In a notice of proposed rulemaking, the Federal Energy Regulatory Commission has posed a new method of funding the Gas Research Institute, while extending the present funding method for one year (see, FERC Docket Nos. RM97-3-000 and RP97-149-000).
The current funding mechanism allows GRI-member pipelines to discount a FERC-approved GRI surcharge, then remit to GRI only those funds recovered. The FERC noted that this mechanism threatens GRI's research, development and demonstration efforts. Instead, the FERC has proposed to divide GRI research programs into two groups: core and noncore.
The core programs would include those that benefit gas consumers overall and cannot be captured by individual sectors of the industry. Core programs would be funded through a nondiscountable, non-bypassable surcharge on all volumes transported by interstate pipelines. The amount of the surcharge would be based on the FERC's review of the GRI core programs and on throughput from the most recent years.
The noncore programs would include those that produce benefits for more limited groups, such as individual consumers, groups of consumers, specific industries or groups of companies within an industry. Noncore programs would be voluntary.
FERC Chair Elizabeth Moler pointed out that the GRI program is 21 years old and needs some assistance from the FERC.
"We continue to believe it is in the public interest to provide for research and development that will benefit all aspects of the gas industry," Moler said.
The American Gas Association has endorsed the FERC's proposal. "In the current environment of
gas-to-gas competition, where margins are slim and competitive pressures are increasing, A.G.A. believes a surcharge that collects equally on every cubic foot of gas moved through the interstate transportation system may be the only approach at the present time that assures funding for important core research," said A.G.A. Chair Thomas Fisher, who also is chair, president, and CEO of NICOR Inc.
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