FERC ISSUES TAKE-OR-PAY GAS POLICY PLAN The Federal Energy Regulatory Commission (FERC) issued a proposed policy statement for the recovery of take-or-pay costs imposed by existing natural gas contracts between producers and pipelines. It put out the statement, by 5-0 vote, for a 30-day comment period. It also put out an alternative policy statement by Commissioner Charles Stalon. FERC said in a press release that "the proposed policy statement estblishes an exception to the commission's general policy that take-or-pay buy-out and buy-down costs must be recovered through pipeline' commodity sales rates." FERC added that "specifically, in cases where pipelines assume an equitable share of buy-out or buy-down costs, the commission proposes to permit the pipelines to recover the remaining costs through their demand rates." It said it wanted guidelines for buying out and reforming existing contracts to help spread the impact of these take-or-pay costs in a responsible, fair and equitable way. Commission chairwoman Martha Hesse said "this proposal represents the commission's sincere attempt to help the industry through this difficult period of transition to a more competitive market." Hesse said "it is my hope that our proposed policy will encourage and guide the timely resolution of take-or-pay contractual disputes that have impeded the industry's transition to a more competitive environment. It is vital to the industry that we get this problem behind us."