18 C.F.R. § 284.7

Firm transportation service

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(a) Firm transportation availability. (1) An interstate pipeline that provides transportation service under subpart B or G or this part must offer such transportation service on a firm basis and separately from any sales service.

(2) An intrastate pipeline that provides transportation service under Subpart C may offer such transportation service on a firm basis.

(3) Service on a firm basis means that the service is not subject to a prior claim by another customer or another class of service and receives the same priority as any other class of firm service.

(4) An interstate pipeline that provided a firm sales service on May 18, 1992, and that offers transportation service on a firm basis under subpart B or G of this part, must offer a firm transportation service under which firm shippers may receive delivery up to their firm entitlements on a daily basis without penalty.

(b) Non-discriminatory access. (1) An interstate pipeline or intrastate pipeline that offers transportation service on a firm basis under subpart B, C or G must provide such service without undue discrimination, or preference, including undue discrimination or preference in the quality of service provided, the duration of service, the categories, prices, or volumes of natural gas to be transported, customer classification, or undue discrimination or preference of any kind.

(2) An interstate pipeline that offers transportation service on a firm basis under subpart B or G of this part must provide each service on a basis that is equal in quality for all gas supplies transported under that service, whether purchased from the pipeline or another seller.

(3) An interstate pipeline that offers transportation service on a firm basis under subpart B or G of this part may not include in its tariff any provision that inhibits the development of market centers.

(c) Reasonable operational conditions. Consistent with paragraph (b) of this section, a pipeline may impose reasonable operational conditions on any service provided under this part. Such conditions must be filed by the pipeline as part of its transportation tariff.

(d) Segmentation. An interstate pipeline that offers transportation service under subpart B or G of this part must permit a shipper to make use of the firm capacity for which it has contracted by segmenting that capacity into separate parts for its own use or for the purpose of releasing that capacity to replacement shippers to the extent such segmentation is operationally feasible.

(e) Reservation fee. Where the customer purchases firm service, a pipeline may impose a reservation fee or charge on a shipper as a condition for providing such service. Except for pipelines subject to subpart C of this part, if a reservation fee is charged, it must recover all fixed costs attributable to the firm transportation service, unless the Commission permits the pipeline to recover some of the fixed costs in the volumetric portion of a two-part rate. A reservation fee may not recover any variable costs or fixed costs not attributable to the firm transportation service. Except as provided in this paragraph, the pipeline may not include in a rate for any transportation provided under subpart B, C or G of this part any minimum bill or minimum take provision, or any other provision that has the effect of guaranteeing revenue.

(f) Limitation. A person providing service under Subpart B, C or G of this part is not required to provide any requested transportation service for which capacity is not available or that would require the construction or acquisition of any new facilities.

[Order 436, 50 FR 42493, Oct. 18, 1985] Editorial Note:For Federal Register citations affecting § 284.7, see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at www.govinfo.gov.

Notes of Decisions

Cited in 27 cases (2 in the last 5 years), 1987–2024 · leading case: Tennessee Gas Pipeline Co. v. Fed. Energy Regulatory Comm'n, 400 F.3d 23 (D.C. Cir. 2005).

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Tennessee Gas Pipeline Co. v. Fed. Energy Regulatory Comm'n, 400 F.3d 23 (D.C. Cir. 2005). · cites it 4× “See 18 C.F.R. § 284.7 (e) (2004). According to Tennessee, the Commission generally requires pipelines to utilize a straight fixed variable (“SFV”) rate design under which all fixed costs are included in the reservation charge and all variable costs are included in the usage…”

Mobil Oil Corp. v. Fed. Energy Regulatory Comm'n, 886 F.2d 1023 (8th Cir. 1989). · cites it 7× “” 26 As stated in 18 C.F.R. § 284.7 , there are three rate objectives for Part 284 transportation: (i) peak period rates should ration pipeline capacity 27 ; (ii) offpeak Firm service and Interruptible service rates should maximize pipeline throughput 28 ; and (iii) pipeline…”

Tennessee Gas Pipeline Co., a Div. of Tenneco Inc. v. Fed. Energy Regulatory Comm'n, 860 F.2d 446 (D.C. Cir. 1988). · cites it 3× “The FERC found three deficiencies in Tennessee’s proposed GS-IT rate: failure to specify maximum and minimum rates in accordance with 18 C.F.R. § 284.7 (d)(5)(i) (1988); failure to separately identify transmission, storage and gathering components as required by 18 C.”

