Home > Term: reservation fee
reservation fee
A charge for a unit of capacity reserved on a pipeline for firm transportation of customer-owned gas pursuant to Part 284 of the Commission's regulations. Section 284.8(d) of the regulations states that the fee may not recover any variable costs or any fixed costs in excess of those costs that would be recovered by using the same ratemaking methodology used for determining the demand charge in the pipeline's sales rates. The pipeline's tariff must state the maximum reservation fee. Because the reservation fee may not include any variable costs, the fee may be discounted to zero.
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