURE NATURAL GAS ASSOCIATION.

>> TOM HAYWOOD WITH ENERGY INTELLIGENCE, HOUSTON BUREAU CHIEF.

>> ORLANDO ALVAREZ PRESIDENT AND CEO OF BP ENERGY.

>> (INAUDIBLE).

>> VINCE KAMINSKI RICE UNIVERSITY.

>> KURT MOVE IT, KINDER MORGAN, CHIEF COUNSEL. GOOD AFTERNOON, J.C. KNEALE, VICE PRESIDENT NORTH AMERICAN NATURAL GAS AND ELECTRICITY, INTERCONTINENTAL EXCHANGE.

>> THANK YOU.

>> I'M GOING TO ASK YOU TO TALK ABOUT SPECIFIC THINGS WE COULD DO AS A COMMISSION OR INDUSTRYWIDE TO INCREASE EITHER THE TRANSPARENCY REPORTING OR LIQUIDITY AT NATURAL GAS HUBS IN THE UNITED STATES. SO COREY, IF YOU WOULD LIKE TO START OUT.

>> I THINK AS I MENTIONED EARLIER ONE OF THE THINGS THAT COULD BE DONE TO IMPROVE MORE TRANSPARENCY, MORE VOLUME, IS THAT I THINK THERE SHOULD BE A THRESHOLD AFTER SOME THRESHOLD SHOULD BE ENCOURAGED THOSE PARTIES SHOULD VOLUNTARILY REPORT.

>> THANK YOU, COREY. JOE?

>> I WAS SOMEWHAT SURPRISED AT THE ALMOST UNANIMOUS SUPPORT AND CONFIDENCE IN INDUSTRY GIVEN A VERY SMALL PROPORTION OF TRANSACTIONS ARE REPORTED, AS FAR AS I CAN TELL, MAYBE THE PROFESSOR AT THE END HAS DONE A STUDY OF THE RELIABILITY, BUT AS FAR AS I CAN TELL NO EMPIRICAL EVIDENCE INDICES DO REPRESENT. MAYBE YOU CAN CORRECT ME AS WELL, FROM PLATTS. SO STARTING THERE, ACTUALLY DOING SOME EVIDENCEBASED, TAKE A DAY, A COUPLE MONTHS, LIKE AT HIGH DEMAND DAYS AND LOW DEMAND DAYS AND GET A SAMPLE OF ALL TRANSACTIONS ON THOSE DAYS AND ATTEMPT TO SEE WHETHER IT REALLY HAS A STATISTICALLY SAMPLE OF DATA WITH WHETHER IT'S BIASED, I DON'T HAVE A REASON TO BELIEVE EITHER WAY SO STARTING THERE I THINK WOULD BE A GOOD IDEA.

>> SO IN RESPONSE TO YOUR QUESTION ABOUT INCREASING LIQUIDITY AND TRANSPARENCY, I VIEW SOLUTIONS FROM TOA, ONE WORE THE PRA SOLUTION, WHAT CAN PLATTS DO TO INCREASE TRANSPARENCY. I MENTIONED THE AGREEMENTS WE SIGNED WITH ICE, MORE TRANSACTION ON INDICES, PRODUCING ADDITIONAL PRICE ASSESSMENTS TO PROVIDE MORE TRANSPARENCY TO THE MARKET, IN THE FORM OF PRELIMINARY DAILY INDICES, EARLIER IN THE DAY AS WELL AS BID WEEK INDICES DURING BID WEEK. SO THAT'S ONE COMPONENT. THE OTHER WOULD BE THE MARKET TYPE SOLUTION WHICH COREY MENTIONED HOW DO WE GET MORE PEOPLE, WE NEED MORE PARTICIPATION IN THE INDICES. WE'VE TALKED ABOUT SOME OF THOSE THEMES EARLIER THIS MORNING IN TERMS OF WAYS WE CAN MAKE MODIFICATIONS EITHER FOR POLICY STATEMENT OR JUST ENCOURAGE THOSE LARGER PLAYERS WHO ARE NOT PRICE REPORTERS TO PARTICIPATE IN THE INTERNATIONAL SEES.

>> DREW FOSSUM, TENASKA. WE BUILD AND OPERATE POWER PLANTS, TRADE POWER AND NATURAL GAS. OUR NATURAL GAS TRADING BUSINESS, TENASKA MARKETING VENTURES, HAS BEEN TOP TEN BY VOLUME MARKETER PRIMARILY WITH PHYSICAL MARKET FOR YEARS AND YEARS, NOW I THINK THIRD IN THE MOST RECENT PLATTS QUARTERLY SURVEY, WE'RE A LARGE GAS MARKETING COMPANY AND INTEGRATED ENERGY COMPANY. THAT'S IMPORTANT CONTEXT BECAUSE WE'RE SORT OF ON BOTH SIDES OF THIS ISSUE. WE TRADE A LOT OF INDEX PRICE GAS, TO THAT EXTENT WE'RE A CONSUMER OF PRICE INDICES, VULNERABLE TO THEM IF THEY ARE SUSPECT OR NOT ACCURATELY REFLECTING THE MARKET BUT WE'RE ALSO A PRICE DISCLOSURE TO THE AGENCY SO WE HAVE BEEN FOR YEARS AND YEARS, EVEN BEFORE THE POLICY STATEMENT. WE INTEND TO CONTINUE DOING THAT. SO I SECOND MARK'S AND OTHER COMMENTS TODAY. WE COULD ABSOLUTELY ENCOURAGE COMPANIES NOT CURRENTLY PRICE REPORTING TO LOOK REALLY HARD AT THE COSTBENEFIT RATIO AND HOPEFULLY WITH WHATEVER GREAT IDEAS COME OUT OF THIS CONFERENCE, COSTBENEFIT PERCEPTION WILL IMPROVE AND MORE FOLKS WILL STEP UP AND START REPORTING. IT'S WONDERFUL TO HEAR COREY'S COMPANY IS GOING TO START REPORTING. IN TERMS OF SPECIFIC ANSWERS TO THE QUESTION THAT WE HEARD ONE THING I THINK IS A REALLY GOOD POINT, PERCEIVED REGULATORY RISK NEEDS TO BE ADDRESSED. THE COMMISSION IS IN THE UNIQUE POSITION TO DO SOMETHING ABOUT THAT. I'M NOT SURE THERE'S ACTUAL REGULATORY RISK AS MUCH AS PERCEIVED REGULATORY RISK. I THINK REUPPING THE SAFE HARBOR, MODERNIZING IT TO FIT THE CIRCUMSTANCES WE HAVE NOW WITH A LOT OF DATA PULLING FROM THE TRANSACTING COMPANIES THROUGH THE CLEARINGHOUSE INTO THE PUBLISHER'S HANDS, SOME TWEAKS WITH MAKE THAT ACCURATELY REFLECT THE WORK. IT'S RELATIVELY OLD, A TESTAMENT TO HOW WELL IT WAS PUT TOGETHER IN THE FIRST PLACE BUT REUPPING AND MAKING IT MORE DURABLE, PUT IT IN THE REGS. PERCEPTION MATTERS. THAT WOULD INDICATE COMMITMENT AND MAKE IT DURABLE, THERE'S SOME VALUE IN THAT. IN TERMS OF OTHER IDEAS, I'LL THROW ONE OUT THAT'S ONE OF OUR REASON THAT RELATES TO AUDIT PROCESS. WE HEARD COMMENTS ABOUT THE FERC AUDIT PROCESS. EACH AUDIT INCLUDING THE ONE OF OUR COMPANY THAT ENDED TWO YEARS AGO BEGAN AS AUDIT OF THE FORM 552 FILINGS, AND WE ALL MAKE THOSE. ADDITIONAL COMPONENT RELATED TO PRICE REPORTING IS A BOLTON. DOESN'T MAKE IT MORE BURDEN SOME OR LAST LONGER BUT I WOULD SECOND THE COMMENTS OTHERS MADE ABOUT THE NEED TO LEVELLIZE THOSE BURDENS, OR LEVELIZE THE PERCEIVED BURDENS AND LEVELLIZED ACROSS REPORTING AND NONREPORTING COMPANIES. IF YOU LEAVE A PERCEPTION OUT THERE, THE INDUSTRY THE BURDENS ARE HIGHER FOR PRICE REPORTERS THAN FOR THE NONREPORTERS, YOU GOT A PROBLEM. AND I THINK AGAIN ANY GOOD IDEAS FROM THE PANELS, ANY GOOD IDEAS FROM THE PEOPLE THAT FILE WRITTEN COMMENTS SHOULD BE LOOKED AT HARD BY THE COMMISSION AND VERY HARD ABOUT WAYS TO CORRECT THOSE PERCEPTIONS.

>> TERRIFIC. THANKS FOR THOSE COMMENTS. ONE OF THE THINGS WE HEARD EARLIER WAS DIFFERENCE BETWEEN LIQUIDITY AND REPORTING TO PRA. IN TERMS OF WHAT FERC CAN DO TO ENCOURAGE PEOPLE TO SELL OR BUY IN THE MARKETPLACE I'M NOT THERE IS ANYTHING. YOU CAN VOLUNTARILY ENCOURAGE PEOPLE TO REPORT, GIVE THEM THE COMFORT LEVEL TO REPORT THAT THERE IS  THERE ARE FAIL RULES HERE, REPORTS ABOUT THOSE AUDITS. FERC HAS AN ENFORCEMENT REPORT ANNUALLY THAT IT PUTS OUT THAT PROVIDES A LOT OF DATA FOR MARKET PARTICIPANTS, THAT GIVES US INSIGHT INTO HOW YOU REVIEW THINGS, HOW YOU REVIEW MARKET MANIPULATION, REVIEW  THOSE ARE THE KIND OF THINGS THAT WILL PROVIDE PEOPLE WITH SOME ASSURANCE, BUT REMEMBER, UNLIKE THE REGULATED ENTITIES LIKE THE PIPE WE'RE USED TO FERC OTHERS WITHIN THE MARKETPLACE OR NOT, FERC REGULATED, SO DO YOU HAVE LIMITATIONS ON YOUR JURISDICTIONS AND THEY ARE NOT AS COMFORTABLE WITH SOME OF FERC'S PROCESSES. YOU HAVE TO RECOGNIZE THAT AND TRY TO PROVIDE THOSE ASSURANCES.

>> TOM HAYWOOD, ENERGY INTELLIGENCE. I THINK I MADE MY VIEW THIS MORNING, I TALKED ABOUT THE SAFE HARBOR, SO I'M NOT GOING TO BORE YOU. I'LL JUST REPEAT THAT I THINK THERE ARE TWO THINGS WE COULD DO. I THINK IT WOULD BE  I WOULD SAY THAT, YOU KNOW, THE FERC COULD REVISE THE SAFE HARBOR, IN A REASONABLE WAY, TO ENCOURAGE VOLUNTARY PRICE SUBMISSIONS, TO ALL OF THE, YOU KNOW, TO THE MAJOR INDICES THAT MEET THE FERC STANDARDS. AND IN DOING SO THOUGH I THINK THERE'S GOOD REASON THAT TO DO THAT BECAUSE IF YOU WANT, THERE'S A REASON FOR WANTING A ROBUST PRICE DISCOVERY SYSTEM OUT THERE, AND CHOICES IN THE SYSTEM, BECAUSE IT HELPS KEEP PRICES REASONABLE FOR EVERYONE, YOU KNOW, IF YOU HAVE  YOU COULD END UP WITH A SITUATION WHERE YOU HAVE JUST ONE CHOICE, OR JUST TWO, AND THEN THAT WOULDN'T BE A HEALTHY THING FOR SOMEONE TO LOOK AT. I'M JUST SAYING THAT THE MORE CHOICE THE CONSUMERS HAVE OUT THERE, THE FIRMS HAVE OUT THERE, THERE'S A LOT OF REASONS TO USE PRICE INFORMATION, THE BETTER. AND I MEAN JUST FOR THE HEALTH OF THE INDUSTRY. SO I WOULD JUST SAY THAT I WOULD SAY I WOULD START WITH LOOKING AT THE SAFE HARBOR, I'D LOOK AT THE REGULATORY THINGS, TAKE A LOT OF THESE ISSUES TO HEART AND KIND OF GO FROM THERE. THANK YOU.

>> ORLANDO ALVAREZ WITH BP. SO TWO THINGS THAT COME TO MIND FOR ME. ONE IS IF YOU THINK ABOUT THE CURRENT STATE AS WE'RE IN TODAY, AGAIN I'M GOING TO PARK THE PLATTE ICE WHICH I THINK WE'RE GOING IN THE RIGHT DIRECTION WITH THAT. BUT IF YOU  WE TOUCHED ON IN PANEL 1, IF YOU HAVE A LOCATION WHERE YOU HAVE 20 A DAY BEING TRADED, TWO CONTRACTS A DAY, 20,000 MMBTUs PER DAY, THEN IS THERE SOMETHING ELSE THAT THE PRAs CAN DO TO GATHER MORE INFORMATION, ASSESS IT, SAY THIS VOLUME IS LOW, WE NEED TO DO SOMETHING HERE, SOME KIND OF  SOME DISCRETION OR JUDGMENT PERFORMED BY THE PRAs, SO IT WOULD BE ONE COUNTERPART, 20 A DAY, IT MIGHT BE ONE PERSON. I DON'T THINK WE DO THAT TODAY, TO THAT LEVEL. THE SECOND THING, I MENTIONED IN PANEL 1, WHICH AGAIN I'M NOT GOING TO MENTION BEFORE, MANDATORY, THAT WE MANDATE EVERYONE TO PRICE REPORT, BUT I DO BELIEVE GOING BACK TO THE DATA THAT I PRESENTED IN PANEL 1, THE TOP TEN MOVERS ACCORDING TO THE PLATTS DATA, THE TOP TEN MOVERS IN 16, NINE DO NOT REPORT. OF THOSE NINE, EIGHT ARE MARKETING COMPANIES THAT BUY FOR THE PURPOSE OF RESELLING. SO IF YOU MANDATED THAT THOSE MARKETING COMPANIES THAT YOU BUY FOR RESALE, YOU MUST REPORT, THAT WOULD BE CHANGE. I WOULD ALSO  ON PANEL 2 WE DISCUSSED INTRASTATE PIPELINES IN THERE THAT HAVE MARKETING COMPANIES THAT DO BUY FOR RESALE TO CUSTOMERS, INDUSTRIAL CUSTOMERS, ET CETERA, AND DON'T REPORT. SO THOSE ARE MARKETING AFFILIATES OF PIPELINES, AND THAT MAYBE DON'T EXIST ON THIS LIST AS WELL. AGAIN, PRODUCERS, WE TALKED ABOUT INDEPENDENT PRODUCERS, THEY DON'T HAVE THE BACK OFFICE, SUPPORT. WE TALKED ABOUT UTILITIES USING INDEX, PARKING THOSE, I'M TALKING ABOUT THE MARKETING COMPANIES THAT ARE IN THE BUSINESS OF BUYING FOR RESELLING LIKE A BP ENERGY THAT PRICE REPORTS, A MATERIAL MAJOR PRICE REPORTER. THOSE ARE MY TWO RECOMMENDATIONS.

