Default gathering contracts: No panacea
✍ Scribed by Drom, Richard A.
- Book ID
- 102219970
- Publisher
- John Wiley and Sons
- Year
- 2008
- Weight
- 427 KB
- Volume
- 11
- Category
- Article
- ISSN
- 0743-5665
No coin nor oath required. For personal study only.
✦ Synopsis
FERC unveiled a novel 0 approach in three landmark gathering orders that conditioned approval of the abandonment of gathering facilities by interstate pipelines. The commission ordered new owners of transferred gathering facilities (gatherers) to enter into gathering agreements with all existing gathering customers or to submit a "default" gathering contract to the commission. If FERC determines that the default contract is not inconsistent with the terms, conditions, and rates for various services currently offered by independent gatherers in the particular region, it will declare such gathering facilities nonjurisdictional.
This default contract procedure appears to be a compromise between the commission's acknowledgment that gathering facilities are beyond its jurisdiction and its desire to respond to concerns raised by parties that will continue to use formerly regulated gathering facilities. However, FERC's orders raise a large number of questions and leave some important gathering issues unresolved. Implementation of the commission's new default contract policy promises to lead the commission through some deep and uncharted waters.