Managed competition and commercial relationships between pipelines and local distribution companies
- Newman & Holtzinger, Washington, DC (United States)
FERC Order No. 636 was intended to and does change commercial relationships between natural gas pipelines and users of natural gas pipelines. For more than a century, natural gas pipeline companies provided an integrated merchant service in which they purchased natural gas at the point of production, gathered the gas in the field, and transmitted it to distant markets where they sold it to local distribution companies, municipalities, and industries pursuant to private contracts. The United States Supreme Court recognized the economic necessity of the preservation of these private contracts, subject to federal regulation by the Federal Power Commission (FPC) or its successor the Federal Energy Regulatory Commission (FERC) when required by the public interest. Parties entered into these long-term contracts as security for the capital invested in the business. Pipelines were not built on speculation, and customers did not invest capital in distribution or consumption facilities without assurances of long-term firm supplies. Competition and commercial relationships between pipelines and local distribution companies are discussed.
- OSTI ID:
- 171676
- Report Number(s):
- CONF-931097--
- Country of Publication:
- United States
- Language:
- English
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