>> GREG LEONARD AGAIN. THE VIEWS I'M TALKING TODAY ARE MY VIEWS AND NOT THAT OF CORNERSTONE. I'M GOING TO LET SOME FOLKS ACTUALLY IN THE MARKET AND COMPANIES DIRECTLY IN THE MARKETS SPEAK TO WHAT WOULD DIRECTLY INCREASE THE AMOUNT MUCH PRICE REPORTING I WANT TO RESPOND TO THE NOTION THAT THERE'S NOT EMPIRICAL EVIDENCE THAT THE INDICES ARE ACCURATE. AND ACTUALLY TO SAY ONE OF THE MOST SALIENT POWERFUL FACTS THAT WE'VE HEARD TODAY IS ABOUT THE INCREASE IN INDEX PRICE GAS OVER THE LAST NIGHTINE, SEEN IN THE 552 DATA, INCREASED ALMOST EVERY YEAR FOR NINE YEARS, EVEN WHILE FIXED PRICE GAS TRADING DECLINED SO RATIO TO FIXED PRICE GAS AT COMPANIES THAT REPORT GONE FROM 4 TO 12 TO 8 1/2 TO 1, DRAMATIC SHIFT FROM FIXED PRICE GAS OF COMPANIES THAT REPORT TO INDEX PRICE GAS, AND THAT IS A VOTE OF CONFIDENCE IN INDICES BY THE FOLKS WHO HAVE MONEY AT STAKE, PRICING DEALS TRANSACTING AND TO ME THAT SPEAKS IMMENSELY TO THE QUESTION.

>> VINCE KAMINSKI, RICE UNIVERSITY. I THINK INCREASING VOLUME OF TRANSACTIONS REPORTED TO INDEX PUBLISHERS IS A CRITICAL TASK FOR THE COMMISSION AND FOR THE ENERGY BUSINESS COMMUNITY. I MENTIONED IN THE MORNING, THE EUROPEAN UNION BENCHMARK REGULATION OPENS THE DOOR, YOU KNOW, IT'S A VERY NARROW OPENING RIGHT NOW, PRICE REPORTING, TRANSACTIONS REPORTING. RIGHT NOW IF IT'S POSSIBLE FOR THE CRITICAL INDICES, MOST IMPORTANT INDICES, IN THE CASE OF SUPERVISED ENTITIES. WE'RE TALKING ABOUT HIGHLY REGULATED FINANCIAL INSTITUTIONS. BUT IF YOU READ THE DETAILS OF EXECUTIVE REGULATIONS WHICH HAVE BEEN ISSUED BY ESLA, EUROPEAN SECURITY, OPENS THE DOOR TO A MUCH GREATER EXTENT. I DOUBT THAT IN THE U.S. MANDATORY REPORTING TO THE INDEX PUBLISHERS WILL FLY. I THINK THAT OUR JUDICIAL SYSTEM DOESN'T WORK THE SAME WAY THOSE SYSTEMS WORK IN EUROPE, AND I HAVE SEEN MANY REGULATORY INITIATIVES BEING SUCCESSFULLY CONTESTED IN THE COURT SYSTEM OVER MANY YEARS OF MY CAREER IN THE FINANCIAL AND ENERGY INDUSTRY. SO WHAT CAN BE DONE? I THINK EDUCATION, AND TO MOST MARKET PARTICIPANTS, REPORTING TO THE INDEX PUBLISHERS IS THEIR ADVANTAGE BECAUSE THEY IN PRINCIPLE SHOULD WANT PRICES AT WHICH THEY TRANSACT BEING REFLECTED IN THE INDICES WHICH ARE USED FOR ASSESSMENT PRICES OF DERIVATIVES AND USED IN THE INDEX TRANSACTION SO CURRENT SITUATION OF DETAIL WAGGING THE DOG, SMALL VOLUME OF REPORTED TRANSACTIONS DETERMINING THE INDEX, YOU KNOW, IS NOT IN ANYBODY'S INTEREST. THERE IS ANOTHER ISSUE I WOULD LIKE TO COMMENT BRIEFLY. ONE QUESTION IS SUFFICIENT SIMPLIFY AVAILABLE TRANSFER, THE POINT OF AN ACADEMIC, I TEACH CLASSES ON EMERGING MARKET ORGANIZATIONS AT RICE, MY CLASSES BETWEEN 75 AND 125 STUDENTS PER CLASS. YOU KNOW, ENROLLMENT IS BETWEEN INDICATOR OF OIL PRICES AND I WOULD BE DELIGHTED TO INTRODUCE MY STUDENTS TO THE GREATER EXTENT TO THE MICROSTRUCTURE OF THE U.S. ENERGY MARKETS. THE PROBLEM IS MY MODEST RESEARCH BUDGET WILL PROBABLY NOT BUY INDEX PRICES FOR ONE LOCATION FOR ONE YEAR. SO I THINK TALKING ABOUT EDUCATION, YOU KNOW, WE CAN  MORE ASSUASION, WE CAN DO MORE TO EDUCATE FUTURE LEADERS HOW THE MARKETS WORK AND I WOULD BE DELIGHTED TO GIVE MY STUDENTS SOME SPECIAL PROJECTS TO ANALYZE HISTORICAL DATA. THERE IS NO COMMERCIAL SECRETS, YOU KNOW, THOSE PRICES ARE WATER UNDER THE BRIDGE BUT MY STUDENTS WOULD HAVE GREATLY BENEFITED.

>> HELLO, KINDER MORGAN AGAIN, CURT MOFFATT. LET ME START WITH FIRST OF ALL KINDER MORGAN IN ONE WAY OR ANOTHER HANDS 40% OF ALL NATURAL GAS IN THE UNITED STATES EVERY DAY. WE DO HAVE A MARKETING COMPANY, OR ONE THAT BUYS AND SELLS STRICTLY AROUND OUR INTRASTATE PIPELINE BUSINESS. AND WE ARE A PRICE REPORTER. WE DO FEEL THAT IT'S AN OBLIGATION THAT IF WE'RE GOING TO TRADE AROUND THE INDICES WE NEED TO PARTICIPATE. BUT I DO HAVE TO SAY THAT WHEN I HEARD EVERYONE INTRODUCE THEMSELVES BEING FROM THE OFFICE OF ENFORCEMENT, AS THE CHIEF LEGAL OFFICER I WAS QUESTIONING WHY. AND I THINK THERE'S A LOT TO BE DONE AROUND HOW YOU CONDUCT YOUR OVERSIGHT AND TREATMENT OF PRICE REPORTERS, WHEN YOU HAVE A QUESTION OR WHEN YOU HAVE AN AUDIT. I THINK ALL OF US HAVE INTERNAL AUDITS. WE HAVE EXTERNAL AUDITORS, THEY ARE VERY PROFESSIONAL, THEY HAVE A SET TIME FRAME. IT'S NOT AN OPENENDED FISHING EXPEDITION. WE HAVE A SET BUDGET. PEOPLE LIVE UNDER THE BUDGET. WE HAVEN'T HAD THE SAME EXPERIENCE WITH FERCDRIVEN AUDITS. MOST OF OUR AUDITS HAVE BEEN, I HAVE STANDARD SECTION 8 FOR PIPELINE. BUT I THINK, YOU KNOW, INCREASED TRAINING MUCH YOUR AUDITORS BEFORE THEY GO OUT IN THE FIELD, CLEARER FOCUS OF THE PURPOSE OF YOUR AUDIT, CLEARER FOCUS ON WHAT YOU'RE GOING TO BE ASKING FOR. NOW, OBVIOUSLY IF YOU GET A TRAIL, YOU'RE GOING TO RUN A TRAIL THAT'S NOT EXPECTED, BUT THAT'S NOT USUALLY WHAT HAPPENS. IT JUST TAKES TWO OR THREE YEARS, IN SOME CASES. MORE IMPORTANTLY, THE AGENCY DOES NOT ROUTINELY, IN ANY TIME LINE, PROVIDE US WHEN THE AUDIT IS CLOSED. WE CAN SIT AROUND FOR SIX MONTHS AND WAIT FOR THE FIRST DRAFT, AND THEN WE HAVE TO WAIT FOR THE FINAL. AND AS WAS MENTIONED BY SOME PEOPLE TODAY, IT'S REPUTATIONAL RISK. WE HAVE TO REPORT THE AUDIT TO OUR AUDIT COMMITTEE. AND WE USUALLY HAVE TO REPORT IT PUBLICLY. SO THE LONGER IT HANGS ON, THE MORE IT CAN CALL INTO QUESTION OUR ACTIVITIES. I THINK THAT'S TRUE. YOU SEE A LOT OF HEADS SHAKING AROUND THE TABLE. I THINK THOSE ARE THINGS THE AGENCY CAN DO. AND BEING TRANSPARENT ABOUT WHAT YOU ARE DOING AND HOW YOU ARE IMPROVING THOSE EFFORTS WILL ENCOURAGE PEOPLE TO TAKE THE RISK OF PRICE REPORTING. I AGREE I THINK IT'S MORE A FEAR. BUT IT HITS. BECAUSE WE'RE A PRICE REPORTER WHEN YOU HAVE AN INVESTIGATION WE'RE ROUTINELY PROVIDED WITH SUBPOENAS. NOT OUR INVESTIGATION BUT WE GET INTO AN OPENENDED SET OF DATA WE HAVE TO PROVIDE, HAVE TO GO THROUGH THE COMPUTERS, HAVE TO HIRE ATTORNEYS, JUST TO HANDLE THOSE TYPES OF QUESTIONS. SO AND THAT IS PERCEPTION I THINK OF BEING A PRICE REPORTER, VERSUS NOT A REPORTER. I DON'T KNOW WHO ELSE YOU SUBPOENAED IN THESE CASES, BUT I KNOW YOU SUBPOENAED US. I KNOW IT LET TO ALMOST HAVING OUR OWN AUDIT. AND WE WORKED THROUGH IT. I'M NOT SAYING WE DIDN'T. WE HAVE A BIG INDUSTRY AND YOU HAVE YOUR JOB TO DO, BUT WE CAN WORK BETTER TOGETHER TO MAKE THOSE TYPES OF ACTIVITIES MORE EFFICIENT. THE OTHER THING THAT IS WITH RESPECT TO OUR CONFIDENCE IN THE INDUSTRY, WE'RE VERY CONFIDENT IN THE INDUSTRY BUT OUR CONFIDENCE IS BORN OUT OF ACCESS TO DATA. RIGHT NOW, YOU HAVE  IN OUR CASE WE WORK WITH ARGUS, WITH NGI, WITH PLATTS. WE UNDERSTOOD THAT PLATTS HAD A PERSPECTIVE THAT WAS DEVELOPED OUT OF HAVING JUST REPORTED DATA. WE UNDERSTOOD NGI SINCE 2008, I THINK 8 OR 10, HAS HAD BOTH THE DATA FROM ICE, FROM ACTUAL TRADES, AS WELL AS REPORTED DATA SO THEY HAD A DIFFERENT PERSPECTIVE ON HOW THEY CREATED, AS YOU HEARD I THINK NGI HAS NOT TRADITIONAL APPLIED EDITORIAL PERSPECTIVE, PLATTS I THINK HAS IN SOME CASES. BOTH NOW ARE TALKING ABOUT DOING ASSESSMENTS TO TRY TO ESTABLISH PRICES WHERE THERE'S NOT ADEQUATE LIQUIDITY OR TRADING. THAT'S A LITTLE BIT OF A NEW WORLD. WE'LL HAVE TO SEE HOW THAT PROCEEDS. BUT WE'VE ALSO ALWAYS HAD ACCESS THROUGH OUR RELATIONSHIP WITH ICE ON THE ACTUAL TRADE DATA. WE CAN THEN GO AND CORRELATE OURSELVES. WE NEED THE HISTORY. WE USE THE HISTORY REGULARLY TO TRY TO DO OUR OWN ASSESSMENT WHERE WE DON'T HAVE CLEAR LIQUIDITY OR EVEN A REPORTED PRICE. WE DO A LOT AROUND THE HOUSTON SHIP CHANNEL. WE TRACK KATIE. WE TRACK SHIP CHANNEL. WE RELY UPON HISTORY, RELY ON THE FORWARD MARKET TO INFORM THAT DEBATE. I DON'T SEE A BIG NEED FOR MANDATING REPORTING FROM ANY GROUP, WE HAVE CONFIDENCE IN THE MARKET. WE'VE SEEN TREMENDOUS RESOURCES DEVELOPED BY THE FREE MARKET, BY THE INGENUITY OF ICE OR PLATTS OR NGI OR ARGUS OR ANY OTHERS. ACCESS TO DATA, WE'RE WORRIED ABOUT CONCENTRATION OF THE DATA BEHIND PAY WALLS. THAT DATA IS AVAILABLE, THERE'S GOING TO BE MORE ENTREPRENEURS OUT THERE DEVELOPING MORE TOOLS THAT WE CAN WORK WITH. BECAUSE THE AGENCY OVER 30 YEARS HAS DEVELOPED A HELL OF AN EFFICIENT MARKET. BOTH IN THE COMMODITY AND IN OUR TRANSPORT SERVES. THAT'S WHERE WE ARE. WE DON'T THINK WE NEED A LOT OF GOVERNMENT MANDATES. WE THINK WE NEED MORE TRANSPARENCY, ACCESS TO DATA AND MORE COMPETITION SO THAT THE PRICE MAY GO DOWN FOR SOME OF THE ACCESS TO THE DATA.

