February 2015, Vol. 242, No. 2

Government

In Turnaround, FERC Proposes to Allow Surcharges to Fund Modernization

In a departure from past policy, the Federal Energy Regulatory Commission (FERC) is considering allowing interstate pipelines to recoup the costs of complying with federal environmental and safety regulations. FERC would allow pipelines to insert simplified mechanisms, such as trackers or surcharges, into contracts with shippers. FERC allowed trackers in an isolated case involving Columbia Gas Transmission when it issued a final order in January 2013. Prior to that, the Commission stated that recovering those costs in a tracking mechanism was contrary to the requirement to design rates based on estimated units of service. Joan Dreskin, the general counsel for the Interstate Nat

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