Hubs and centers

Journal Article · Sun May 15 04:00:00 EDT 1994 · Fortnightly; (United States)

OSTI ID:7110978

Parker, A L

In August 1992, the Federal Energy Regulatory Commission (FERC) released a discussion paper on the importance of market centers. The paper focused industry and regulatory attention on the market center concept by presenting a clear explanation of its associated benefits. The paper also served as a catalyst, encouraging the FERC and the gas industry to pursue efforts to refine the market center concept and to expand the analysis of its potential benefits to producers, local distribution companies (LDCs), and end users. Some confusion has resulted from the common practice of using the terms market center and market hub interchangeably. In fact, there is a significant difference between the two. A market hub may be defined as a location where two or more pipelines interconnect or are in close enough proximity to be easily interconnected. A market hub becomes a market center when a pipeline, gas marketer, or other entity is identified as the operator (or facilitator) of the pipeline interconnect, or the potential for such an arrangement exists. The potential benefits of market centers generally support the FERC's position that their development should not be inhibited. The additional benefits associated with the operation of MCEs would appear to support a somewhat stronger position: that FERC actions designed to promote the development of market centers and MCE operations should be forthcoming.

• OSTI ID: 7110978
• Journal Information: Fortnightly; (United States), Journal Name: Fortnightly; (United States) Vol. 132:10; ISSN FRTNE8
• Country of Publication: United States
• Language: English

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