>> J.C. KNEALE WITH ICE. I MAY HAVE A DIFFERENT PERSPECTIVE THAN MANY PEOPLE ON THE PACKAGE FROM INDEX PERSPECTIVE AS A REPORTER BECAUSE WE'RE NOT A PRA. WE SIMPLY ARE PUBLISHING MATH BASED ON REAL TRADES THAT ARE DONE IN REAL TIME EACH AND EVERY DAY. A COUPLE DISTINCTIONS I WANT TO POINT OUT, JUST VARIOUS THINGS I HEARD RECENTLY AND THROUGHOUT THE DAY, AS YOU REQUESTED, THINGS THAT YOU CAN DO. LOOK, IT SOUND LIKE THERE'S PLENTY OF SUPPORT FOR A LITTLE MORE CLARITY ON SAFE HARBOR. IT SOUNDS LIKE THERE IS DEFINITE SUPPORT FOR CLARITY ON DO I HAVE TO REPORT BOTH DAILY AND MONTHLY, OR CAN I REPORT ONE OR THE OTHER. I THINK THAT'S AN EXTREMELY INTERESTING ONE FROM A PRA PERSPECTIVE BECAUSE I DO THINK THERE ARE CUSTOMERS OUT THERE THAT WOULD REPORT MONTHLY, THAT DON'T WANT TO TAKE THE EFFORT TO REPORT DAILY. IT IS SIMPLY MORE ONEROUS TO DO IT ON A DAILY BASIS. IT REALLY IS. I ALSO HAVEN'T HEARD MANY PEOPLE FRUSTRATED WITH THE QUALITY OF DAILY INDICES, AND IN FACT THE STATS BEAR OUT THAT THERE'S BEEN A PRETTY DECENT BOTTOM IN THE AMOUNT OF DAILY TRANSACTIONS REPORTED BY PLATTS OR NGI, EXCUSE ME, CERTAINLY OUR OWN DATA SHOWS WE'RE ACTUALLY UP 10% VERSUS THE SAME LAST YEAR IN DAILY TRANSACTION. IN MONTHLY THERE'S STILL SOME ISSUES ADMITTEDLY. THERE COULD BE ENCOURAGEMENT OF MORE FOLKS, YOU KNOW, EITHER TRADING ON ICE, WHICH WILL COUNT AS  SORRY, WON'T COUNT AS REPORTING BUT IT WILL BE INCLUDED IN DATA THAT IS USED BY BOTH NGI AND BY PLATTS, IN CREATION OF THE INDEX. OR SIMPLY JUST REPORTING THAT. BUT I THINK IF YOU CAN REMOVE SOME OF THOSE BARRIERS, YOU'LL HAVE COMPANIES MORE NIMBLY CHOOSE ONE OPTION, REPORTING DIRECTLY TO THE COMPANIES, TRADING ON ICE. OR THE THIRD OPTION, PROBABLY MY MISTAKE, I DON'T THINK THERE WAS THREE. YOU CAN JUST NOT REPORT I SUPPOSE. ANOTHER THING THAT I WROTE DOWN, THERE'S BEEN A LARGE DISCUSSION ABOUT INDEX VERSUS FIXED PRICE, AND IT'S A VERY POIGNANT ONE FOR TODAY. I THINK JUST AS GREG POINTED OUT OBVIOUSLY THE AMOUNT OF FORWARD OPEN INTEREST BEING TIED TO THE INDICES TODAY REMEMBERS A CERTAIN AMOUNT OF CONFIDENCE IN THEM. THAT'S ONE INTERESTING POINT. I THINK ANOTHER POINT IS THOUGH WE COME BACK TO THE IDEA OF INDEX VERSUS ACTUAL FIXED PRICE TRADING. THERE IS A SIGNIFICANT PORTION OF GAS USERS IN THE MARKET THAT HAVE ZERO INCENTIVE TO PUT THEIR NECK ON THE LINE AND MAKE A GUESS ON FIXED PRICE. THEY HAVE EVERY DISINCENTIVE POSSIBLE IN TERMS OF LOSING THEIR JOB, MAKING THE COMPANY'S STOCK GO DOWN OR WHAT NOT. I DON'T KNOW HOW TO SOLVE THAT. THAT'S A FREE MARKET ISSUE. THAT'S A PUC ISSUE FOR SOME FOLKS, BUT I DON'T KNOW HOW YOU'RE GOING TO SOLVE THAT. SO THE QUESTION ULTIMATELY COMES BACK TO WHAT CAN WE DO TO FOSTER SIMPLY MORE FIXEDPRICE TRADING. I THINK THAT THERE ARE THINGS THAT SOME OF THE PEER CUSTOMERS IN THIS AUDITORIUM TODAY OR OUT THERE LISTENING CAN DO. THEY CAN MAKE AN EFFORT TO TRADE MORE IN A TRANSPARENT MARKETPLACE, WHETHER IT'S ON ICE OR SOME OTHER VENUE. LIQUIDITY DOES BEGET LIQUIDITY. THERE'S ONLY SO MUCH YOU CAN DO THOUGH. SO THAT'S NOT ALWAYS POSSIBLE. BUT THE MANDATING OF ANY OF THIS SEEMS CONTRARY TO THE POINT OF VIEW OF MOST OF THE OTHER COMMENTS TODAY. MOST OF THE OTHER COMMENTS TODAY HAVE BEEN HELP US REDUCE THE REGULATORY BURDEN ONAT VERY LEAST PERCEIVED REGULATORY BURDEN, COST, MANDATES, ET CETERA, TO COME FULL CIRCLE AND SAY MAYBE WE SHOULD MANDATE THIS PIECE. I'M GOING TO NEED MORE CONVINCING ON THAT PART. WE'VE HEARD A LOT OF PEOPLE SAY THEY ARE VERY CONFIDENT IN THE INDICES, VERY CONFIDENT IN THE DATA BEHIND THE INDICES. I APPRECIATE CERTAIN CUSTOMERS' ISSUES WITH BEING A PROPORTIONATE  DISPROPORTIONATELY LARGE PERCENTAGE OF THOSE VOLUMES. I'M SYMPATHETIC TO IT. I WISH I HAD A BETTER ANSWER, AND WE'LL AS A MARKET WORK TO TRY TO SOLVE THAT I'M OPTIMISTIC BECAUSE IT'S IN EVERYBODY'S BEST INTEREST. AND THEN LASTLY, AS A RICE ALUM, WOULD MORE THAN HAPPILY TRY TO HELP YOU WITH DATA, VINCE, SO WE'LL FIGURE THAT OUT.

>> IT'S IN THE TRANSCRIPTS.

>> IT'S ON PUBLIC RECORD NOW. AT A VERY LOW RATE, VERY LOW RATE. [LAUGHTER] THAT'S  I'LL PASS FOR NOW. THANKS YOU.

>> WELL, SPEAKING OF ACCESSIBILITY TO DATA WHILE WE'RE ON THAT TOPIC BACK, ONE OF THE STANDARDS FOR INDEX, BEING AN INDEX DEVELOPER IS HAVING THE INFORMATION ACCESSIBLE. AND IT SEEMS WE'VE MOVED TO THIS SUBSCRIPTION MODEL AND I WANTED TO TALK A LITTLE BIT PEOPLE WHO COMMENT NOW, WHETHER THEY FEEL LIKE THEY HAVE ENOUGH ACCESSIBILITY TO THE DATA THAT GOES INTO THE INDICES AND WHETHER OR NOT THERE COULD BE IMPROVEMENTS THERE, AND IF THEY THINK THAT'S SOMETHING THAT SHOULD CHANGE THERE.

>> COMMENTS FROM THE FIRST QUESTION AS WELL AS I'M HAPPY TO ANSWER THAT ONE.

>> OKAY.

>> I'LL START WITH THE QUESTION YOU ASKED. I'M SURE MARK IS GOING TO REACH ACROSS AND HIT ME BUT THERE'S PRICE DIFFERENCES BETWEEN DIFFERENT PRAs. THERE'S A CLEAR DIFFERENTIATION, IT'S ONE OF THE THINGS THAT I KNOW SPEAKING ON BEHALF OF CHENIERE WE HAVE EXPRESSED SOME OF OUR CONCERNS TO PLATTS. WE HAVE GIVEN OUR SUPPORT TO WHEN WE DO REPORT, TO REPORT TO MORE THAN ONE ENTITY FOR THE EXACT QUESTION, THE ANSWER THAT YOU ARE BASICALLY ASKING, IS THERE A BIG PRICE DIFFERENCE, AT TIMES THERE ARE. SO I KNOW FROM CHENIERE'S PERSPECTIVE WE WILL REPORT TO MULTIPLE PRAs. TO GO BACK AND MAKE A COMMENT ABOUT THE PRAs, I DO THE NEW FEEL IT IS IT'S FUNCTION OF THE PRAs TO COME UP WITH A PRICE WHEN THERE IS NOT ENOUGH DATA TO BASICALLY PUBLISH A PRICE BASED OFF THE DATA. THERE WERE NO SUBMISSIONS. I DO THE NEW FEEL IT'S THE PLACE OF PRA TO PROVIDE A PRICE. WHETHER YOU'RE DOING BUSINESS BILATERALLY WITH YOUR CUSTOMER UNDER A NASB, GAS ANNEX, THERE ARE PROVISIONS ABOUT NEGOTIATING WHAT THE PRICE SHOULD BE BETWEEN YOU AND YOUR COUNTER PARTY, WHEN THERE IS NOT A PRICE FORMULATED BASED OFF DATA SUBMISSION. SO I APPRECIATE WHERE MARK IS COMING FROM WANTING TO PROVIDE IDEAS AND TO GIVE PERCEIVED LIQUIDITY BUT I DON'T THINK IT'S THE JOB OF THE PRA TO PROVIDE THAT PRICE. YOU THINK YOU GET TO ANOTHER SET OF ISSUES, REGULATED OR NOT, I THINK YOU GET INTO A BUNCH OF DIFFERENT ISSUES. SO THAT'S MY COMMENTARY ON ONE OF THE THINGS THAT MARK BROUGHT UP IN HIS INTRODUCTION. BUT IN TERMS OF ANSWERING YOUR QUESTION ABOUT SUBSCRIPTION MODELS, WE'RE ALL FOR PAYING FOR THE DATA. ESPECIALLY IF WE SUBMIT. BUT I DO THINK IF YOU DO SUBMIT THE DATA, YOU SHOULD HAVE THE RIGHT TO OTHER PEOPLE'S DATA TO HOW THE INDICES WERE FORMULATED AS WELL AS I DO THINK THERE NEEDS TO BE COST LEVELS BETWEEN THE DIFFERENT PRAs.

>> SO FIRST I'D LIKE TO AGREE STRONGLY WITH YOUR POINT NO ONE IS MAKING A PRESENCE. HOWEVER YOU WANT TO PUT THE GLOVES ON THAT, THAT DOESN'T MAKE SENSE. THERE'S NOT ENOUGH DATA, THERE'S NOT ENOUGH DATA. LET'S NOT PRETEND THERE'S A PRICE GAP. SECONDLY I'M NOT SURE WHY THERE'S A VOTE OF CONFIDENCE IN INDICES. I'M GLAD BUT WHY. I DON'T HEAR THAT CONFIDENCE, IF YOU LISTEN TO ISO NEW ENGLAND, CALIFORNIA, NEW YORK, KINDER, IT STARTS TALKING ABOUT THEY ARE CONFIDENT MOST OF THE TIME EXEMPT FOR WHEN YOU NEED TO BE CONFIDENT WHEN PRICES ARE GOING WILD, YOU LOOK AT ICE AND LOOK AT REAL DATA INSTEAD OF INDICES. WE IN LOOKING AT PRICES FOR  THE COST OF GAS, DO NOT USE INDICES BECAUSE THEY ARE NOT TIMELY, WE'RE USING ONLY ICE DATA, YOU NEED TO KNOW WHAT THE COST IS CURRENTLY, NOT WHAT IT WAS YESTERDAY. SO I THINK YOU HAVE TO BE  THAT WAS MY OVERARCHING COMMENTS, TO GO BACK TO DATA HAVE YOU TO BE CAREFUL ABOUT GIVING PEOPLE ACCESS TO DATA. OBVIOUSLY THAT'S IDEAL BUT YOU NEED TO BE CAREFUL ABOUT MARKET POWER CONCERNS, ACCESS TO OTHER PEOPLE'S TRADING STRATEGIES AND ALL THOSE THINGS. SIMPLY HAVING ACCESS TO DATA SOUNDS LIKE A GOOD THING FOR VINCE, AS AN ACADEMIC, THAT'S ONE THING. BUT FOR COMPETITORS, THAT'S ENTIRELY ANOTHER THING AND WE'RE SENSITIVE AS A MARKET MONITOR AND DO NOT PROVIDE GENERAL DATA ON PEOPLE'S BIDS AND ASKS TO THE REST OF THE MARKET FOR THAT REASON.

>> J.C.? AND THEN DREW.

>> LET'S GO AROUND THE HORN.

>> OKAY. MARK.

>> SO A FEW THINGS TO TOUCH ON THERE. FIRST IN TERMS OF IDEAS OF PRICE ASSESSMENT WITH NO TRADES, VIABLE FEEDBACK AND PLATTS LIKE TO GATHER ALL FEEDBACK, POSITIVE OR ANYTHING. ANECDOTALLY THE BIGGEST REQUEST WE GET BY FAR FROM MARKET PARTICIPANTS IS TO PROVIDE TRANSPARENCY AND ASSESS A PRICE. THERE'S DIFFERENT REASONS, IT COULD BE BECAUSE OF THE FACT THERE ARE FINANCIAL SPOTS THAT ARE PRICED OFF OF THESE INDEXES, RIGHT? COULD BE THE FACT THAT THEY JUST LIKE TO HAVE THAT PRICE POINT THAT THEY CAN REFERENCE ON A DAILY BASIS, MAYBE THEY ARE USING FOR MARKETING PURPOSES, MAYBE LOOKING FOR JUST LOOKING AT PRUDENCE TO VERIFY THE PRICE THEY ARE GETTING IN THE MARKET. WHATEVER THE REASON MAY BE. THAT IS SOMETHING THAT I BELIEVE DOES SERVE SOME VALUE TO THE MARKET. NOW, HAVING SAID THAT, AS WE TALK ABOUT THE EVOLUTION OF THIS INDUSTRY OVER TIME, PERHAPS THE SITUATION WHERE YOU MIGHT NEED TO REVISIT CONTRACTS AND SAY IF PLATTS ASSESSES A PRICE, WE MIGHT USE IS. IT'S UP TO YOU. IT'S UP TO US TO PROVIDE AND LET THE MARKET DECIDE WHAT THEY WANT TO USE. AS WE TALK ABOUT JUST ONE MORE POINT, TRANSPARENCY, THIS IS RELATED TO ORLANDO'S COMMENTS, PLATTS IS ALWAYS LOOKING AT WAYS TO PROVIDE MORE TRANSPARENT INFORMATION TO THE MARKET. WHAT'S UNIQUE ABOUT NATURAL GAS AS COMPARED TO, SAY, OIL, THE OIL PLATTS MARKET CLOSED ENVIRONMENT IS VERY MUCH DIFFERENT. WHERE COUNTERPARTIES ARE NAMED IN TERMS OF WHO IS BIDDING AND OFFERING AND TRANSACTIONS OCCUR, COUNTERPARTIES ARE NAMED. NATURAL GAS DOESN'T HAVE THAT, RIGHT? THAT'S ESSENTIALLY BEEN DECIDED BY PARTICIPANTS THEMSELVES. AND BECAUSE OF THAT WE'RE LIMITED SOMEWHAT IN TERMS OF WHAT INFORMATION WE CAN PROVIDE. HAVING SAID THAT, WE WOULD ALWAYS BE LOOKING FOR WAYS TO PERFORM SOME ANALYSIS AROUND THE DATA THAT WE DO RECEIVE IN OUR INDICES, IT COULD BE FOR EXAMPLE COUNTER PARTY CONCENTRATION OF AN INDEX OVER TIME. MAYBE NOT NAMING THAT COMPANY FOR COMPETITIVE REASONS BUT JUST PROVIDING SOME INFORMATION AROUND CONCENTRATION IN THE INDICES, WE'RE HAPPY TO WORK WITH MARKET PARTICIPANTS OR THE COMMISSION TO MAKE THAT HAPPEN. FINALLY THE IDEA OF ACCESS TO DATA, WE'VE HEARD SOME COMMENTS FROM GEORGE AND THE PREVIOUS PANEL AND CURT AND OTHERS AROUND THE ACCESS TO DATA AND THEIR CONCERNS THERE. IN WORKING TO IMPLEMENT THIS AGREEMENT WITH ICE WE'VE BEEN EXTREMELY DELIBERATE IN OUR APPROACH IN TERMS OF METHODOLOGY, IN TERMS OF TIMES OF DATA WE PRODUCE AND WHEN WE PRODUCE IT BECAUSE THE TIME AT WHICH YOU PRODUCE IS IMPORTANT AS WELL. BUT ALSO HOW WE HANDLE TYPES OF DATA IN TERMS OF INDICES AND THINGS LIKE THAT. DATA HAS VALUE, RIGHT? JUST AS STEEL IN THE GROUND HAS VALUE. AND WHILE THE PRICE POINTS AT DIFFERENT PRAs WILL DIFFER FOR VARIOUS REASONS, MY FUNCTION AT PLATTS IS INDEPENDENT OF SALES, SO I DON'T KNOW FOR EXAMPLE IF THE COMPANY SPENDS A DOLLAR ON PLATTS SERVICES OR A MILLION DOLLARS IN PLATTS SERVICES, IT'S PART OF OUR INDEPENDENCE BECAUSE WE DON'T WANT TO HAVE THAT PART OF OUR JUDGMENT PROCESS. SO I THINK THAT THE ACCESS TO DATA IS IMPORTANT, AND OUR COMMERCIAL TEAMS PRODUCE PACKAGES OF DATA SO THAT THERE'S DIFFERENT ALTERNATIVES FOR YOU TO ACCESS DIFFERENT TYPES OF DATA AT DIFFERENT PRICE POINTS SO IT MEETS YOUR BUSINESS NEEDS. THANK YOU.

