[Code of Federal Regulations]
[Title 18, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 18CFR2.103]

[Page 35]
 
           TITLE 18--CONSERVATION OF POWER AND WATER RESOURCES
 
  CHAPTER I--FEDERAL ENERGY REGULATORY COMMISSION, DEPARTMENT OF ENERGY
 
PART 2_GENERAL POLICY AND INTERPRETATIONS--Table of Contents
 
Sec. 2.103  Statement of policy respecting take or pay provisions in 
gas purchase contracts.

    (a) Recognizing that take or pay contract obligations may be 
shielding the prices of deregulated and other higher cost gas from 
market constraints, the Commission sets forth its general policy 
regarding prepayments for natural gas pursuant to take or pay provisions 
in gas contracts and amendments thereto between producers and interstate 
pipelines which become effective December 23, 1982. The provisions of 
this policy statement do not establish a binding norm but instead 
provide general guidance. In particular cases, both the underlying 
validity of the policy and its application to particular facts may be 
challenged and are subject to further consideration.
    (b) With respect to gas purchase contracts entered into on or after 
December 23, 1982, the Commission intends to apply a rebuttable 
presumption in general rate cases that prepayments to producers will not 
be given rate base treatment if the prepayments are made pursuant to 
take or pay requirements in such gas purchase contracts or amendments 
which exceed 75 percent of annual deliverability.

(Natural Gas Act, 15 U.S.C. 717-717w; Natural Gas Policy Act of 1978, 
Pub. L. No. 95-621, 92 Stat. 3350, 15 U.S.C. 3301-3432)

[47 FR 57269, Dec. 23, 1982]