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Natural Gas > Rate Design - Special Marketing Programs (SMP's)
The following information is about Rate Design - Special Marketing Programs (SMP's).
Rate Design - Special Marketing Programs (SMP's) Defined
SMP's involves the direct sale of producer gas that has previously been committed to a pipeline or distribution company. The gas is released by pipeline or another distribution company and the producer sells the released gas to an end-user or distribution company at a price below the original contract price in order to be competitive. Transportation of the gas is typically provided by the releasing pipeline at a rate which contributes to full fixed cost recovery. The FERC intends for the SMP to act as a mechanism for gas producers to make necessary price concessions in order to market their production.
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