The Gas Research Institute has proposed a new funding mechanism that adjusts its research and development surcharge to changes in U.S. gas markets.
GRI conducts research for the U.S. industry. The Federal Energy Regulatory Commission approves its R&D program, funded through a surcharge on all gas shipments. The current 1.51/Mcf surcharge supports a $200 million R&D program.
Several gas pipelines recently asked FERC to let them quit the program (OGJ, Mar. 2, 1991, p. 23). They claimed market competition has forced them to bear the expense of the GRI surcharge, not gas consumers as intended.
The Interstate Natural Gas Association of America and American Gas Association formed a task force to help GRI develop the funding plan.
Stephen Ban, GRI president, said the resulting plan "represents a consensus of GRI members and will relieve the pressure on GRI members resulting from the expansion of discounted transportation transactions. Moreover, the revised mechanism will allow GRI to continue critical R&D for the gas industry and its customers."
WHAT'S PROPOSED
Under the proposed funding mechanism, FERC would continue to review and approve the annual GRI research program with member pipelines collecting the surcharge.
If pipeline transportation and sales service are provided directly to an end user or an intrastate pipeline and a local distribution company (LDC) is not involved in the transportation, the pipeline would continue to collect the GRI surcharge as a volumetric surcharge.
If pipeline transportation and sales service are provided and an LDC is involved in the transaction, the pipeline would collect the GRI surcharge through a separate bill or statement to the LDC. Volumes subject to the surcharge will be determined from the total of direct sales to the LDC, transportation by the pipeline for or to the LDC, and transportation by the pipeline for a third party with redelivery by the LDC.
The GRI surcharge amounts, regardless of the transactions from which they are derived, will be placed in separate pipeline accounts and never become part of pipelines' general funds. The pipelines will remit all funds in such accounts directly to GRI.
If FERC approves the new funding mechanism, it will become effective as soon as pipelines file the appropriate revised tariff sheets.
GRI said one pipeline that had objected to the old method, ANR Pipeline Co., has agreed to the revised membership and plans to resume full membership.
GRI said the revised mechanism will raise about $190 million/year in 1992 and 1993, allowing it to operate the essential elements of its current R&D program.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
