New policy statement: Step into the unknown

✍ Scribed by Grenier, Edward J.

• Book ID: 102220306
• Publisher: John Wiley and Sons
• Year: 2007
• Weight: 326 KB
• Volume: 12
• Category: Article
• ISSN: 0743-5665
• DOI: 10.1002/gas.3410120907

✦ Synopsis

Statement of Policy in Docket

No. m95-6-000, its proceeding exploring alternatives to traditional cost-of-service rate-making for natural gas pipelines.

Market-Based Rates

Accompanying its Notice was a Staff Paper proposing a framework for evaluating pipeline proposals for market-based rates. In brief summary, the paper urged that pipelines proposing to implement market-based rates demonstrate that they cannot exert market power in the relevant market or markets. Staff used an antitrust-type analysis, including analysis of concentration in the relevant market. In sum, Staff proposed that a pipeline would be deemed not able to exert market power if there were four or five "good alternatives" to the pipeline's service offering. These are alternatives that can meet the shipper's needs in a timely manner and that would result in the pipeline in question being