Natural Gas Reports

Incentive Regulation for Local Gas Distribution Companies Under Changing Industry Structure

December 1991
— Mohammad Harunuzzaman, Kenneth W. Costello, Daniel J. Duann, and Sung-Bong Cho

State regulators have been striving to develop responses to the emerging competitive environment in the gas industry. A major issue worth examining is whether current state regulation provides correct incentives to local gas distribution companies (LDCs) to efficiently utilize many opportunities offered by the new and rapidly changing gas market. The study examines gas purchase opportunities currently available to the LDC, which have expanded significantly in the post-Order 436 era. These expanded opportunities also make the design of a purchase portfolio much more complex than in the pre-Order 436 era. This complexity is likely to grow further following the final implementation of the NOPR (also known as the 'mega-NOPR'). Read More ›

Natural Gas Producer-Distributor Contracts

State regulatory issues and approaches

January 1988
— J. Stephen Henderson, Jean-Michel Guldmann, Anand Desai, Mohammad Harunuzzaman, Peter A. Nagler, and Mark E. Eifert

The natural gas transportation policy currently being fashioned at the FERC is changing the way in which gas is bought and sold in the U.S. and the way in which its cost is regulated by state public utility commissions. Local gas distribution companies are likely to have much greater freedom in contracting for gas than during any period in the history of the industry. Instead of relying mostly on its traditional interstate pipeline supplier(s), a distributor may have future opportunities to participate directly in the wellhead gas market and to arrange to transport the gas it buys through interstate pipelines that have decided to participate voluntarily in the federal gas transportation program under the FERC Orders 436 and 500. Consequently, state regulators are faced with the prospect of reviewing, understanding, and overseeing a distributor's contractual arrangements for gas supply to a much larger extent than was the case when a FERC-regulated pipeline was the distributor's principal supplier. This report examines several facets of the resulting effects on state regulatory policies, procedures, and oversight activities, recent changes in the federal transportation program, and quantitative models to determine an optimal portfolio of gas supply sources. Read More ›

Natural Gas Industry

Restructuring Issues

September 1986
— J. Stephen Henderson

In 1986, The National Regulatory Research Institute undertook a project specifically directed toward keeping state regulators of natural gas utilities informed about policy issues emerging from changes in the structure of the gas industry. We have done this through a series of short reports and papers related to gas industry restructuring. The four papers in this volume are offered as a contribution to the public policy debate on how state regulators can best respond to the restructuring of the gas industry. Read More ›

The Bypass of Local Gas Distribution Utilities

How can you tell if it is for real?

August 1986
— Alvin Kaufman

State utility commissions are faced with the necessity of screening out real bypass candidates from those who are attempting to take advantage of the situation, i.e., the bluffers. In order to begin such screening, the regulator must ask questions. NRRI was asked to set out the appropriate questions a public utility commission should ask in an effort to decide if the threat of bypass is real. In order to formulate what needs to be asked, we attempt, in this paper, to carefully define bypass, discuss why it may be considered a problem, analyze the characteristics of a bypass candidate, and finally pose the questions. Read More ›

Natural Gas Rate Design and Transportation Policy Under Deregulation and Market Uncertainty

January 1986
— J. Stephen Henderson, Jean-Michel Guldmann, Ross C. Hemphill, and Kyubang Lee

The natural gas industry in the United States today, while not in crisis, stands at an important crossroad. The direction of its future evolution is not yet clear, but important changes in its organization seem likely. Although the major regulatory reforms are occurring at the federal level, PUCs are active participants in the process. To assist the state PUCs in these matters, NRRI was asked to study natural gas design issues in the context of the greater market uncertainty that is likely to accompany the current reforms. This report addresses these rate design issues in particular and in addition discusses gas transportation policy, a topic that has gained considerable importance since the inception of this research. Read More ›