FERC ISSUES TAKE-OR-PAY GAS POLICY PLAN

  The Federal Energy Regulatory
  Commission (FERC) issued a proposed policy statement for the 
  recovery of take-or-pay costs imposed by existing natural gas
  contracts between producers and pipelines.
      It put out the statement, by 5-0 vote, for a 30-day comment
  period. It also put out an alternative policy statement by
  Commissioner Charles Stalon.
      FERC said in a press release that "the proposed policy
  statement estblishes an exception to the commission's general
  policy that take-or-pay buy-out and buy-down costs must be
  recovered through pipeline' commodity sales rates."
      FERC added that "specifically, in cases where pipelines
  assume an equitable share of buy-out or buy-down costs, the
  commission proposes to permit the pipelines to recover the
  remaining costs through their demand rates."
      It said it wanted guidelines for buying out and reforming
  existing contracts to help spread the impact of these
  take-or-pay costs in a responsible, fair and equitable way.
      Commission chairwoman Martha Hesse said "this proposal
  represents the commission's sincere attempt to help the
  industry through this difficult period of transition to a more
  competitive market."
      Hesse said "it is my hope that our proposed policy will
  encourage and guide the timely resolution of take-or-pay
  contractual disputes that have impeded the industry's
  transition to a more competitive environment.  It is vital to
  the industry that we get this problem behind us."
  