>> I WANTED TO RESPOND TO SOMETHING JOE SAID A COUPLE TIMES NOW, EXPRESSING SOME PUZZLE. HOW WE CAN BE COMFORTABLE WITH INDICES AND THEY REFLECT RELIABLY REAL PRICES. I WANT TO GO MORE IN DEPTH THAN THE SOUND BITE STUFF YOU HEARD SO FAR. THE FULL ANSWER IS NOT THAT WE'RE COMFORTABLE WITH PRINTED INDICES, WE'RE COMFORTABLE WITH INDICES, HOW THEY ARE PUT TOGETHER, PLUS TRANSPARENCY HOW LIQUID OR ILLIQUID THEY ARE, WE HAVE A SENSE OF HOW RELIABLE THEY ARE AND WE CAN CONFIDENCE IN OUR ABILITY TO CONTRACT AROUND RISK. IF WE SEE A POINT THAT POINTS LESS LIQUID WE CAN MOVE AWAY, TRY TO A MORE LIQUID INDEX WITH BASIS DIFFERENTIAL, OR TRADE FIXED PRICE INSTEAD OF INDEX PRICE. THERE'S A NUMBER OF TOOLS AVAILABLE IN THE TOOLBOX WHEN WE AS A COMPANY SEE A POINT WE DON'T LIKE MUCH. THE SOUND BITE IN GENERAL TENASKA IS COMFORTABLE WITH THE CURRENT SYSTEM BUT WE DON'T BELIEVE THE SYSTEM IS BROKEN AND WE THINK A SIGNIFICANT REGULATORY INTERVENTION AT THIS POINT TO IMPOSE MANDATORY PRICE REPORTING OR WHAT HAVE YOU IS NOT CALLED FOR AND ARE PARTICULARLY CONCERNED BECAUSE OF LAW OF UNINTENDED CONSEQUENCES APPLIES AS A COMMISSION AND WITHOUT FULLY UNDERSTANDING WHAT IMPACT MIGHT HAVE ON THE FOLKS CURRENTLY PRICE REPORTING YOU'RE GOING INTO A SOMEWHAT RISKY AREA, YOU COULD CAUSE PARTIES TO QUIT PRICE REPORTING THAT CURRENTLY ARE.

>> I APPRECIATE MOVING BEYOND THE SOUND BITES, SOUND BITES ARE GETTING ANNOYING AFTER A WHILE I HAVE TO ADMIT. I HEARD WHAT YOU SAID BUT ONE THING I DIDN'T HEAR YOU SAY IS WHY IS IT YOU BELIEVE THAT THE INDEX, SAY IT'S 10% OF TRADE, SAY IT'S ONLY BP, SAY IT'S ONLY ONE TRADER, YOU HAVE SOME SENSE OF THAT, WHY IS IT YOU WOULD THINK THAT WAS ACTUALLY REPRESENTATIVE OF THE  CORRECTLY REPRESENTATIVE OF THE MEAN VALUE OF THE TRADES? YOU HAVE NO IDEA WHAT THE OTHER TRADES ARE. WHY DO YOU THINK THAT'S REASONABLE? I UNDERSTAND WHY PEOPLE USE INDICES BECAUSE IT'S THE ONLY THING AVAILABLE FOR ALL THE REASONS PEOPLE SAID, LOTS OF INCENTIVES NOT TO GO FIXED. SO THEY ARE INCENTIVES TO USE INDICES EVEN IF THEY ARE WRONG. I'M NOT SAYING THEY ARE WRONG OR CALLING FOR REGULATORY INTERVENTION, I DON'T WANT THOSE WORDS IN MY MOUTH. I'M NOT CALL FOR THAT. I'M ASKING A SIMPLE QUESTION, IT MAKING SENSE TO THINK ABOUT HOW SCIENTIFICALLY REPRESENTED THEY ARE.

>> I WOULD JUST LIKE TO SAY, YOU KNOW, TO THE GENTLEMAN'S POINT, I THINK THAT'S EXACTLY WHY YOU SHOULD HAVE A ROBUST PRICE REPORTING, AND THIS INDUSTRY SHOULD EMBRACE A ROBUST PRICE REPORTING THING BECAUSE THERE'S NOTHING MAGICAL ABOUT THESE PRICES. THEY ARE VOLUMEWEIGHTED AVERAGES. UNLESS YOU WANT TO DO AN ASSESSMENT. BUT BASICALLY THEY ARE VOLUMEWEIGHTED AVERAGES. WE'VE GOT TO KEEP THAT IN MIND. THAT'S HOW THEY HAVE ALWAYS, YOU KNOW, BEEN DEVELOPED FROM THE BEGINNING, EVERY SINCE THEY WENT FROM LOOKING AT A BID AT, LIKE THE THING ON THE SPREAD, YOU KIND OF GUESS WHERE IT WOULD SHOW BUT THEY CAME UP WITH THE IDEA, WELL, IF YOU DID A VOLUMEWEIGHTED AVERAGE YOU COULD GET A PRICE, THE INDUSTRY EMBRACED IT AND IT'S WORKED QUITE WELL. AS FAR AS PRICE ASSESSMENTS, YOU KNOW, WE DON'T HAVE ANY PLANS TO DO FORMAL PRICE ASSESSMENT BUT, YOU KNOW, IF PLATTS FEELS LIKE IT'S ELSE IN, WELL, IT'S FINE. ALSO I LOVE THE IDEA OF PRICE LEVELS BETWEEN THE IDEA THAT THE PRICE DATA COULD BE LEVELLIZED ACROSS, SO WE COULD MAKE SOME MONEY. I WANT TO MAKE THE POINT WE NEED TO KEEP IN SPECK ACTIVE WHAT WE DO. PLATTS VOLUME WEIGHTS. WE VOLUME WEIGHT IT. THAT'S HOW INDICES ARE DEVELOPED. IT'S A JOURNALISTIC FUNCTION BASICALLY. THANK YOU.

>> OKAY, SO ONE THING THAT'S, YOU KNOW, IN MY MIND HERE IS KEEP USING THE WORD "ENCOURAGING," OR ENCOURAGE, ENCOURAGE. I THINK YOU SAID BP.

>> (INAUDIBLE).

>> YEAH, I'M GLAD YOU DID. I'M GLAD YOU DID BECAUSE I THINK  WELL, MY REQUEST IS WE'RE GOING AT THIS FROM A LOT OF EVERYONE AROUND THE TABLE, MARKET LIQUIDITY. WE'RE COMING FROM THAT AS WELL, BUT ALSO COMING FROM MY COMPANY AND OTHERS, THE MAJORS, SOME OF THE MAJOR FIVE OR THREE THAT ARE REPORTING, I'VE SAID IN PANEL 1, WE ARE TAKING ON RISK. TALK ABOUT THE REGULATORY  I THINK YOU HIT ON IT, J.C THAT IS  COLLEAGUES AROUND THE TABLE, I'M NOT SURE ANYONE ELSE  IT'S RISK THAT WE'RE TAKING ON. SO IT IS SOMETHING THAT'S  IT CAN'T BE JUST ABOUT ENCOURAGING IS WHAT I'M ASKING FOR, SOMETHING THAT HAS MORE TEETH AND WAS PROPOSING SOMETHING. MANDATORY ALL THE WAY AROUND, I'M WITH YOU. I'M NOT SUPPORTING THAT BUT SOMETHING HAS TO BE DONE. IT CAN'T BE WE'RE GOING TO ENCOURAGE BECAUSE I DON'T THINK THAT'S GOING TO WORK. MY POINT IS THAT'S WHY I WAS TRYING TO FIND A HAPPY MEDIUM TO SAY IF YOU'RE A MARKETER, I THINK YOU SAID IT, IF YOU'RE A MARKETER, VINCE SAID IT, IF YOU'RE A MARKETER, IT'S IN YOUR BEST INTEREST TO REPORT VOLUMES. IF YOU'RE BUYING, SELLING, IN THE MARKET EVERY DAY, SWAP MARKET AND PHYSICAL MARKET, YOU WOULD WANT TO BE IN THE MARKET AND REPORTING. THAT WAS MY PLAN B IF YOU WANT TO CALL IT, SORT OF THOSE MARKETERS IN IT FOR BUYING AND SELLING, THEY REPORT.

>> COREY MENTIONED SOMETHING SIMILAR, A HYBRID BETWEEN A MANDATORY REPORTING AND VOLUNTARY REPORTING WHERE IF YOU SELL OVER A CERTAIN AMOUNT, YOU ARE REQUIRED TO VOLUNTARY REPORT I GUESS. [LAUGHTER] I THINK THAT'S HOW YOU PUT IT.

>> I WAS TRYING TO BE NICE AND NOT COME OUT AND SAY MANDATORY.

>> ARE THERE OTHER IDEAS FOR SOME SORT OF HYBRID? ARE THERE LEGAL OBSTACLES? PEOPLE STRONGLY SAID NO MANDATORY BUT WHAT ARE THE OTHER OPTIONS IN BETWEEN THAT VOLUNTARY AND MANDATORY? I THINK YOU SAID REQUIRE ALL MARKETERS, BUT IT'S NOT MANDATORY. ANYBODY HAVE OTHER COMMENTS?

>> LET ME CLARIFY THAT. NOT MANDATORY. A MANDATORY FOR MARKETERS THAT ARE IN THE BUSINESS OF BUYING AND RESELLING GAS IS WHAT I WAS TRYING TO 

>> SOUNDS LIKE AMENDING THE BLANKET MARKET CERTIFICATES YOU'RE SUGGESTING?

>> YEAH, I GUESS SO. [LAUGHTER]

>> DID YOU HAVE YOUR MICROPHONE ON FOR THAT?

>> I USED THE DATA. IF YOU JUST DID THAT, IN THE TOP TEN, YOU WOULD HAVE SOME PRETTY ROBUST NUMBERS COMING INTO THE INDEX, JUST FROM THE TOP, CHENIERE BEING ONE, WHICH COREY SAID WILL BE REPORTING AT THE END OF THE YEAR, HOPEFULLY THE END OF THE YEAR. THAT FIXES  IN MY OPINION DOES A LOT, MOVES THE DIAL IN THE RIGHT DIRECTION.

>> I'M CURIOUS DOES ANYONE THINK THAT'S A BAD IDEA? I HAVEN'T HEARD IT YET.

>> HERE WE GO.

>> I DON'T KNOW THAT IT'S A BAD IDEA. IT'S AN IDEA WE NEED TO THINK ABOUT A LOT MORE AS A COMPANY AND GET COMFORTABLE IS NOT A BAD IDEA. THE REASON IT MAY BE A BAD IDEA, YOU MAY HAVE A BETTER SENSE, THE LAST THING WE WANT IS FOR HALF THE COMPANIES TO DECIDE THEY ARE OUT AND GO THE WAY OF THE BANKS AND LEAVE THE SPACE. THAT MAY BE VERY UNLIKELY BUT.

>> WHERE WOULD THEY GO?

>> TRADE PORK BELLIES OR METALS, I DON'T KNOW. I KNOW THE LIST, ORLANDO, THE TOP TEN WITH THE LARGEST INCREASE IN VOLUMES IS THE LIST IN THAT PLATTS ARTICLE, WE'RE THE ONE THAT CURRENTLY DOES REPORT OUT OF THAT LIST OF TEN COMPANIES THAT HAD THE INCREASE. ONE OF TEN IS CURRENTLY REPORTING, THAT'S US. WE'D LOVE TO SEE THE REST STEP UP AND REPORT. IT'S GREAT TO HEAR CHENIERE IS GOING TO. LAW OF UNINTENDED CONSEQUENCES, THE LAST THINK WE WANT IS FOLKS TO MAYBE NOT LEAVE BUT QUIT SELLING FIXEDPRICE GAS.

>> THIS IS REALLY TO J.C., YOU'RE THERE'S ALWAYS UNINTENDED CONSEQUENCES THAT WE CAN'T EVEN THINK OF TODAY WITH ANY OF THIS WE'RE DOING TODAY, THAT WE'RE CONTEMPLATING. YOU THINK ABOUT THE PLATTS, ICE, I THOUGHT THIS THROUGH. YOU COULD HAVE THAT, DREW, IN THE SAME CASE, SOME PEOPLE NOW DOING BUSINESS ON ICE, NOT REPORTING, GO TO NGI, WE'RE NOT GOING TO PLATTS. NOW THEY KNOW IT'S GOING INTO PLATTS. THEY SAY MAY A NEW INDEX, I'M NOT GOING TO DO ANY MORE FIXED PRICING. THERE'S ALL KINDS OF UNINTENDED CONSEQUENCES, WE CAN JUST TALK TILL WE'RE BLUE IN THE FACE AND COME UP WITH TWENTY. YOU HAVE HAVE SOME, I'M GOING TO DO INDEX, SAME THING. YEAH, THERE IS THINGS TO THINK.

>> I'LL LET JC AND CURT AND A FOLLOWUP QUESTION.

>> 40 YEARS AGO WE WERE EXPECTING A PENNY, A PENNY ESCALATION EVERY QUARTER, THE PRODUCER HAD TO FILE A PIECE OF PAPER HERE TO GET PERMISSION TO COLLECT THAT PENNY. AND WE REGULATED ALL OF THAT. AND BEGINNING IN THE '70s AND '80s THE AGENCY BEGAN GETTING OUT OF THE WAY OF THE MARKET, IT'S WORKED REALLY WELL. AND WITH THE MARKET RULES, FROM TIGHT RULES TO OPENING UP AND IT'S WORKED WELL AGAIN. I TEND TO RELY ON THE MARKET. I THINK IT'S BEEN VERY EFFICIENT. THE ACT NOW I HAVE A BIT OF A DIFFERENT VIEW THEORETICALLY ON AN EXCHANGE IN THE DATA THAT'S ON THE EXCHANGE, VERSUS HOW THEY MAY CHOOSE TO USE THAT DATA, TO PROVIDE OTHER PRODUCTS OR TAKE THAT DATA WHERE THEY INVEST CAPITAL TO CREATE THE EXCHANGE AND PUBLICIZE EXCHANGE SUBJECT TO EXCHANGE REGULATION, THAT DATA THEY CAN THEN SELL TO PLATTS OR SELL TO NGI OR SELL TO ANY OTHER ENTREPRENEUR. OUR CONCERN IS ACCESS TO DATA FOR FAIR PRICE FROM THE EXCHANGE, THAT'S DIFFERENT THAN A PRICE PUBLISHER, INDEX PUBLISHER. IF YOU WANT TO BE IN THAT BUSINESS, THAT'S FINE. BUT THAT CORE DATA FROM THE EXCHANGE I THINK COULD BE VIEWED AS PUBLIC GOOD THAT YOU GET SOME PRICE FOR BECAUSE YOU INVESTED TO COLLECT IT. WHAT WE'RE CONCERNED ABOUT IS THAT THAT TYPE OF DATA IS NOT AVAILABLE TO THE ENTREPRENEUR TO DEVELOP OTHER PRODUCTS THAT WE CAN RELY UPON WHETHER FOR CORRELATION PURPOSES OR HISTORY AND RESEARCH PURPOSES, WHATEVER WE WANT TO BUY IT FOR. THAT'S OUR CONCERN. SO WHEN WE EXPRESS CONCERN ABOUT THE PLATTS ICE TRANSACTION, WE DIDN'T HAVE CLEAR CLARITY AS TO WHAT WERE THE EXCLUSIVIVITY.

>> I LIKE IT. CURT IS MY FRIEND.

>> REALLY WHATEVER PLATTS WANTS TO DO WITH THAT DATA THAT THEY COLLECTED, WHAT THEY CAN BUILD A BETTER MOUSE TRAP, GOOD ON THEM. BUT I'D LIKE TO MAKE SURE THERE ARE OTHER COMPETITORS OUT THERE WITH THE SAME ACCESS TO THE BASE DATA, THEY CREATE A BETTER MOUSE TRAP, AND GET PRICE COMPETITION IN THE INDEX WORLD. OR OTHER PRODUCTS THAT WE CAN USE TO CORRELATE IN THE HISTORY AND RESEARCH, AS I SAID. BUT IT IS. IT'S CRITICAL TO THE MARKET. I MEAN, EVEN FROM A PLATTS' OWN DATA, IT'S ESSENTIAL, WITH THE INFORMATION PEOPLE PUTTING TOGETHER IN DIFFERENT WAYS ARE ESSENTIAL ON THAT PRICE DISCOVERY.

>> CURT IS FLYING BACK WITH ME TONIGHT.

>> NO, I'M GOING TO THE BEACH.

