When regulators grant changes to utility rates of return, they estimate growth on the basis of gross domestic product (GDP). But do utilities have any chance of growing at the same pace as GDP?...
Firm-to-the-Wellhead Rates Make Comeback
Harkening back to the pre-Order 636 era, the Federal Energy Regulatory Commission (FERC) has issued two orders approving firm-to-the-wellhead rates for Transcontinental Gas Pipe Line Corp. (Docket Nos. RP92-137-016 and RP93-136-000) and Tennessee Gas Pipeline Co. (Docket Nos. RP91-203-000 and RP92-132-000).
In initial decisions, one administrative law judge had approved firm-to-the-wellhead rates in the Tennessee case; another had deemed them anticompetitive in the Transco case. Shippers argued that allowing such rates would limit the customer choice promoted in Order 636.
Although not totally pleased with firm-to-the-wellhead rates, the FERC approved them anyway. Commissioner William L. Massey dissented in part in the Tennessee case, stating that such rates are not "the wave of the future," but rather a "relic." Chair Elizabeth A. Moler said that, to her mind, the cases stand for the proposition that such rates are viable as long as pipelines have a capacity-release program in place.
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