Home >  Term: minimum commodity bill
minimum commodity bill

Provisions in a rate schedule (jurisdictional) or contract (nonjurisdictional) requiring customers to purchase minimum annual volumes of gas or, under certain circumstances, pay the fixed cost portion of the commodity rate on any volumes which fall below the minimum volume level. The Federal Energy Regulatory Commission has stated in Atlantic Seaboard the three factors needed to justify a minimum bill: (1) protecting the pipeline against the risk of not recovering the fixed costs in the commodity component; (2) protecting full requirements customers from bearing a disproportionate share of the fixed costs resulting from swings off the system by partial requirements customers; and (3) protecting customers from take-or-pay liabilities that the pipeline might otherwise bear.

0 0

Looja

  • JJD
  •  (Gold) 2369 points
  • 100% positive feedback
© 2024 CSOFT International, Ltd.