You've heard talk lately about the convergence of electricity and natural gas. That idea has grown as commodity markets have matured for gas and emerged for bulk power.
But some...
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Pipelines Gain Rate Flexibility
The Federal Energy Regulatory Commission (FERC) has approved a policy statement, Alternatives to Traditional Cost of Service Ratemaking for Natural Gas Pipelines, giving pipelines greater flexibility to use market-based, negotiated/ recourse, incentive, and other alternative rates (Docket Nos. RM95-6-000 and RM96-7-000). Pipelines may negotiate new rates with customers, but may not negotiate services that might degrade open-access service under Order 636. The FERC is still considering what type of service flexibility it should allow.
Market-based rates are allowed only if the pipeline makes a "persuasive case" that it lacks market power. Such a determination will depend upon a variety of factors, such as the number of customer alternatives. Incentive rates revise the FERC's Policy Statement on Incentive Regulation (Docket No. PL92-1-000), allowing rates to exceed cost-of-service levels if efficiency gains are shared with customers.
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