Opinion ID: 329424
Heading Depth: 3
Heading Rank: 3

Heading: Differentials in Load

Text: 51 Petitioners argue that there is a need and justification for differentials between those customers who take large amounts at a single place on a high load-factor basis and those who take comparable volumes in small amounts at many delivery locations. The ALJ found that service to pipeline customers as a group is cheaper because it is more efficiently performed via longer diameter pipes, to fewer delivery points. 62 He also found evidence that the average unit cost of transporting gas for high load-factor customers was significantly lower. 63 52 However, on this record we cannot say that the FCP's 25%-75% classification gives insufficient consideration to any such differences in cost. United is admittedly an integrated system, 64 and there is some testimony that small diameter pipelines are not exclusively associated with city-gate customers, or large-diameter lines with pipeline customers. 65 United's proposed tariff continued the Seaboard approach of splitting fixed costs equally between demand and commodity components. Neither United nor any of its customers asked the Commission to adopt a differential based on greater volume at fewer delivery points. No developed cost studies have been presented to define the different costs associated with different customers. 53 The formula adopted by the FPC provides for a peak differential that will, to some extent, reflect any cost savings attributable to high load-factor customers. The Commission has indicated that it will be open to receive properly framed evidence that that differential is inadequate to reflect differences in physical factors of delivery. 66 We cannot assign error on the record as it stands.