Firm-to-the-Wellhead Rates Make Comeback

Fortnightly Magazine - September 1 1996
This full article is only accessible by current license holders. Please login to view the full content.
Don't have a license yet? Click here to sign up for Public Utilities Fortnightly, and gain access to the entire Fortnightly article database online.

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).

Report - Economic Impact of Covid 19 on Utilities

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.

This full article is only accessible by current license holders. Please login to view the full content.
Don't have a license yet? Click here to sign up for Public Utilities Fortnightly, and gain access to the entire Fortnightly article database online.