The profound changes now occurring in the electric industry will most directly affect those who are engaged in the enterprises of generation, transmission, and distribution of power. But...
Pipeline Restructuring: Slicing a Shrinking Pie
to attract capital in financial markets. Launer had this to say: "Earnings in pipelines are too low to attract capital. A study of 19 companies shows that capital spending in regulated activities at gas pipelines is down to 40 percent of total investment in the gas industry.
"Gas industry capital is moving away from the pipelines." t
Bruce W. Radford is editor of PUBLIC UTILITIES FORTNIGHTLY.
1Pipeline Service Obligations and Revisions to Regulations Governing Self-Implementing Transportation; Regulation of Natural Gas Pipelines After Partial Wellhead Decontrol [Regs. Preambles Jan. 1991 - June 1996] FERC Stats. & Regs. ¶30,939 (1992).
2Issues and Priorities for the Natural Gas Industry, Supplemental Notice Organizing Public Conference, Docket No. PL97-1-000, May 21, 1997, 79 FERC ¶ 61,234.
3"[U]nlike pipelines, which have been forced [under Order 636] to unbundle and relinquish capacity on other pipelines, these competitors and their affiliates, without prior Commission authorization, can hold transportation and storage capacity on any number of pipelines, creating 'virtual pipelines.' ... [B]y aggregating transportation and storage services, [they] can provide their customers with a choice of purchasing gas at the wellhead, city gate, or at some point in between the two." (The Coastal Cos., pp. 17, 8.)
4See, Secondary Market Transactions on Interstate Nat. Gas Pipelines, Docket Nos. RM-14-001, et al., Nov. 15, 1996, 77 FERC ¶61,183.
5See, e.g., comments of Williams Cos. and Koch Gateway Pipeline:
"WINGS [The Williams Interstate Natural Gas System] strongly supports the idea of removing the rate cap from the secondary market. (Williams Cos., p. 15.)
"The Commission's realization that the price caps on secondary market transactions could be removed is an important aspect of developing its competition policy." (Koch, p. 7.)
6The FERC reduced the old 20-year rule for bid matching to a five-year term this year in Order 636-C, on remand from United Distr. Cos. v. FERC, 88 F.3d 1105 (D.C.Cir.1996).
7Perhaps expand blanket authority under FERC regulations, Part 157, Subpart F, with environmental compliance conducted under 18 C.F.R. sec. 157.206(d), for projects meeting cost criteria of 18 C.F.R. sec. 157.208(d).
8NorAm Gas Transmission Co., Mississippi River Trans. Corp., NorAm Field Services Corp., NorAm Energy Services Inc., and NorAm Energy Management Inc.
9This section, applicable to projects begun under blanket certificates, requires all construction to comply with eleven specified statutes and Executive orders that address environment concerns.
10Cost of new facility are allocated across the owner's entire pipeline system, so that all system customers help fund it. The alternative, incremental pricing, assigns all costs directly to customers of the new facility.
11Pricing Policy for New and Existing Facilities Constructed by Interstate Nat. Gas Pipelines, 71 FERC ¶61,241 (1995). See also Williams, pp. 28-29.
12Recently, the FERC allowed pipelines to roll-in bypass facilities. See, Mojave Pipeline Co., 72 FERC ¶61,172 (1995), on reh'g, 74 FERC ¶61,047 (1966), reh'g denied, 74 FERC ¶61,288 (1966).
13See, Alternatives to Traditional Cost-of-Service Ratemaking for Nat. Gas Pipelines, Docket No. RM95-6-000; Regulation of Negotiated Transp. Services of Natural Gas Pipelines, Docket No. RM96-7-000, Statement of Policy and Request for Comments, Jan. 31, 1996, 74 FERC ¶61,076. In 1990, however, the