Columbia Gulf Transmission, LLC v. FERC, 106 F.4th 1220 (D.C. Cir. 2024). · cites it 4× “]” 18 C.F.R. § 284.7 (b)(2). Petitioners argued that Texas Eastern provided “a lower priority of service” to Range at the Adair Interconnect “while providing significantly greater service to geographically proximate delivery points.”

Exxon Mobil Corp. v. Fed. Energy Regulatory Comm'n, 430 F.3d 1166 (D.C. Cir. 2005). · cites it 3× “See 18 C.F.R. § 284.7 . In an effort to increase competition and improve transparency in pricing, FERC required pipelines to recover the “fixed costs” of FT service through the reservation charge rather than through the volumetric charge.”

United Distrib. Companies v. Fed. Energy Regulatory Comm'n, Windward Energy & Mktg. Co., Intervenors, 88 F.3d 1105 (D.C. Cir. 1996). “Given that the purpose of selective discounting is to increase throughput by allowing pipelines to engage in price discrimination in favor of demand-elastic customers, AGD I, 824 F.”

Interstate Nat. Gas Ass'n of Am. v. Fed. Energy Regulatory Comm'n, 285 F.3d 18 (D.C. Cir. 2002). · cites it 2× “637 at 31,303; 18 C.F.R. § 284.7 (e). It directed each pipeline to make a pro forma tariff filing show *37 ing how it intended to comply with the new regulation, or explaining why its system’s configuration justified curtailing segmentation rights to ensure operational integrity.”

Pan-Alberta Gas, Ltd. v. Fed. Energy Regulatory Comm'n, 251 F.3d 173 (D.C. Cir. 2001). · cites it 2× “, 18 C.F.R. § 284.7 (e); Order at 61,918), plus the newly agreed upon “reservation Facility charge,” see Order at 61,915.”

Mississippi Valley Gas Co. v. Fed. Energy Regulatory Comm'n, S. Nat. Gas Co., Intervenors, 68 F.3d 503 (D.C. Cir. 1995). “18 C.F.R. § 284.7 (d)(5) (1995). This court has reviewed these regulations, and has upheld FERC’s authority to permit discounting to meet competition, with the caveat that such permission does not mean that FERC “is free to uphold every price distinction based on different…”

City of Nephi v. Fed. Energy Regulatory Comm'n, 147 F.3d 929 (D.C. Cir. 1998). “(CCH) ¶ 30,939 at 30,431, a one-part volumetric ("discount”) rate combines both elements into one usage charge payable when a customer actually ships gas, see 18 C.F.R. § 284.7 (c)(1) (1997), and reflects an "imputed load factor” that is higher than the customer's anticipated…”

Conoco Inc. v. Fed. Energy Regulatory Comm'n, Vesta Energy Co., Intervenors, 90 F.3d 536 (D.C. Cir. 1996). “436, at 42,493, 18 C.F.R. § 284.7 (d) (1990), cited in Northern Natural Gas Co.”

Ala.-Tenn. Nat. Gas v. So. Nat. Gas, 694 So. 2d 1344 (Ala. 1997). “See 18 C.F.R. § 284.7 (d)(5)(ii). We agree with the trial judge that the SNGC-Huntsville contract does not violate § 41-16-57 (e), which prohibits the letting of certain competitively bid contracts for periods greater than three years.”

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