31 Tex. Admin. Code § 8.4 - Review Criteria for All Contracts
GLO will review all new and existing contracts entered into by a state agency for the acquisition of an average volume of 100 Mcf (or the MMBtu equivalent thereof) or more per day of natural gas, calculated on an annual basis, to ensure that the agency is using natural gas produced from state lands for the production of energy to the greatest extent practical.
(1) GLO will not approve a
contract using non-state gas if it determines that it can provide gas at the
same, or a lower price.
(A) The cost of
transporting state gas from the point of production to the agency's service
address (or other mutually agreed point) shall be considered part of the cost
of state gas.
(B) The amortized
cost of constructing a pipeline or installing other equipment in order to
deliver state gas shall be part of the cost of gas.
(C) Where applicable, the cost of
dehydrating, compressing, processing, and/or treating shall be part of the cost
of state gas.
(D) Any applicable
filing fees payable to federal regulatory agencies shall be part of the cost of
state gas.
(2) GLO will
not approve a contract if it determines that the purchasing agency leases land
for mineral development through a board for lease authorized by the Natural
Resources Code, Chapter 34, and such agency is not using, to the greatest
extent practical, resources produced from land owned by the agency to meet its
energy requirements.
(3) The final
decision regarding the practicality of using gas provided by GLO to meet the
agency's energy requirements will be with GLO.
Notes
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