Natural Gas Regulation:

Pipeline Transportation Under FERC Order 436

RCED-87-133BR: Published: Jun 9, 1987. Publicly Released: Jun 23, 1987.

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Pursuant to a congressional request, GAO examined how the Federal Energy Regulatory Commission (FERC) is implementing a regulation that allows natural gas pipelines to transport gas without FERC approval if they provide services on a nondiscriminatory basis.

GAO found that: (1) 26 of the 45 major interstate natural gas pipelines have applied to participate in the program; (2) the participating pipelines accounted for 78 percent of the operating revenues received by gas pipelines in 1985; (3) in considering pipeline applications, FERC has had to consider such issues as pipeline capacity allocation, contract reduction or conversion provisions, penalties for deviations from transportation agreements, and pipelines' rate-setting practices; and (4) FERC has, under certain conditions, allowed interstate pipelines to transport gas without complying with the regulation's provisions.

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