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Asset Management Agreement Energy

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AMAs are contractual relationships in which an “asset manager” agrees to manage another party`s gas supply and supply agreements, including its pipeline capacity. In the case of a delivery to the AA, a large buyer of gas,. B, for example, a local distributor or industrial user, transfers its pipeline capacity (and possibly its gas purchase contracts) to an asset manager. WADA requires the asset manager to provide gas to the purchaser when asked to do so in accordance with WADA`s terms and conditions. To the extent that there is excess pipeline capacity or excess gas purchased, the asset manager is expected to maximize the value of these assets by making bulk sales or passing on pipeline capacity to third parties, with revenues to be distributed in accordance with WADA. Delivery AMA works in the same way as delivery CAs, except that a large gas seller – usually a producer – assigns its pipeline capacity to the asset manager who buys gas from the vendor, then markets and shares the revenues as expected under WADA`s terms. In 2008, the Commission acknowledged that AMAs were bringing significant benefits to market participants and took steps to facilitate the increased use of AMA. In Regulation 712, the Commission found that AMMs will maximize the use and value of pipeline capacity by creating a mechanism for capacity holders to call on third-party experts to ensure their capacity. The Commission found that AAMs ultimately result in savings for end-customers, as they provide for reduced gas supply costs and more efficient use of pipeline capacity. In order to facilitate the increased use of AMA, the Commission exempted qualified CASs (which meet certain requirements for the volume of the asset manager`s gas supply or purchase obligations) in Regulation 712 from the tendering requirements of the intergovernmental ironc rules for the release of pipeline capacity.

This derogation, codified in Section 284.8 of CEC regulations, allows FERC capacity holders to free up PIPELINE capabilities in conjunction with an AMA to an asset manager without providing tender capacity (although approvals are still publicly published). Recognizing that AMAs are complex agreements, the Commission also exempted qualified CAPs from prohibiting the opening of intergovernmental pipeline capacity on foreign terms.

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