>> DARN. A COUPLE THOUGHTS, FIRST I'LL ECHO'S ORLANDO UNINTENDED CONSEQUENCES. YOU JUST NEVER KNOW. ONE THING I WOULD ASK FOR THAT I THINK CERTAINLY A LOT OF PEOPLE UP HERE MAY AGREE IS SOME TIME. ONE OF THE THINGS THAT'S CHANGEED IN THE LAST 18 MONTHS IS THE PLATTS ICE AGREEMENT. YOU'RE GOING TO FIND THE MAJOR PRA FOR 67 TO 68% OF ALL FINANCIAL CORDS REGIONALLY IS ABOUT TO GET AN INFLUX OF MORE DATA THAN THEY EVER THOUGHT IMAGINABLE. THAT'S GOING TO BE OUR TRANSACTION DATA. IT'S HARD TO TELL JUST HOW MUCH MORE DATA I HAVE THAN THE PRAs BECAUSE THERE ARE ISSUES WITH THE PRAs KNOWING THEIR COUNTERPARTIES. BUT I CAN TELL YOU IN GENERAL WE'RE GOING TO HAVE A LOT MORE DATA. WE'VE AVERAGE THE CLOSE TO 300 COUNTERPARTIES OVER THE LAST SEVEN YEARS. AND THAT NUMBER IS ONLY FLUCTUATED BY 10 OR SO COUNTERPARTIES. AVERAGE PRA HAS 30 TO 50 PRICE REPORTERS. SO AT A MINIMUM, YOU'RE GOING TO SEE A LOT MORE DATA IN PLATTS INDICES, SIMILARLY IN NGU YOU CAN SEE ROBUSTNESS. INTERESTINGLY OUR DATA WAS FREELY AVAILABLE TO CUSTOMERS SINCE INCEPTION, SINCE 2001. WE DID EVERYTHING WE COULD IN THE MARKET TO ENCOURAGE PEOPLE TO USE OUR INDEX AS THE SETTLEMENT FOR FINANCIAL TRANSACTION. WE DIDN'T WIN THAT WAR. WE DIDN'T. IT DIDN'T MATTER IF IT WAS THE BEST DATA. DIDN'T MATTER IF IT WAS THE MOST TRANSPARENT OR THE MOST ROBUST DATA SOURCE IT WASN'T THE DATA CHOSEN FOR A VARIETY OF REASONS. AND THAT'S OKAY. BUT THAT WAS COMPETITION THAT DID THAT. COMPOSITION ALLOWED PEOPLE TO MAKE CHOICES. LETTING PEOPLE MAKE THEIR OWN CHOICES IS REALLY WHAT THIS ENTIRE COUNTRY IS BASED ON FOR THE MOST PART. AND SO I SHY AWAY WHEN I HEAR THE WORD "MANDATE." I DON'T LIKE THAT. NOW, IF YOU WANT TO MANDATE, I'M HAPPY IF YOU WANT TO MANDATE THEY TRADE EVERYTHING ON ICE. THAT WORKS FINE FOR ME. IT WOULD BE THE ULTIMATE IN TRANSPARENCY IT IF THAT'S WHAT WE'RE TRYING TO GET TO. THE NEXTDAY MARKETS, IF YOU ASK ANY TRADER, PICK A RANDOM NUMBER, CALL THEM, YOU'LL HEAR THEM SAY 80 TO 90% GOES TO ICE. IT'S AN ODD DAY WHEN WE DON'T PRINT SHIP CHANNEL, IT HAPPENS TWO OR THREE TIMES A YEAR. IT'S A SORT OF WEIRD THING BUT COMES BACK TO ASSESSMENT, YOU SAY SHOULD I NOT HAVE A PRICE? GUESS WHAT, I'M AN EXCHANGE AND I CLEAR FINANCIAL FORWARDS AGAINST THAT PRICE. I DON'T HAVE THE LUXURY OF SAYING, OH, JUST SKIP TODAY. WE'VE BEEN HISTORICALLY GOING OUT AND DETERMINING THAT PRICE AS THE EXCHANGE WE USE, ALL THE DATA AT OUR DISPOSAL SPREADS HISTORY, ET CETERA. GENERALLY THE MARKET ACCEPTS OUR DESCRIPTION OF HOW WE CAME ABOUT THAT PRICE. I DO THINK IT IS PRUDENT THAT THE PRAs LISTEN TO THEIR CUSTOMERS BECAUSE YOU CAN BE SURE IF THEY ARE ASKING ME TO COME UP WITH THE PRICE THEY ARE ASKING THE PRAs TO COME UP WITH A PRICE. SO I'M SUPPORTIVE OF PRAs LISTENING TO CUSTOMERS, HOWEVER THAT MAY FALL. I'M GOING TO PUSH BACK ON COREY'S STATEMENT WILL PRICE LEVELS. I GUESS WHAT YOU'RE SAYING BECAUSE I'D RATHER PAY A HONDA PRICE FOR A BMW, BUT THE REALITY IS DIFFERENT FEES FOR DIFFERENT THINGS, AND JUST AS MANY PEOPLE ON THIS PANEL IN THIS ROOM OFFER DIFFERENT PRICES FOR THEIR OWN SERVICES, WHETHER IT BE TRANSPORT, OR GAS, END USER, THAT PRICE COMPETITION IS WHAT KEEPS THE MARKET EFFICIENT. IF WE'RE GOING TO SIMPLY APPLY A ONEPRICEFITSALL MODEL YOU'LL QUICKLY DO AWAY WITH POTENTIALLY A LOT OF INNOVATION THAT LED TO CHENIERE BEING THE LEADER IN OMG IN NORTH AMERICA. MAYBE I MISUNDERSTOOD.

>> I WANT TO CLARIFY. I DON'T MEAN EVERYBODY SHOULD CHARGE THE SAME PRICE BUT LET'S JUST BE REAL HONEST. THERE'S A HUGE DIFFERENCE IN THE FOUR PRICE REPORTING AGENCIES SITTING RIGHT HERE AND WHAT YOU BUY THEIR DATA FROM. I'M TALKING ABOUT MANY MULTIPLES. I'M NOT SAYING 

>> CUSTOMER CHOICE, RIGHT?

>> IT IS CUSTOMER CHOICE, WE SUBSCRIBE TO THREE OF THE FOUR. I'M NOT SAYING EVERYBODY SHOULD PAY THE SAME PRICE BUT THERE DOES NEED TO BE SOME TYPE OF SHIFT OR ELSE I MEAN THE MARKET WILL TAKE CARE OF ITSELF. THAT'S THE ONE THING I FEEL CONFIDENT.

>> YES. THAT'S A GREAT POINT.

>> HERE IN AMERICA.

>> I THINK OVER TIME THE MARKET WILL TAKE CARE OF ITSELF. I MEAN, YOU CAN'T CONTINUE TO CHARGE A MILLION DOLLARS FOR SOMETHING THAT'S WORTH $2. YOU MIGHT SELL IT TO ONE CUSTOMER AND BULLY FOR YOU BUT YOU WON'T SELL IT TO MANY PEOPLE THAT WAY. I THINK COREY IS RIGHT. JUST THE SAME AS IF HE WAS TRYING TO SELL LNG FOR 30 BUCKS, IT'S NOT GOING TO HAPPEN.

>> WE'RE HAPPY TO DO ON ICE TO THE EXTENT 

>> IT WILL BE LISTED TOMORROW, I PROMISE. IN GENERAL, I THINK WE'RE ALL MOSTLY FREE MARKET PEOPLE UP HERE, AND I THINK WE ALL ACKNOWLEDGE THAT TYPICALLY BUSINESS WILL GO WHERE SMART MONEY GOES, AND HISTORICALLY THAT'S THE WAY IT'S WORKED. I'M SYMPATHETIC TO THE PROBLEM OF THE HIGHEST CONTRIBUTING PERCENTAGE FOLKS OF THE INDICES. I DON'T HAVE A GREAT SOLVE FOR THAT. AGAIN, THOUGH, WITH A LITTLE PATIENCE WHAT WE MIGHT SEE IS WHEN PLATTS BEGINS TO INCORPORATE A LOT MORE DATA THAN THEY EVER HAD, YOU MIGHT SEE SOME RELIANCE ON TOP TIER PROVIDERS GO AWAY. AGAIN, I'LL COME BACK TO I THINK IT'S IMPORTANT YOU SEPARATE THE PROBLEMS. I'M NOT SURE IF THERE IS A PROBLEM IN THE DAILY MARKET. AND I'LL LET SOME OTHER PEOPLE COMMENT ON THAT. AGAIN, IT COMES BACK TO THERE'S A BIGGER PROBLEM IN BID WEEK. THERE'S SOMETHING THAT WE MAYBE AS EXCHANGES CAN ENCOURAGE PEOPLE TO TRADE FIXED PRICE ON THE SCREEN TO PROVIDE MORE TRANSPARENCY. WE'LL CERTAINLY THINK ABOUT THAT. IT'S IN MY OWN BEST INTEREST ANYWAY. AND THEN THE CUSTOMERS. BUT LET'S NOT OVERREGULATE THINGS WHERE THERE ARE NO PROBLEMS. THAT'S FOR SURE.

>> WE'RE TALKING ABOUT UNINTENDED CONSEQUENCES, I WANT TO SHIFT GEARS A LITTLE BIT. STILL A CONSEQUENCE OF THE PLATTS ICL, HOW PRICE REPORTERS COULD BE AFFECTED, ACTUAL PEOPLE REPORTING THEIR PRICES TO INDEX DEVELOPER, HOW THEY REPORTING, OR NOT REPORTING, HOW OUR POLICY STATEMENT AND/OR OUR FORM 552 INSTRUCTIONS COULD BE AFFECTED BY ENTITIES WHO ARE CURRENTLY NONREPORTERS WHO ARE NOW  WHO NOW HAVE TRADES GOING INTO THE PLATTS INDEX AND WHAT DOES THAT MEAN FOR OUR POLICY STATEMENT AND FOR THE FORM 552 AND IF ANYONE HAS THOUGHT ABOUT THAT.

>> WE'VE THOUGHT A LOT ABOUT IT.

>> OKAY.

>> THE GOOD NEWS IS THERE'S PRECEDENT. WE'VE BEEN DOING THIS EXACTLY SAME MODEL WITH NGI SINCE 2007. SO YOU GUYS KNOW BETTER HAVE THERE BEEN ISSUES. NONE COME TO MIND. THEY ARE REAL MARKET TRANSACTIONS THAT HAPPEN ON THIS SCREEN. WE NOTIFY EVERYBODY TO CANCEL TRANSACTIONS, PEOPLE DO IT EVERY DAY, MAKE SURE THEY DON'T SHOW UP IN THE INDEX, ET CETERA. WHAT WE PROVIDE TO PLATTS IS ANONYMOUS DATA AND WE ONLY IDENTIFY THEIR PRICE REPORTERS BASED ON THEIR PRICE REPORTERS SAYING  TELLING ME, HEY, PLEASE LET PLATTS KNOW MY TRADES ARE IN THIS DATA. THAT ALLOWS PLATTS TO, ONE, NOT DOUBLE COUNT IT, NGI THE SAME THING. BUT IT ALSO  IT MAINTAINS THAT THESE ARE A UNIQUE SUBSET. THESE ARE THE PRICE REPORTERS. THEY ARE NOT JUST THE ANONYMOUS GUYS ON THE OTHER SIDE OF THE TRADE. THE ANONYMOUS GUYS ON THE OTHER SIDE OF THE TRADE, THERE ARE 250ODD MORE OF THEM THAN PRICE REPORTERS TYPICALLY. AND SO AGAIN YOU'RE GOING TO SEE A LOT MORE TOTAL VOLUME. SOMEBODY DID MENTION THE THIRD PARTY ISSUE. AGAIN, WE'VE BEEN DOING THIS NOW FOR TEN YEARS, AT MINIMUM, WITH NGI, PUBLISHING OUR OWN INDICES AND AUDITED. IF YOU WANT FURTHER CONVERSATION ON THE SIDE 

>> VINCE?

>> THIS IS MORE A QUESTION THAN COMMENT. IT OCCURS TO ME UNDER THE ARRANGEMENT ICE HAS WITH PLATTS, YOU KNOW, SOME MARKET PARTICIPANTS BECOME VOLUNTARY PRICE REPORTERS, AND THEY DO SOMETHING THEY WOULDN'T OTHERWISE CHOOSE TO DO. AND TO THE EXTENT THEY TRANSACT ALSO, ONLY A SUBSET OF TRANSACTION IS REPORTED TO THE INDEX PUBLISHERS. AND TO VIOLATE ANOTHER RULE, INDIRECTLY, ALL THE TRANSACTIONS EXECUTED BY A GIVEN PARTY SHOULD BE REFLECTED IN THE INDEX, DID YOU GIVE SOME THOUGHT TO THIS PROBLEM?

>> YES. LET ME COMMENT ON THE SECOND PART FIRST. I BELIEVE THE RULE YOU'RE REFERENCED IF YOU'RE A PRICE REPORTER YOU MUST REPORT ALL TRADES. THERE'S NOT A RULE THAT IF YOU TRADE IN A GIVEN MARKET YOU MUST TRADE ALL OF YOUR TRADES ON THAT MARKET. RIGHT? NO DIFFERENT THAN IF ORLANDO TRADES ON ICE, I WISH HE HAD TO TRADE EVERYTHING ON ICE BUT I KNOW HE'S ALSO GOING TO TRADE ON CME SOMETIMES. SORRY TO PICK ON YOU, ORLANDO, YOU'RE THE CLOSEST. WE DID THINK ABOUT THAT. WHAT WE ALSO THOUGHT ABOUT WAS THAT AN INDEX IS NOT ALWAYS PERFECT. VERY FEW INDICES ARE PERFECT. INDICES ARE MEANT TO BE INDICATIVE, MEANT TO BE REPRESENTATIVE OF THE MARKET PRICE THAT DAY. IS IT A PERFECT PRICE DOWN TO THE PENNY? ABSOLUTELY NOT. ANYBODY THAT TELLS YOU IT'S PERFECT IS CRAZY. IT'S REPRESENTATIVE OF THE BASIC VALUE OF THAT COMMODITY ON A GIVEN DAY. JUST AS DREW MENTIONED, WHEN CUSTOMERS MAKE THE CHOICE TO TRANSACT AGAINST AN INDEX, THEY ARE TAKING INTO ACCOUNT THE FACT THAT IT'S NOT A PERFECT PRICE. IT'S A REPRESENTATIVE MARKET PRICE. THEY ARE COMFORTABLE WITH THE PRICE GIVEN EVEN IF IT IS NOT PERFECT. INTERESTINGLY, WHEN WE THINK ABOUT LNPs, EVERY ISO HAS ITS OWN CONFIDENCE LEVEL AS WELL. HAVING RUN OUR POWER MARKETS FOR SEVERAL YEARS IN FUTURES, THE OPINION OF ISO PRICES PRODUCED VARIES WIDELY, AND COMMENTS ON PEOPLE ABOUT IS THIS ONE GOOD, IS THAT ONE GOOD, PERFECT HERE, PERFECT THERE, AGAIN, IT'S NOT PERFECT. IT'S BEST EFFORT TO PROVIDE AN INDICATIVE MARKET PRICE. AND I MAY GET SKEWERED ON THAT BECAUSE IT'S SUPPOSED TO BE PERFECT, BUT I DON'T KNOW IF MARKET PARTICIPANTS NECESSARILY EXPECT PERFECTION, SO MUCH AS THEY EXPECT CONSISTENCY. IF YOUR FORMULA SAYS A PLUS B EQUALS C, IT BETTER EQUAL C EVERY TIME I PUT IT IN THE EQUATION. THAT'S WHAT PEOPLE WANT TO SEE. DID I COVER YOUR QUESTIONS, VINCE? I GOT OFF TANGENTIALLY.

