Gas inventory charges and peak-load reliability
Description
The natural gas industry has historically been organized through a vertical sequence of long-term contracts, the first between wellhead producer and pipeline, and the second between pipeline and local distribution company (LDC). These long-term contracts contained provisions, variously called take-or-pay (TOP) clauses or minimum bills, that required buyers to pay for a minimum level of supply in all later time periods, regardless of the buyers' actual demand requirements. As a result, the pipeline's purchase obligation was typically offset by the distributor's purchase obligation, so that the pipeline essentially passed the minimum purchase requirement directly from producer to distributor. The authors focus on the role GICs (Gas Inventory Charges) can play in the provision of peak-load reliability, and the effects of GICs and their treatment by regulators on pipeline system design. In particular, they compare the various options available to local distribution companies (LDCs) for providing peak-load reliability, emphasizing the alternative downstream storage. They find that the ratemaking decisions of state regulators may distort LDC choices between different gas supply options, inducing what may be an inefficient demand for new storage facilities. GICs, when competitively prices, offer state regulators a means of circumventing these distortions
Additional details
Publishing Information
- Publisher
- International Assoc. of Energy Economists.
- Imprint Place
- Washington, DC (United States)
- Imprint Title
- Energy supply/demand balances
- Imprint Pagination
- 448 p.
- Journal Page Range
- p. 173-183.
Conference
- Title
- 12. annual North American conference of the International Association for Energy Economics (IAEE).
- Dates
- 1-3 Oct 1990.
- Place
- Ottawa (Canada).
INIS
- Country of Publication
- United States
- Country of Input or Organization
- United States
- INIS RN
- 23044819
- Subject category
- S03: NATURAL GAS;
- Resource subtype / Literary indicator
- Conference
- Quality check status
- Yes
- Descriptors DEI
- CONTRACTS; MAINTENANCE; NATURAL GAS; NATURAL GAS DISTRIBUTION SYSTE; NATURAL GAS INDUSTRY; PEAK LOAD; PIPELINES; SPOT MARKET; SUPPLY AND DEMAND; US FERC;
- Descriptors DEC
- ENERGY SOURCES; FLUIDS; FOSSIL FUELS; FUEL GAS; FUELS; GAS FUELS; GASES; INDUSTRY; MARKET; NATIONAL ORGANIZATIONS; US DOE; US ORGANIZATIONS;
Optional Information
- Secondary number(s)
- CONF-901097--.