FERC yesterday gave its blessing to a hard-fought fundingsettlement that provides the road map for the Gas ResearchInstitute to begin its seven-year journey to become avoluntarily-funded organization.

“GRI funding has had a tortuous history here, and in that regardthis is a happy day,” said FERC Chairman James Hoecker. LastNovember, FERC ordered more negotiations on the funding settlementbecause it believed it “needed more widespread industry support,that the transition to market funding needed to be planned and belonger, and that GRI had to commit to pursuing all-voluntaryfunding,” he noted. “Well this settlement does it.”

The settlement, according to Commissioner William Massey, meetsthe three key objectives sought by the Commission: 1) that it havebroad industry backing; 2) that it focus on a plan for an orderlytransition to a voluntary, long-term funding program; and 3) thatthe amount of GRI’s annual budget funded through pipelinesurcharges be reduced during the transition period.

The settlement maintains GRI’s 1998 budget at $164 million, andwould cap it at $132 million in 1990 and at $98 million in 2000,with funding covering both core and non-core research anddevelopment (R&D) projects for the natural gas industry. In thefollowing four years (2001-2004), however, only core researchprojects would be included in GRI’s budgets, which would be cappedat $70 million in 2001 and at $60 million in the subsequent years.Starting in 2005, GRI-sponsored gas R&D would be fundedcompletely through voluntary contributions rather than via amandatory surcharge collected in pipeline rates, as is done now.

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