The Federal Energy Regulatory Commission has declined to change its cross crediting mechanism in its open access transportation program for U.S. interstate gas pipelines.
In Order 500-I, FERC denied requests for substantial changes in its final rule on the program.
At the mandate of the District of Columbia Circuit Court of Appeals, in Order 500-H the commission reaffirmed cross crediting but moved the take or pay cost recovery deadline from Mar. 31, 1989, to Dec. 31, 1990, and set a sunset date for the take or pay crediting mechanism: Dec. 31, 1990, or the date on which a pipeline accepts a gas inventory charge authorization, whichever occurs first.
Pipelines sought a rehearing, and in Order 500-I FERC agreed to change to 60 days from 30 days the notice period before which pipelines may apply take or pay credits to gas they must take.
"NO" TO OTHER CHANGES
FERC denied requests for other changes, saying Order 500 has been instrumental in encouraging settlements that are removing take or pay problems. It said pipelines' take or pay exposure has decreased from $10.7 billion in 1986 to $2.4 billion as of Mar. 31, 1989.
It again refused to exercise its authority under Section 5 of the Natural Gas Act to change or abrogate problem gas contracts, as some pipelines have urged. It again maintained it lacks authority to modify contracts for the sale of nonjurisdictional gas.
The Interstate Natural Gas Association of America said FERC's action "simply repeats the justifications it has previously made for failing to provide take or pay relief and takes wholly unjustified credit for settlements that have taken place in spite of, rather than because of, its earlier actions."
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