>> SPECIFICALLY ICE'S DATA, VINCE'S COMMENT ABOUT FOLKS INVOLUNTARILY PARTICIPATING IN INDICES WE THOUGHT LONG AND HARD ABOUT USE OF THIRD PARTY DATA, PARTICULARLY AROUND WHEN WE RECEIVE AN EXCHANGE RATE FROM ICE AND RECEIVE THAT SAME TRADE FROM PRICE REPORTER WHAT DO WE USE? WE'VE THOUGHT ABOUT THAT IN TERMS OF CONSIDERATION OF FERC POLICY STATEMENT, NOT ONLY IN TERMS OF OUR ABILITY TO BE IN COMPLIANCE BUT ALSO PRICE REPORTER THEMSELVES. AND THE BASIS FOR OUR FINAL INDICES IS PRICE REPORTER DATA SUBMITTED DIRECTLY TO PLATTS. THAT WILL BE SUPPLEMENTED BY ANONYMOUS NONPRICE REPORTED DATA RECEIVED FROM ICE. OKAY. SO WE HAVE THOUGHT ABOUT THAT. IN TERMS OF VERIFIABILITY, THE IDEA OF PRICE REPORTER SENDS US A TRADE, WE KNOW WHO THAT PERSON IS, WE CAN PICK UP THE PHONE AND CALL AND ASK QUESTIONS ABOUT A TRANSACTION. WE DON'T HAVE THE SAME MECHANISM WITH ICE DATA THAT'S ANONYMOUSLY REPORTED TO US. BUT WE DO HAVE  WE VIEW THAT DATA DIFFERENTLY BECAUSE OF THE TRANSPARENT NATURE OF THE ICE EXCHANGE. AND THAT BIDS AND OFFERS ARE SEEN BY MARKET PARTICIPANTS AND TRANSACTIONS ARE VIEWED BY MARKET PARTICIPANTS AS WELL. IN OUR MIND THAT'S DIFFERENT THAN A TRADE WHERE TENASKA WOULD CALL UP ONE OF ORLANDO'S TRADERS AND DO A TRADE ON THE PHONE. WE'VE CONSIDERED ALL THAT. WE'VE HAD TO CHANGE SOME OF OUR PRICE REPORTING REQUIREMENTS OF OUR PRICE REPORTERS IN ORDER TO ENSURE THAT NOT ONLY OURSELVES BUT PRICE REPORTERS WITH COMPLIANT WITH THE FERC STATEMENT BECAUSE WHAT WE WOULDN'T WANT TO DO IS CREATE METHODOLOGY OR PROCESSES THAT, A, CREATE DOUBT IN THE MINDS OF PRICE REPORTERS, OR, TWO, BRING PERCEIVED INCREASED RISK TO PRICE REPORTING PROCESS BECAUSE THAT WOULDN'T BE GOOD FOR ANYBODY.

>> JUST TO FOLLOW UP ON WHAT HE'S SAYING, I'M CURIOUS, CAN I ASK A DIRECT QUESTION? ARE YOU WEIGHTING THESE PRICES LIKE ANY OTHER PRICE?

>> WE ARE STILL IN DELIBERATION IN TERMS OF OUR METHODOLOGY AND HOW THE TRANSACTIONS WILL BE WEIGHTED. YEAH, WE'RE GATHERING FEEDBACK FROM THE MARKET IN TERMS OF HOW YOU WOULD HANDLE AN ICE TRADE VERSUS A NONICE TRADE.

>> WELL, WHAT I SAID THIS MORNING, THESE AREN'T PRICES BEING REPORTED. THESE ARE PRICES BEING GLEANED BY PLATTS. THEY ARE ANONYMOUS PRICES. YOU'RE TREATING THEM AS IF THEY ARE PRICES BEING REPORTED TO YOU IN GOOD FAITH BY SOMEONE AND YOU COULD FOLLOW UP ON THAT PRICE. OR MAYBE YOU'LL KICK THE PRICE IF YOU DON'T LIKE IT SINCE YOU DON'T KNOW WHERE IT CAME FROM. I'M ALL FOR IT. YOU CAN DO THIS. I WOULD REMIND YOU THOUGH THAT YOU'RE CORNERING AN EXCLUSIVEITY INTO YOUR INDEX. AND I DON'T KNOW, I THINK THERE SHOULD BE SOME QUESTIONS THERE. BUT, YOU KNOW, I'M JUST SAYING SOME OF THE THINGS THAT I WOULD HAVE A PROBLEM WITH, BUT THEY CAN DO WHAT THEY WANT. BUT I'M GOING TO GO BACK TO MY ORIGINAL ARGUMENT THAT, YOU KNOW, WE SHOULDN'T BE LOOKING FOR A SYSTEM THAT'S GOING TO HAVE THE TOP TIER REPORTING PARTIES DROPPING OUT, NUMBER ONE, AS YOU INDICATED THEY MIGHT. AND WE SHOULD HAVE A SYSTEM THAT UP THAT HAS A ROBUST PRICE DISCOVERY FOR A LARGE NUMBER OF PRICE REPORTING ENTITIES, BECAUSE, YOU KNOW, IT MAY BE THAT SOMEBODY, YOU KNOW, SHOULDN'T BE PAYING, YOU KNOW, FOR A BMW WHAT THEY PAY FOR A HONDA BUT SOMEONE MAY NEED A HONDA INSTEAD OF A BMW. SO, YOU KNOW, THERE SHOULD BE SOME CHOICES IN THE MARKET THAT ARE AVAILABLE FOR THE ENTIRE MARKET. AND THE ENTIRE MARKET ISN'T THE SAME. YOU NEED TO BE THINKING ABOUT ALL THE PLAYERS OUT THERE WHO USE THIS MATERIAL, USE THESE INDICES FOR INFORMATIONAL PURPOSES OR WHATEVER THEY WANT TO USE IT FOR BUT IT SHOULD BE AVAILABLE. THE IDEA THAT YOU MIGHT HAVE TO PAY, YOU KNOW, PLATTS NOW FOR ICE INFORMATION THAT'S NOW FREE, THAT'S FINE, IF THEY WANT TO DO THAT BUT I'M SAYING THERE SHOULD BE, YOU KNOW, SOME INFORMATION OUT THERE THAT PEOPLE CAN GLEAN FOR MORE THAN JUST ONE SOURCE IN THE END. THE MARKET CONCENTRATION ISN'T NECESSARILY THE HEALTHIEST THING. THANK YOU.

>> GO AHEAD, MARK.

>> YEAH. TO COUNTER THE COMMENT FROM TOM, TRADING AROUND THE USE OF ICE EXCHANGE DATA. YES, VERIFIABILITY IS DIFFERENT THAN NONICE PRICE REPORTED DATA BECAUSE IT IS ANONYMOUS. HOWEVER THE MANNER IN WHICH THAT TRANSACTION CAME TO BE IS DIFFERENT. IT IS MUCH MORE TRANSPARENT. AND I THINK THAT IS WHAT IS THE DIFFERENTIATING FACTOR IN OUR ABILITY TO SAY WITH CONFIDENCE THAT TRANSACTION OCCURRED IN VIEW OF THE OPEN MARKET. AND FINALLY, OUR METHODOLOGY ALSO DOES PROVIDE US WITH ABILITY TO NOT USE AN ICE EXCHANGE TRANSACTION IF WE FEEL LIKE IT DOESN'T FIT WITH OTHER TRANSACTIONS THAT WE'RE SEEING FOR THAT LOCATION.

>> YOU THINK JUST THE REPORTING PROCESS.

>> YES.

>> YOU'LL USE IT  (INAUDIBLE) 

>> WE WILL TREAT IT LIKE ANY OTHER TRANSACTION, THAT'S CORRECT. OUR METHODOLOGY, WE WILL SCRUTINIZE AS WE DO EVERY OTHER ONE WE RECEIVE FROM PRICE REPORTERS.

>> I THINK JOE IS NEXT UNLESS YOU HAVE A POINT.

>> (INAUDIBLE).

>> THANKS, JOE. I OWE YOU ONE. I GUESS I'M SURPRISED A LITTLE BIT BY TOM'S COMMENTS BECAUSE I THINK WE HEARD ON THE PANEL EARLIER THAT HE WAS ARGUING THAT HE WANTS ACCESSIBILITY TO ALL THE EXCHANGE DATA, JUST AS EVERYBODY ELSE MIGHT HAVE THE OPPORTUNITY TO GET THAT DATA. BUT NOW WE'RE DRAWING INTO QUESTION THE VALUE OF THAT DATA. INTERESTINGLY, AND I'LL FREELY ADMIT I HAVE BOOK BIAS HERE, I WILL HOLD UP ICE TRANSACTIONS TRANSACTED ON THE EXCHANGE IN FRONT OF THOUSANDS OF USERS AS A HIGHER QUALITY DATA THAN ANY REPORTED DATA. NO OFFENSE TO ANY PRICE REPORTERS. OKAY. I KNOW PRICE REPORTERS MAKE EVERY EFFORT TO BE PERFECT. BUT THE FACT THAT THOUSANDS OF PEOPLE, MAYBE IF WE WANT TO BE  YOU KNOW, HUNDREDS ARE PEOPLE ARE VIEWING PRICES IN REAL TIME, HAVE THE OPPORTUNITY TO TAKE REAL RISK CREATING TRANSPARENT PRICES TO BE CALCULATED EVERY DAY IS POWERFUL. PRICE REPORTER DATA IS ALSO VERY HIGH QUALITY. SO WE'RE ARGUING ABOUT MERCEDES VERSUS BMW, IN MY OPINION, BUT THE REALITY OF IT IS THAT THERE CAN BE ERRORS, RIGHT? WE'RE TALKING ABOUT AUDITS. WE'RE TALKING ABOUT ALL THOSE THINGS. THERE IS ONE PERFECT AUDIT TRAIL, THAT'S THE EXCHANGE TRANSACTION. IT HAS COUNTERPARTIES, EXACT MILLISECOND AND CIRCUMSTANCES, ALL THAT DATA. IT'S SITTING THERE IN A COMPUTER FOR YEARS AND YEARS AND YEARS. IT'S VERY EASY, AS YOU GUYS KNOW ANYTIME YOU HAVE AN ISSUE YOU SUBPOENA OUR DATA FROM US. I DON'T THINK THAT WE NEED TO ARGUE THE MERITS OF ICE TRANSACTION DATA VERSUS PRICE REPORTER DATA. I THINK IT'S A A FOOL'S EARNED BUT WILL STICK UP FOR ICE TRANSACTION DATA. I THINK IT'S HIGH QUALITY.

>> SO WOULD I.

>> SO I HAVE MY OWN GRATUITOUS COMMENT. SO WOULD I. I'M SURPRISED TO HEAR PLATTS IS GOING TO START PICKING AND CHOOSING WHICH ICE DATA TO USE. ICE DATA IS THE DATA YOU SAID, YOU CHARACTERIZED IT RIGHT, REAL MARKET DATA. SHOULD JUST USE IT. I WANT TO RESPOND NOT SO KINDLY TO SOMETHING YOU SAID BEFORE. [LAUGHTER] TO COMPARE AN INDEX BASED ON 10% OF PARTICIPANTS AND YOU DON'T KNOW WHO HER AND DON'T KNOW, IT COULD BE ONE, CAN BE 10% OF TRANSACTIONS, YOU HAVE NO IDEA WHETHER IT'S BIASED TO THE PGN MARKET, YOU KNOW ME, YOU DON'T SAY PGN IS PERFECT BUT TO COMPARE THE TWO, I CAN'T GET INTO THE FANCY CAR OR COMPARISONS, BUT IT'S YOUR MERCEDES AGAINST, I DON'T KNOW, A TRICYCLE, THE PBN MARKET HAS ALL THE DATA, NO QUESTION ABOUT COMPARING THE TWO.

>> IT WAS NOT IN PARTICULAR DIRECTED 

>> I'M TALK BECOME CLEARING MARKETS EVERY TRANSACTION IN THERE, YOU CAN'T COMPARE IT TO AN INDEX. IT'S NOT EVEN CLOSE.

>> WE GOT STARTED ON THAT ROAD WHEN WE WERE TALKING ABOUT TRANSPARENCY AND WHAT MAKES UP AN INDEX, ET CETERA. SO I GUESS MORE MY TRAIN OF THOUGHT WAS THAT I HEAR COMPLAINTS ABOUT TRANSPARENCY AND PRICES

>> SAYING LNP IS NOT TRANSPARENT? I'M SHOCKED. NO, IT'S NOT. I AGREE IT'S NOT.

>> THAT WAS IT. THANKS. [ NO AUDIO ]

>> THE POINT ABOUT THE EXCLUSIVEITY OF PROVIDING THIS INFORMATION, MY ONLY POINT IS THAT, YOU KNOW, I DON'T HAVE ACCESS TO THAT INFORMATION. NO ONE IS REPORTING IT TO ME. NO ONE IS REALLY REPORTING IT TO PLATTS. THEY ARE GLEANING IT OFF THIS PLATFORM, AND IT'S BLIND INFORMATION. IF I HAD ACCESS I WOULD HAVE TO CONSIDER HOW I WOULD USE IT JUST LIKE MARK IS COMING UP WITH WAYS TO USE IT. I'M JUST SAYING THOUGH THAT, NUMBER ONE, IT'S EXCLUSIVE TO PLATTS, AND TO NGI. IT'S NOT AVAILABLE TO US OR ARGUS. AND THAT, YOU KNOW, THE WAY YOU USE IT IS A FACTOR. AND THE FACT THAT THIS ISN'T A REPORTED TRADE, THIS ISN'T SOMETHING BEING REPORTED TO PLATTS, IT'S SOMETHING BEING GLEANED BY PLATTS IN THE THIRD PARTY PROVIDER, WHICH IS GIVING THEM THE INFORMATION, IS JUST SOMETHING I'M JUST THROWING OUT. I'M NOT SAYING IT'S WRONG. I'M NOT SAYING IT WILL CREATE AN INCORRECT  I'M SURE IT WILL BE, YOU KNOW, A WEIGHTED AVERAGE, THE WAY WEIGHTED AVERAGES WORK I'M SURE IT WILL BE FINE. YOU KNOW, IF YOU'RE CAREFUL ABOUT HOW YOU USE IT AND YOU WANT TO HAVE VERIFIABILITY, IT'S A LITTLE DEPARTURE FROM THE WAY, YOU KNOW, THE PRICE REPORTING'S BEEN DONE BY  I USED TO BE A PLATTS MARKETS EDITOR AT THAT TIME. I'M JUST TALKING, YOU KNOW, FROM EXPERIENCE. SO THAT'S ALL I'VE GOT TO SAY ABOUT IT.

>> ONE THING WE TALKED ABOUT THIS MORNING WERE ADDITIONAL STANDARDS THAT EUROPE HAD IMPLEMENTED FOR PRICE REPORTERS AND I WANTED TO TALK ABOUT IS THERE A PLACE FOR SOMEBODY TO BE RESPONSIBLE FOR CREATING NEW STANDARDS HERE IN THE U.S., FOR LIQUIDITY, SAY LIQUIDITY STANDARDS. DOES ANYBODY HAVE ANY THOUGHTS ON THAT?

>> WHEN YOU SAY STANDARDS, ARE YOU SAYING THRESHOLDS, THAT'S WHAT WE TALKED ABOUT?

>> YES.

>> SO A MINIMUM VOLUME THRESHOLD OR SOMETHING, IS THAT WHAT YOU WERE ALLUDING TO?

>> YES.

