Incentive Rates Logical Response to Order 636

✍ Scribed by Moring, Frederick

• Book ID: 102219296
• Publisher: John Wiley and Sons
• Year: 2008
• Weight: 225 KB
• Volume: 10
• Category: Article
• ISSN: 0743-5665
• DOI: 10.1002/gas.3410100104

✦ Synopsis

ith the benefit of 20-20 hindsight, it is W now easy to see that the restructuring of the natural gas industry was a predictable consequence of the Wellhead Decontrol Act of 1989.

Yet in 1989 few of us would have predicted that the massive pipeline unbundling process brought about by Order 636 was about to occur. Likewise, most of us did not foresee that the LDCs' gas supply role would become as important as it has. Neither did we foresee that gas-versus-gas competition would spread to the LDCs' retail markets. Given these important surprises in recent years, it is worth considering what others may be just ahead.

One of the other possible surprises just ahead for LDCs may be incentive ratemaking. This hypothesis is suggested by the incentiveratemaking plans now being proposed and implemented by LDCs in various states. One of the most recent of these plans is that filed in May 1333 by the New Jersey Natural Gas Co. ("1.