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TABLE OF CONTENTS
I. Executive Summary 1
II. Responses to Questions
1. How can we at the state level reassure ourselves and
our constituents that the extraordinary prices we are
experiencing today are free of such manipulation?
2. How can we reassure ourselves and our constituents 5
that the indexes driving the extremely high retail rates
are free of such manipulation, and in fact represent
robust, realistic market prices?
3. How much gas is actually being bought and sold at the 7
4. Who establishes the prices? 8
5. What are the mechanics of price disclosure and 8 discovery?
6. How robust are the indices and other price reporting 9
1. What is the extent of vertical integration in the producing 11
and processing functions?
2. What is the extent of vertical integration among producers, 11
processors, and pipelines?
3. What are the relationships between marketers and brokers, 11
on the one hand, and owners of the physical elements of
the gas system (production, processing, transmission)?
4. What is the relationship between marketers and brokers 11
and financing entities such as investment banks?
TABLE OF CONTENTS (con'td)
5. How concentrated are each of the markets for physical 16
production and delivery services?
6. How concentrated are each of the markets for financing, 16
Marketing, and trading natural gas for delivery and use
1. Who are the producers in the producing basins that serve 23
2. Who are the royalty owners in the producing basins that 25
3. Who performs the gas gathering and processing functions 26
in each of the producing basins?
4. Who are the pipelines that transport gas out of the producing 28
basins to California? To other parts of America?
5. Who are the California wholesale buyers of gas transported 30
6. Who are the California retail buyers of gas transported by 31
pipeline (noncore utility customers)?
7. Who are the gas marketers and brokers? 33
8. How are the physical elements of gas infrastructure 35
(production, processing, transmission) financed?
9. Who are the financing entities? 35