David Givens

Energy direction, editorial depth and reliability in commodity price indexes 

Relationships are the core of trust, influence and reliability

Sturdy, reliable relationships have been at the core of price formation in the natural gas and bulk power markets since the open access era began.

In the 1980s and 1990s, market participants relied upon the verbal representations provided by price reporting agencies (PRAs) that information about specific transactions would not be disclosed. This was especially important at less liquid locations on the gas and power grids.

A complex set of personal relationships arose to support the business goals of PRAs. Some firms and individuals were willing to provide transactional information for indexes, and some wanted a broad picture of the market in return.

That kind of request could frequently be accommodated, within limits. I did my best to honor confidentiality while publishing accurate, unbiased indexes and still telling the story of market moves – which could be volatile – to our paying subscribers on a daily basis.

Changes in communications technology, along with the FERC policy statements of 2003-2005, have made the two-way, personal, daily exchange of information obsolete. The current regime under which market participants provide data from their mid- and back offices works precisely as designed.

But trust is still at the core of price discovery systems for natural gas and power. Local distribution companies, utilities, marketers, merchant generators, grid operators, producers, and even FERC itself trust that we follow indexation methodologies and data handling procedures to the letter.

I manage relationships with all of these entities, and more.

People are still coming to grips with the shale revolution, where upstream developments drive investment decisions at a rapid pace.in the pipeline and LNG sectors. Clean energy has been making rapid strides over the same period.

I explain to my friends inside the Beltway the cost drivers in markets for fuel and their downstream outputs for power, LNG and end-use products. I help my sources and contacts outside of Washington understand the focus of key actors in the executive branch, Congress and among the many regulatory agencies with very specific mandates.

A grasp of every single of one of these matters will be critical as U.S. energy exports continue and global markets become bound even closer than in the past. I look forward to working with you on these issues.