ABSTRACT
This chapter outlines the areas of state and federal regulation likely to be highlighted by the Federal Energy Regulatory Commission's (FERC) recent Notice of Proposed Rulemaking (NOPR). The relevant state issues for producing states are different from those of consuming states. Consuming states are concerned with how the NOPR will affect the distribution of gas, the matter of bypassing local distributors, and the security of future supply. Ratable or pro rata takes refer to the proportional cutback of production by producers. The "free rider" problem could be alleviated by breaking out block 2 gas into two subdivisions, one containing market responsive gas and the other containing high cost gas. The regulatory commissions of consuming states keep a watchful eye on burner tip prices and preserve an equitable allocation of natural gas. "Bypass" refers to the act of existing end users directly hooking up to a pipeline instead of through a local distribution company.
