The Interstate Natural Gas Association of America (INGAA) has released a background report from its rate and policy analysis department that compares natural gas and electric restructuring costs. INGAA feels the gas industry experience offers lessons for federal and state regulators as they debate potential stranded costs from electric industry restructuring.
INGAA notes that the interstate pipelines had to adopt open access and provide their customers with choices before their stranded-cost liabilities were settled. Also, pipelines had strong incentives to hold restructuring cost levels down: Pipelines were not permitted to fully recover their restructuring costs because of Federal Energy Regulatory Commission (FERC) policies, and because of competitive pressures. Consequently, gas industry stranded costs ended up significantly less than expected ($13.2 billion, as compared to FERC's estimate of $44 billion).