>> SO AGAIN I'M BEATING A DEAD HORSE. WE'VE HEARD ENOUGH. BUT ANYTHING WILL HELP. WHERE I'M COMING FROM, MORE VOLUME HELPS US. BP, THAT'S WHAT WE'RE COMING FROM. I APPRECIATE EVERYONE'S TALKED ABOUT, YOU KNOW, THE ICEPLATTS SITUATION OR AGREEMENT WHICH AGAIN IN A WAY, GOING BACK, JC, NO ONE LIKES MANDATORY, IN A WAY YOU'RE PUTTING THOSE  YOU'RE FORCING THE HAND A BIT ON PEOPLE DOING ICE TODAY, YOU'RE FORCING THE HAND. THE FACT NOW THEY DO ICE TODAY, THAT'S GOING TO GET REPORTED, WHATEVER WORD YOU USE, REPORTED INTO  YOU'R FORCING THEIR HAND, MAY NOT CALL IT MANDATORY BUT YOU'RE FORCING THEIR HAND. NO DIFFERENT IF YOU'RE A MARKETER YOU REPORT. WE'RE GOING BACK TO THAT. TO ANSWER YOUR QUESTION, IF THERE'S A THRESHOLD, THAT COULD HELP. THAT, YOU KNOW, AGAIN I'M NOT IN ANY WAY  I NEED HELP FROM COLLEAGUES AROUND THE TABLE, HOW YOU GENERATE THAT. BUT IF THERE'S ONE COUNTER PARTY THAT'S AT A POINT, THEY ARE THE ONLY ONES THERE, AND I KNOW DREW MENTIONED, YOU KNOW, TENASKA AND OTHERS WILL SAY I'M NOT TO TRADE THERE, YOU ALWAYS HAVE THAT OPTION. YOU HAVE A CUSTOMER, OUR BUSINESS IS TO MAKE FAIR MARKETS FOR OUR CUSTOMERS. WE HAVE 33,000 CUSTOMERS IN THE U.S., AND ALL INDUSTRIAL UTILITY IPPs, THEY WANT A MARKET AT CERTAIN AREAS AND WE'RE GOING TO MAKE A MARKET FOR THEM, A FAIR MARKET. SO IT'S NOT THAT EASY FOR US, IT'S NOT THAT EASY FROM MY PERSPECTIVE, SO, YEAH, I NEED SOME HELP TO SAY, WELL, BP AND TENASKA ARE THE ONLY TWO AT THIS POINT, THE TOP TWO PRICE REPORTERS, ACCORDING TO THIS DATA FROM PLATTS, ICE AND PLATTS, THEN  AND IT'S 40 A DAY, IS THAT OKAY? AVERAGE DIVEDDED BY TWO, IS THAT GOOD ENOUGH? I DON'T KNOW. BUT AGAIN ANYTHING THAT WE CAN COME UP WITH TO HELP, I THINK WE NEED TO PUT  I KEEP GOING BACK IT TO  SOME MORE TEETH TO IT. THE WORD "ENCOURAGE" DOESN'T DO IT FOR ME.

>> VINCE, YOU WERE NEXT.

>> I WAS ASKED THIS QUESTION DIRECTLY IN THE MORNING SO I WOULD LIKE TO REITERATE MY POSITION. I THINK THERE IS A DIFFERENCE BETWEEN LIQUIDITY THRESHOLDS IN THE CASE OF PIPELINE, AND BILATERAL TRANSACTION. IN THE CASE OF BILATERAL TRANSACTION TWO CONSENTING ADULTS HAVE THE RIGHT TO ASSESS THE INDEX AND MAKE A DECISION, WAS THERE THE INDEX MEETS THEIR STANDARDS AND WHETHER IT'S IN THEIR MUTUAL INTEREST TO RELY ON THE INDEX. AND I AM AFRAID, YOU KNOW, THAT INTRODUCING LIQUIDITY THRESHOLDS, YOU KNOW, COULD HAVE UNINTENDED CONSEQUENCES, CREATE DOWNWARD SPIRAL BECAUSE ONCE THE INDEX DOESN'T MEAN CERTAIN QUALITY CRITERIA, YOU KNOW, IT'S EFFECTIVE SUPPRESSES LIQUIDITY AND MAKES THE SITUATION EVEN WORSE.

>> FOR WHATEVER THEY ARE WORTH THE THRESHOLDS ARE THERE THAT YOU HAVE NOW. I THINK AS FAR AS PIPELINE CHARACTERISTICS ARE CONCERNED IF A POINT IS NOT LIQUID AND YOU DISCOVER THROUGH ANALYTICS YOU'VE GOT 13 POINTS, PUBLISH THAT, LET US KNOW AND WE CAN LOOK AT IT. BUT OUR CUSTOMERS WILL TELL US. I MEAN, THEY WILL TELL US THAT'S NO LONGER VALID. AND WE'VE HAD THAT HAPPEN OVER THE YEARS, MANY, MANY TIMES. AND THE MARKET DOES SHIFT AND POINTS BECOME ILLIQUID AND WE MAKE CHANGES. ON THE BILATERAL MARKET WE'VE GOT OTHER DATA. WE WILL LOOK AT IF PLATTS DOES AN ASSESSMENT, WE'LL DECIDE WHETHER OR NOT WE WANT TO USE IT AND BILATERAL, TWO PARTIES WILL DECIDE, OR WE'LL LOOK AT THE HISTORY AND WE'LL FIGURE WHAT IT'S NORMALLY TRADED AT, WINTER OR SUMMER DEAL, OR SHOULDER MONTH DEAL. THE MARKET IS VERY CAPABLE OF PRICING. WE DON'T NEED MANDATED GOVERNMENT STANDARDS HOW TO SET A PRICE OR WHETHER AN ASSESSMENT IS VALID AND INDICES ARE NOT ALL THAT'S USED. TO THE EXTENT WE HAVE CONFIDENCE, IT'S EASY FROM AN ARBITRATION OR MEDIATION STANDPOINT, THERE'S A LOT OF REASONS WE USE THEM. AS I SAID, ACCESS TO DATA THAT'S DEVELOPED ON AN EXCHANGE TO MORE PARTIES WILL CREATE MORE INDICES AND YOU'LL HAVE MORE CONFIDENCE ON CORRELATION AS TO HOW VALID THE INDICES ARE. IF PEOPLE WANT TO SCARE UP AS PLATTS AND NGI AND OTHERS HAVE DONE PEOPLE TO DIRECT REPORT TO THEM, THEY CAN GO OUT AND DEVELOP THOSE INDICES. THERE'S NOTHING PROHIBITING IT. THEY CAN COME TALK TO KINDER MORGAN ABOUT REPORTING AS WELL. I DON'T THINK WE NEED GOVERNMENT MANDATES. I REALLY DON'T.

>> I HAVE A FOLLOWUP QUESTION TO THAT BUT J.C. YOU CAN GO. IS PEER PRESSURE NOT WORKING? I HEAR WE NEED TO ENCOURAGE, I HEAR THAT SOME ENCOURAGEMENT HAS TO HAPPEN. DO YOU TALK WITH EACH OTHER AND ENCOURAGING?

>> YOUR ENCOURAGEMENT TENDS TO BE FOR FORCEFUL.

>> I KNOW, BUT I'M TRYING TO FIND A BALANCE BETWEEN  YEAH.

>> WE HAVE RECOMMENDED REFOCUSING AND MAKING THE SAFE HARBOR RECENT MARKET EVENTS SAFE AND TRANSPARENT AS TO HOW SAFE. AND WHAT MANY OF US HAVE SHARED CONCERNS OVER HOW YOU AUDIT THE MARKET. SOME OF THAT CAN ENCOURAGE PEOPLE TO REPORT. HAVE YOU NINE BIG COMPANIES THAT CAN WITH STAND IT BUT RIGHT WHY BOTHER IF WE'RE LOOKING AT A $400 MILLION PENALTY, OR I'M LOOKING AT A MILLION AND A HALF DOLLARS TO DEFEND AN AUDIT. I MEAN, FOR SOME PEOPLE IT JUST DOESN'T MAKE SENSE.

>> J.C.?

>> THANK YOU. JUST FOR THE RECORD ON THE TOPIC OF THE EXCHANGE PROVIDING ITS DATA, WE, ONE, CONTINUE TO PROVIDE OUR DATA TO ALL OF OUR CUSTOMERS, ALL THE REGULATORS THAT ASK FOR IT. THAT'S NOT GOING TO CHANGE IN THE PLATTS AGREEMENT. WE'LL CONTINUE TO PROVIDE THOSE REPORTS. IN TERMS OF LICENSING THE DATA TO PLATTS OR NGI OR ANY OTHER THIRD PARTY, THAT'S OUR CHOICE AS A BUSINESS TO TAKE A COMMODITY WE HAVE, WHICH IS DATA AND LICENSE TO SOMEBODY, NO DIFFERENT THAN TOM'S DECISION TO SELL HIS DATA TO SOMEBODY ELSE. I DON'T THINK IT'S NECESSARILY APPLES AND ORANGES, IT'S SIMILAR. A BIT DISINGENUOUS TO ARGUE THAT WE HAVEN'T SOLD OUR DATA TO HIM, CERTAINLY THERE'S A PRICE FOR EVERYTHING I SUPPOSE. WE BELIEVE THERE IS STILL COMPETITION IN THE INDEX SPACE, JUST AS CURT POINTED OUT, NOTHING PREVENTING A NEW THIRD PARTY, TOM, COMING IN AND CONVINCING 100 PEOPLE TO REPORT TO HIM. THAT WOULD BE PRETTY QUALITY DATA. I'D BE VERY EXCITED TO SEE IT. I'M SURE SOME PEOPLE AT THIS TABLE WOULD BE HAPPY TO SEE THAT AS WELL. SO WE'RE  AGAIN, I THINK THAT SOME OF THE THINGS THAT HAVE BEEN REITERATED HERE OVER AND OVER, THE SAFE HARBOR CHANGES, PERHAPS CLARIFYING DAILY VERSUS MONTHLY, THERE'S SMALL CHANGES THAT FERC CAN PROBABLY PUSH FORWARD THAT WILL MAKE A LOT OF PEOPLE HAPPY. SOME CHANGES COULD BE MADE AND THEN WE CAN OBSERVE WHAT HAPPENS OVER THE NEXT SIX MONTHS, 12 MONTHS, AND SEE IF THERE'S POSITIVE EFFECTS. YOU HAVE A SHIFT WITH PRICE REPORTERS, I.E. ICE AND PLATTS, ICE AND NGI. THE LANDSCAPE IS CHANGING. LET'S MEET IN A YEAR AND SEE IF IT'S BETTER. HOPEFULLY THE ANSWER IS YES AND HOPEFULLY THAT'S ENOUGH FOR SOME GUYS WITH REAL WORLD PROBLEMS EVERY DAY, AGAIN, I'M SYMPATHETIC BUT I'M CONCERNED ABOUT ADDING ADDITIONAL BURDEN IN THE FORM OF MANDATE.

>> THANK YOU. I GOT OFF THE SUBJECT OF THE MANDATORY LIQUIDITY THRESHOLDS AND J.C. BROUGHT US BACK, WHICH IS GOOD. I WANTED TO MAKE SURE I'M UNDERSTANDING WHAT THAT MEANS BEFORE I REACT TO WHAT ORLANDO AND DR. KAMINSKI AND CURT SAID. THE WAY I UNDERSTAND THE CURRENT MANDATORY MINIMUM THRESHOLDS, IF LIQUIDITY DROPS, LET'S THINK ABOUT A MONTHLY CASHOUT FOR A PIPE, THE PIPE HAS ITS INDEX REFERENCED AS HOUSTON SHIP CHANNEL, FALLS BELOW THE MANDATORY, 25,000 OR TEN TRADES OR TEN COUNTERPARTIES, IF YOU GET TO THE END OF THE MONTH AND IF IT'S BELOW THAT THRESHOLD THE PIPE AND ITS COUNTER PARTY THAT NEEDS TO BE CASHED OUT WILL NEGOTIATE SOME ALTERNATIVE. IS THAT THE WAY IT WORKS? OKAY. SIMILAR IF WE HAVE A REFERENCE TO SHIP CHANNEL AND PLATTS OR NGI DOESN'T PUBLIC A PRICE WE NEED TO RENEGOTIATE PRICE. MY CONCERN THAT'S APPLICABLE TO THE PIPE AND ISO TARIFFS TO PHYSICAL TRADING IN GENERAL THAT'S GOING TO CREATE MORE BURDEN FOR TRADERS WHEN THEY FIND OUT THE STACK OF CONTRACTS THAT THEY HAVE IN PLACE REFERENCING SHIP CHANNEL, TO STICK WITH MY EXAMPLE, ARE NO LONGER CAPABLE OF BEING CLOSED THAT DAY BECAUSE THE SHIP CHANNEL INDEX IS BELOW 25,000 OR TEN THRESHOLD AND IS UNUSABLE. WE HAVE WORK TO FIX THAT. I'M SENSITIVE TO ORLANDO'S POINT TO GET MORE PEOPLE TRADING FIXED PRICE, PRICE REPORTING. THIS MAY IMPOSE A ONESIZEFITSALL LIQUIDITY TRIP WIRE ON THE ENTIRE INDUSTRY.

>> WELL SAID, YOU STOLE MY THUNDER. I THINK THE IDEA OF LIQUIDITY THRESHOLDS IS DIFFICULT BECAUSE IF YOU HEAD TO SOMEONE THAT IF THEY SIGNED A TENYEAR AGREEMENT EIGHT OR NINE YEARS AGO FOR CERTAIN GULF COAST LOCATIONS WOULD BE HAVING LIQUIDITY ISSUES, SEVERAL YEARS LATER THEY WOULDN'T BELIEVE YOU. WE'VE TALKED ABOUT THE LOW PRICE ENVIRONMENT WE'VE SEEN, LOW VOLATILITY, BUT FROM FLOW AND PRODUCTION OF GAS IN NORTH AMERICA THAT HAS CHANGED DRAMATICALLY. SO I THINK THAT THAT'S PART OF THE INCREASE IN LIQUIDITY OR DECREASE IN LIQUIDITY, JUST PART OF THE GENERAL EBB AND FLOW OF THIS INDUSTRY AS IT EVOLVES AND WHERE PEOPLE CHOOSE TO TRADE NATURAL GAS. I THINK THAT SORT OF TRIP WIRES YOU MENTIONED WOULD BE PROBLEMATIC, A SITUATION AS I SAID BEFORE, YOU LET THE MARKET DECIDE. THE MARKET IS VERY EFFICIENT. EVOLVED OVER TIME. THE PROCESS THAT WE TALKED ABOUT TODAY HAVE PROVEN THAT. TO INTERRUPT THAT PROCESS OR INCLUDE ANY SORT OF MANDATES I THINK WOULD BE HARMFUL TO THE PROCESS AND HAVE SOME UNINTENDED CONSEQUENCES.

>> SO THE THING THAT CONCERNS ME, OR THAT'S IN MY MIND, YOU TALK ABOUT SAFE HARBOR, PROPOSALS, REVISING IT OR REVIEWING IT, THE MONTHLY VERSUS DAILY, J.C. TOUCHED ON AS WELL. THAT'S A ALL GOING TO TAKE TIME, RIGHT? IT'S GOING TO TAKE TIME. YOU SAID SIX MONTHS TO A YEAR BEFORE YOU SEE THE REAL  IT'S GOING TO TAKE TIME. WHAT YOU DON'T WANT, PLEASE DO NOT TAKE IT AS BP SAYING WE'RE GOING TO NOT REPORT. THAT'S NOT WHAT I'M SAYING. WHAT YOU COULD START SEEING IS SOME OTHERS, DON'T REPORT ANYMORE. OR A BIT OF HYBRID, IN SOME POINTS WHERE MARKETS ARE BEING MADE TODAY BY ONE OR TWO OR THREE, THAT'S GONE. NOW THOSE UTILITIES OR LDCs OR CUSTOMERS, SORRY, I'M NOT GOING TO TAKE THAT RISK OR MAKE MARKETS IN THAT AREA. SOME PEOPLE WILL DO THAT. THAT'S GOING TO ELEVATE, CONTINUE TO ELEVATE THE RISK. TIME IS OF THE ESSENCE. I CAME TO THE FERC TWO YEARS AGO, SPOKE TO CHAIRMAN BAY ABOUT THIS AND COMMISSIONER HONORABLE AND COMMISSIONER LAFLEUR. I'VE BEEN HERE. WE'VE BEEN HERE. I'M SURE I'M NOT THE ONLY ONE, HERE FOR TWO YEARS TALKING ABOUT THIS. BECAUSE IT IS  I SAID IT A HUNDRED TIMES BUT SOME OF THESE POINTS YOU'RE GOING TO START SEEING SOME REPORTERS ARE GOING TO SAY FORGET IT. I'M NOT GOING TO MAKE MARKETS HERE. THEN YOU'RE GOING TO START GETTING UTILITIES AND STATE PUCs, YOU KNOW, NOW WE'VE GOT TO USE PROXIES AND ANOTHER INDEX PLUS VARIABLE TO CREATE THIS PRICE AND THEN THE RISK PREMIUMS GO UP BECAUSE NOW YOU'VE GOT RISK YOU'VE GOT TO MANAGE. TIME IS OF THE ESSENCE. AND CAN'T BE A YEAR OR TWO YEARS FOR THIS WOULD BE MY POINT.

