diff --git a/adept/rewards/__init__.py b/adept/rewards/__init__.py
new file mode 100644
index 0000000..e69de29
diff --git a/adept/rewards/base/__init__.py b/adept/rewards/base/__init__.py
new file mode 100644
index 0000000..e69de29
diff --git a/adept/rewards/base/base_potential_based_rewards.py b/adept/rewards/base/base_potential_based_rewards.py
new file mode 100644
index 0000000..7e26529
--- /dev/null
+++ b/adept/rewards/base/base_potential_based_rewards.py
@@ -0,0 +1,81 @@
+
+import numpy as np
+import abc
+
+class BasePotentialBasedReward:
+    """
+    Class for applying potential reward shaping to a set of observations. Potential based rewards
+    are used to prevent the learning of suboptimal policies. The reward for executing a transition
+    between states is the difference in value between the potential function applied to each state.
+    This condition is sufficient to guarantee policy invariance.
+
+    This implementation provides support for potential based reward shaping over scalar observations
+    of length 1.
+
+    For details, see
+    "Policy invariance under reward transformations:
+    Theory and application to reward shaping"
+    https://people.eecs.berkeley.edu/~pabbeel/cs287-fa09/readings/NgHaradaRussell-shaping-ICML1999.pdf
+    """
+
+    def __init__(
+        self,
+        name: str,
+        gamma: float,
+        exponent_coefficient: float,
+        minimum: float,
+        maximum: float,
+        absolute: bool,
+        reward_base: float,
+    ) -> None:
+
+        """
+        Parameters
+        ----------
+        name: str
+            Name of the shaped reward
+        gamma : float
+            Discount factor needed for calculating potential-based reward shaping
+        exponential_coefficient : float
+            The coefficient of the exponent value. The smaller the value, the closer to linear
+        minimum : float
+            Minimum value to be given to the agent. This should match the minimum of the gym space
+        maximum : float
+            Maximum value to be given to the agent. This should match the maximum of the gym space
+        absolute : bool
+            If the absolute value should be taken during preprocessing
+        reward_base : float
+            Reward to use for the phi calculations (before the potential--not the actual reward provided)
+        """
+        self._name = name
+        self._gamma = gamma
+        self._exponential_coefficient = exponent_coefficient
+        self._minimum = minimum
+        self._maximum = maximum
+        self._absolute = absolute
+        self._reward_base = reward_base
+
+        self._midpoint = (self._maximum - self._minimum) / 2 + self._minimum
+
+    def __call__(self, observation, next_observation) -> float:
+        return self._potential_shaping_function(observation, next_observation)
+
+    def name(self) -> str:
+        return f"{type(self).__name__}_{self._name}"
+
+    def _preprocess_absolute(self, x):
+        return np.abs(x) if self._absolute else x
+
+    def _preprocess_observation(self, x):
+        return min(max(self._minimum, x), self._maximum)
+
+    def _potential_shaping_function(self, current_observation, next_observation) -> float:
+        return (self._gamma * self._phi(next_observation)) - self._phi(current_observation)
+
+    @abc.abstractmethod
+    def _phi(self, x) -> float:
+        """
+            Example phi function:
+            return self._reward_base / (1 + np.exp(self._exponent_coefficient * (self._preprocess_observation(x) - self._midpoint)))
+        """
+        raise NotImplementedError
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