โ Scribed by Batla, Raymond J.
No coin nor oath required. For personal study only.
In previous columns, we reviewed the issues raised by take-or-pay litigation and preliminarily addressed two of the defenses raised by pipeline defendants, technical deliverability requirements and force majeure arguments. We continue this month with a discussion of two additional defenses, (1) primary jurisdiction at the Federal Energy Regulatory Commission and ( 2 ) state conservation laws.
Many contracts containing take-or-pay requirements also contain price clauses keyed to maximum lawful prices, through either explicit pricc category clauses, or area-rate or mostfavored-nation clauses. In circumstances where maximum lawful prices have been paid by the purchaser and a take-or-pay claim is made for deficiencies, purchasers often argue that payment for take-or-pay deficiencies would cause total producer revenues, when divided by total million Btu's delivered, to yield a unit price that illegally exceeds federal maximum lawful prices, especially where complete makeup rights are not available. Having raised this price violation question, pipelines have then advanced the argument that the appropriate forum to address this ques-
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