>> WE'VE GOT A TOUGH PROBLEM HERE IN THE U.S. GAS MARKETS, AND THERE'S A PROBLEM YOU CAN LOOK TO OTHER MARKETS AROUND THE GLOBE LIKE YOU MENTIONED, EUROPE, YOU CAN LIKE TO IOSCO, BENCHMARKS IN THE LAST FIVE YEARS AND LEARN A LOT AND SOME PRINCIPLES THAT HAVE COME OUT OF THOSE ALONG THE LINES OF MINIMAL DESIRABILITY, I'M SORRY, MINIMUM VOLUME THRESHOLDS YOU WANT TO HAVE TO HAVE AN INDEX BE ROBUST OR STRATEGIC OR DEPENDING ON THE CONTEXT, HOW VIABLE INDEX. AND IN THOSE CONTEXTS, IN THOSE MARKETS THEY HAVE SIMILARITIES TO GAS MARKETS, ALSO A LOT OF DIFFERENCES. TAKE SOMETHING LIKE INTEREST RATES OR BIG FINANCIAL MARKETS, THEY HAVE A STRIP OF PRODUCTS, 12 MONTHS OF PRODUCTS, A SET OF CURRENCIES, THEY DO NOT HAVE IN MANY CASES THE SAME DIVERSITY OF PRICE INDICES YOU HAVE HERE WITH SO MANY DIFFERENT PRICES IN THE U.S., GEOGRAPHICALLY SPREAD, DIFFERENT CHARACTERISTICS AND DIFFERENT DESIRABILITIES, THEY CHANGE OVER TIME. SHALE CHANGED THAT, THE DESIRABILITY OF WHERE PEOPLE WANT TO TRADE, WHERE YOU WANT TO TRADE, IT'S CHANGEED THE PHYSICAL INFRASTRUCTURE, ABILITY TO DELIVER GAS CHANGED, IT'S A DYNAMIC ENVIRONMENT THAT'S NOT NECESSARILY THE SAME AND DOESN'T MEAN THAT THE PRINCIPLES WILL AUTOMATICALLY CARRY OVER FROM OTHER FINANCIAL MARKETS WHICH LEAVES ME TO WONDER, I DON'T KNOW THE ANSWER, IF YOU TRIED TO APPLY MINIMUM VOLUMES THRESHOLDS HERE IN THE U.S., WHAT WOULD THAT MEAN? WOULD THAT MEAN THAT IF FOR SOME PERIOD OF TIME FOR SOME INDEMOCRATIC NATIONAL CONVENTION THE VARIOUS PRAs AROUND THE TABLE, ICE DIDN'T HAVE A CERTAIN AMOUNT OF VOLUME, THEY COULDN'T PUBLISH A PRICE ANYMORE, WHAT HAPPENS TO CONTRACTS ON THOSE PRICES? IT SEEMS TO ME IT COULD INTRODUCE MORE UNCERTAINTY LOOKING FORWARD AND PRICING AND BILLING ASSETS AROUND PARTICULAR POINTS, AND I THINK YOU'VE GOT TO ASK THE QUESTION ABOUT WHETHER OR NOT THE FOLKS HERE AROUND THE TABLE, ORLANDO, DREW, CURT AND SUCH, J.C., WHETHER ENTITIES IN THE MARKET ARE ABLE AND WHETHER THEY HAVE THE RIGHT INFORMATION ON MARKET TO ASSESS INDICES TO DECIDE WHETHER THEY WANT TO TRADE AGAINST THEM, PRICE INDEX DEALS AGAINST THEM OR WHETHER THEY NEED TO DO SOMETHING ELSE.

>> YEAH, I AGREE WITH A LOT OF WHAT YOU SAID. IT IS A TRICKY QUESTION FOR SURE BUT THE FLIP SIDE OF ALL THE NEGATIVES WILL LIQUIDITY REQUIREMENTS OR MINIMUM LEVEL OF TRANSACTION, YOU HAVE THE POTENTIAL FOR PEOPLE MANIPULATING INDEX, POTENTIAL FOR PEOPLE CONTROLLING IT FOR BETTER OR WORSE. I MEAN, THAT'S THE OTHER SIDE OF IT. MARKETS DON'T AUTOMATICALLY TAKE CARE OF ISSUES LIKE THAT. SO I HEAR WHAT YOU'RE SAYING. BUT THERE'S ALSO ANOTHER SIDE TO IT. I DON'T THINK THE ANSWER IS OBVIOUSLY YOU DON'T HAVE A LIQUIDITY REQUIREMENT BECAUSE THEN  SO LET'S SAY IT IS THIS ONE PARTY MAKING THE MARKET. I MEAN, DO WE HAVE  ARE WE SURE WE CAN COUNT ON THEM TO MAKE THE MARKET IN EVERYONE'S INTEREST, THEIR INTEREST? IT'S A QUESTION.

>> I WANTED TO TOUCH ON ONE MORE TIME THE IDEA THAT REGULATORY RISK, WHAT IS I GUESS THE PERCEPTION, BECAUSE IF SOMEONE'S NOT PRICE REPORTING I THINK IT WAS BROUGHT UP THIS MORNING THERE COULD STILL BE A A 552 AUDIT. TO MY KNOWLEDGE WE HAVEN'T REALLY PURSUED A PRICE REPORTING VIOLATION. I'M WONDERING IF THERE'S MORE JUST A VAGUE REGULATORY FEAR THAN ACTUAL REGULATORY RISK.

>> I THINK IT IS A VAGUE REGULATORY RISK BECAUSE IF EVERYTHING THAT HAPPENED AT THE TURN OF THE CENTURY, PEOPLE WENT TO JAIL, PEOPLE WERE FINED A LOT OF MONEY. THOSE THINGS AREN'T FORGOTTEN. AND THEN WITH OTHER CASES THAT HAVE COME OUT OF INVESTIGATIONS, WHETHER IT'S REAL OR NOT, PERCEPTION TO THOSE PEOPLE IS THEIR REALITY. SO THAT'S WHY, YEAH, I THINK IT'S A PERCEIVED FEAR.

>> THE SENSE YOU'RE PUTTING YOUR HEAD ABOVE THE FOXHOLE.

>> I GUESS THE IDEA IS WHY TAKE THE RISK.

>> I WOULD ALSO POINT OUT TURN OF THE CENTURY  TOM HAYWOOD. THE TURN OF THE CENTURY WE WERE STILL USING A VERY DIFFERENT FORM OF PRICE DISCOVERY. YOU KNOW, I WAS CALLING, YOU KNOW, TRADERS ACROSS THE COUNTRY AND GETTING PRICES FROM THEM. WE DON'T DO THAT ANYMORE. IT'S A MUCH BETTER SYSTEM NOW

>> CAN YOU EXPLAIN ALL THE FACTS YOU WANT TO BUT THERE ARE PEOPLE WITH LONG MEMORIES THAT MAY NOT UNDERSTAND ALL THE FACTS, BUT THAT'S WHY I SAY IT IS A PERCEIVED FEAR.

>> THAT'S TRUE. THAT'S WHY THE SAFE HARBOR NEEDS TO MAKE SURE THAT IF YOU HAVE  YOU KNOW, IF YOU DO REPORT, YOU KNOW, AND YOU REPORT TO A BROAD SECTION, YOU KNOW, YOU PUT YOUR PRICES OUT THERE, THAT THERE'S SORT OF AN ASSUMPTION THAT, YOU KNOW, YOU DON'T  YOU'RE NOT HIDING ANYTHING, THAT YOU'RE PUTTING PRICES ON A TRADE, THAT YOU'RE NOT TRYING TO MANIPULATE ANYTHING. I'M JUST SAYING, IT SHOULD WEIGH IN YOUR FAVOR.

>> SO I GET THE FEAR, BUT IS THERE ANY ANSWER TO IT OTHER THAN ELIMINATING THE REQUIREMENT ENTIRELY?

>> ARE YOU ASKING COREY OR ARE YOU ASKING CHENIERE? IF YOU ASK COREY THE ANSWER IS KNOW.

>> I'M ASKING COREY.

>> I SAY THE ANSWER IS NO.

>> I GET THE FEAR BUT THE FEAR IS SO PERVASIVE NOTHING WILL OVERCOME IT AND YOU'LL NEVER GET MORE THAN 15% REPORTING BECAUSE THERE'S A RISK. DREW, YOU SAID SOMETHING AT THE BEGINNING.

>> LET ME REACT TO THAT I GUESS. THE FEAR IS PERVASIVE. AND THE KEY IS THE COSTBENEFIT RATIO IN TERMS OF BEING REPORTER OR NOT. DON'T MISUNDERSTOOD BY INITIAL COMMENTS TO MEAN I DON'T THINK IT'S A CLOSE CALL FOR TENASKA. IT'S A CLOSE CALL. WE RESPECT THE DECISIONS OF COMPANIES THAT DECIDED NOT TO BE PRICE REPORTERS, THEY LOOK AT THE SAME COSTS AND BENEFITS AND TILT MORE IN THE RISK DIRECTION, WE LIKE TO SEE THE COMMISSION AND PEOPLE IN PANELS COME UP WITH WAYS TO ADDRESS THAT. I DON'T KNOW THAT WE'VE ARE MAGIC SOLUTIONS TODAY. IT'S NOT ALL REALITY. IT'S ALSO PERCEPTION. INSTANCES WHERE PEOPLE ENDED UP PAYING FINES SOLELY FOR PRICE REPORTING BEHAVIOR WERE A LONG TIME AGO. A NUMBER OF US HAVE BEEN AUDITED SINCE THEN AND CAME THROUGH THE AUDITS FINE. AUDITS ARE BURDENSOME AND TIME CONSUMING BUT IN TERMS OF RISK OF SIGNIFICANT PENALTIES, RECENTLY, DIRECTIONAL, THE NEWS IS POSITIVE. I DON'T KNOW IF THAT'S A COMPLETE ANSWER BUT THAT'S OUR VIEW.

>> I WANT TO POINT OUT AGREEING 552 DATA LAST YEAR 45% OF FIXED PRICE VOLUME TOOK PLACE AT COMPANIES THAT SAID THEY REPORT. THE NOTION THAT 10 OR 15%, THE NUMBER WE'RE THROWING OUT HERE IS WHAT GETS REPORTED DOESN'T SEEM TO BE SUPPORTED BY AGGREGATE DATA. WITH THAT SAID TO ACTUALLY ASSESS INDEX QUALITY YOU CAN'T DO THAT ON THE AGGREGATE DATA. YOU HAVE TO DO THAT ON POINT BY POINT BASIS.

>> TO FOLLOW UP ON THAT, IF THEIR ABILITY OR DESIRE TO SEE FORM 552 EXPANDED OR MODIFICATIONS, I THINK WOULD BE HELPFUL FOR MARKET TRANSPARENCY.

>> AS AN ECONOMIST (INDISCERNIBLE) AT THE SAME TIME I THINK IT'S MASSIVELY BURDENSOME AND WE'VE ASSISTED COMPANIES LOOKING AT PRICE REPORTING ISSUES I APPRECIATE HOW MASSIVELY BURDEN SOME IT IS. IT'S A REAL QUESTION AND PROBABLY SHADES ON THE ANSWER OF NO WHETHER IT'S RISK (INDISCERNIBLE).

>> SO JUST TO ANSWER THAT QUESTION I THINK THAT WOULD BE VERY BURDENSOME, NOT ONLY ON MARKET PARTICIPANTS BUT ALSO ON YOU TO ACTUALLY TAKE THE DATA AND MAKE SENSE OF IT. THAT'S SOMETHING THAT PLATTS AND OTHER PRAs DEAL WITH EVERY DAY. THEY TRADE AT TETCO M3 IS GOING TO BE REPORTED SEVEN DIFFERENT WAYS BY TEN PEOPLE. SO BEING ABLE TO PUT ALL THOSE TRADES IN A BUCKET AND REPORT IN A MANNER THAT'S MEANINGFUL IS DIFFICULT WHEN YOU LOOK AT LOCATIONAL GRANULARITY. SO ANOTHER POINT I WANTED TO MENTION WAS IN REGARDS TO THIS FEAR AND THE PERCEIVED FEAR AND FACT WHEN COMPANIES WEIGH COSTBENEFIT OF PRICE REPORTING, THE THOUGHT IS THE RISK OUTWEIGHS THE REWARD. AND I WOULD ARGUE THAT ONE THING THE COMMISSION CAN DO IS TAKE A CLOSER LOOK AND THINK OF WAYS TO BRING THAT BACK INTO BALANCE AND PERHAPS THE OTHER WAY, RIGHT, TO MAKE IT MORE OF AN INCENTIVE TO PRICE REPORT. THE FERC POLICY STATEMENT HAS A PROVISION ALREADY WHERE PRICE REPORTERS HAVE TO ANNUALLY HAVE AN INDEPENDENT AUDIT OF THEIR POLICIES. THAT REPORT IS MADE AVAILABLE TO PRAs AT THEIR REQUEST, AND PLATTS DOES REVIEW THOSE REPORTS AT TIMES. THE QUESTION IS, IS THAT ENOUGH? IS THAT GOOD ENOUGH? THAT SHOULD BE GOOD ENOUGH, RIGHT? FOR PRICE REPORTING PURPOSES. IF YOU WANT A SEPARATE REVIEW OF 552 DATA, BY ALL MEANS. BUT FROM A PRICE REPORTING STANDPOINT THAT REVIEW IS BEING DONE ANNUALLY. I WOULD ARGUE THAT CLOSER ATTENTION TO BE PAID TO COMPANIES THAT CHOOSE NOT TO PRICE REPORT. PERHAPS IT'S FURTHER ANALYSIS OF THEIR TRADING ACTIVITIES, AULD OF THEIR TRAINING ACTIVITIES, AND THE FACT THAT FOCUSING MORE ON THEM RATHER THAN CREATING THIS PERCEIVED BURDEN ON PRICE REPORTERS.

>> ANY MORE QUESTIONS? ANY OTHER FINAL COMMENTS? OH, J.C.?

>> HAPPY FOURTH OF JULY.

>> YAY. THAT IS A GREAT COMMENT. WE THANK YOU ALL FOR PARTICIPATING TODAY. I THINK WE DISCUSSED A LOT OF ISSUES AND DISCUSSED THEM AGAIN IN OTHER PANELS, SO I APPRECIATE YOUR ABILITY TO SIT THROUGH DISCUSSIONS TWICE SOMETIMES. I WANT TO REMIND YOU YOU CAN FILE COMMENTS, TECHNICAL CONFERENCE COMMENT IN THE DOCKET AD1712. IT IS DUE JULY 31. THANK YOU AGAIN FOR YOUR PARTICIPATION AND HAVE A GOOD NIGHT.