BEECHER - NAWC

Water ComparedAppendix BTTable B-3Key Dates in Natural Gas Industry Restructuring1978 Natural Gas Policy Act ends federal control over the wellhead price of "new" gas as of January I,1985, but keeps in place wellhead price controls for older vintages of gas. The laws of supply anddemand began to work again in the natural gas industry.1984 Federal Energy Regulatory Commission (FERC) Order 380 invalidates contract requirements thata gas utility pay a pipeline for a certain amount of gas even if it could not take the gas. This pavedthe way for utilities to buy gas directly from producers and marketing companies.1985 FERC Order 436 establishes a voluntary program that encourages natural gas pipelines to be "openaccess" carriers of natural gas bought directly by users from producers. This order begins theseparation (unbundling) of pipelines' merchant and transportation functions, and it initiates reformof the natural gas industry's regulatory structure.1987 FERC Order 451 provides the opportunity for sellers of gas from older wells to receive a moremarket-sensitive price.1988 FERC Order 490 allows abandonment of first-sales contracts and pipeline bypass.1989 Natural Gas Wellhead Decontrol Act lifts all remaining wellhead price controls on natural gas.FERC Order 500, an addendum to FERC Order 436, provides mechanisms for settling certaincontract liabilities incurred by pipelines that could not take all of the gas they had ordered fromproducers (take-or-pay contracts).1991 FERC Order 537 clarifies the authority of interstate pipeline companies to move gas "on behalf of'distributors or intrastate pipeline companies under NGPA Section 311. Section 311 transactionsdo not require blanket certificates if they pass certain FERC conditions.1992 FERC Order 636 orders interstate natural gas pipelines to "unbundle," or offer separately, their gassales, transportation and storage services. The goal of this order is to ensure that all natural gassuppliers compete for gas purchasers on equal footing. The order also mandates capacity release,electronic bulletin boards, and straight fixed-variable (SFV) rate design.1994 FERC issues several orders clarifYing the commission's gathering policy. FERC retains the right todisregard the separate corporate structures of pipeline companies and their gathering affiliates inthe event that a pipeline company abuses the pipeline-affiliate interrelationship.1995 The first residential natural gas customer choice programs are implemented. By 1997, local naturalgas utilities in 17 states and the District of Columbia had proposed and/or implemented suchresidential customer choice policies or pilot.Source: American Gas Association, http://www.aga.com/gio/ncdvnamics.html (December 1997); FederalEnergy Regulatory Natural Gas Information and Educational Resources http://www.naturalgas.org/; andhttp://www.naturalgas.org/Termdef.htm#380.NAWC 142 September 1998