AGA Fears Blurring of Distinction Between Discounted Rate and Negotiated Rate Treatments in Cost of Service Cases

摘要

The American Gas Association (AGA) intervened late in the now-suspended rate proceeding initiated by the November 30 filing of Tennessee Gas Pipeline Co. (RP11-1566) specifically to register its concerns about "a disturbing trend on the part of jurisdictional pipelines. Tennessee's filing is among a number of recent tariff filings by pipelines seeking to include provisions allowing for discount-type adjustments for their negotiated rate agreements." AGA believes the Commission's negotiated rate program established that recourse rate shippers must be adequately protected against inappropriate cost-shifting. Under the negotiated rate program, pipelines may negotiate rates with shippers that vary from their cost-based rates provided that a cost-based recourse rate is available to the shipper to prevent the pipeline's exercise of market power. By this regime, existing recourse rate shippers should be no worse off as a result of a pipeline company's use of negotiated rates.