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-CITE-
15 USC Sec. 3371 = 01/05/2009-EXPCITE-
TITLE 15 - COMMERCE AND TRADE
CHAPTER 60 - NATURAL = GAS POLICY
SUBCHAPTER III - ADDITIONAL AUTHORITIES AND REQUIREMENTS
Part B - Other Authorities and Requirements-HEAD-
Sec. 3371. Authorization of certain sales and transportation-STATUTE-
(a) Commission approval of transportation
(1) Interstate pipelines
(A) In general
The Commission may, by rule or order, authorize any
interstate pipeline to transport natural = gas on behalf of -=20
(i) any intrastate pipeline; and
(ii) any local distribution company.
(B) Just and reasonable rates
The rates and charges of any interstate pipeline with respect
to any transportation authorized under subparagraph (A) shall
be just and reasonable (within the meaning of the = Natural Gas
Act [15 U.S.C. 717 et seq.]).
(2) Intrastate pipelines
(A) In general
The Commission may, by rule or order, authorize any
intrastate pipeline to transport natural = gas on behalf of -=20
(i) any interstate pipeline; and
(ii) any local distribution company served by any
interstate pipeline.
(B) Rates and charges
(i) Maximum fair and equitable price
The rates and charges of any intrastate pipeline with
respect to any transportation authorized under subparagraph
(A), including any amount computed in accordance with the
rule prescribed under clause (ii), shall be fair and
equitable and may not exceed an amount which is reasonably
comparable to the rates and charges which interstate
pipelines would be permitted to charge for providing similar
transportation service.
(ii) Commission rule
The Commission shall, by rule, establish the method for
calculating an amount necessary to -=20
(I) reasonably compensate any intrastate pipeline for
expenses incurred by the pipeline and associated with the
providing of any gathering, treatment, processing,
transportation, delivery, or similar service provided by
such pipeline in connection with any transportation of
natural gas authorized under = subparagraph (A); and
(II) provide an opportunity for such pipeline to earn a
reasonable profit on such services.
(b) Commission approval of sales
(1) In general
The Commission may, by rule or order, authorize any intrastate
pipeline to sell natural gas to -=20
(A) any interstate pipeline; and
(B) any local distribution company served by any interstate
pipeline.
(2) Rates and charges
(A) Maximum fair and equitable price
The rates and charges of any intrastate pipeline with respect
to any sale of natural gas = authorized under paragraph (1) shall
be fair and equitable and may not exceed the sum of -=20
(i) such intrastate pipeline's weighted average acquisition
cost of natural gas;
(ii) an amount, computed in accordance with the rule
prescribed under subparagraph (B); and
(iii) any adjustment permitted under subparagraph (C).
(B) Commission rule
The Commission shall, by rule, establish the method for
calculating an amount necessary to -=20
(i) reasonably compensate any intrastate pipeline for
expenses incurred by the pipeline and associated with the
providing of any gathering, treatment, processing,
transportation, or delivery service provided by such pipeline
in connection with any sale of natural = gas authorized under
paragraph (1); and
(ii) provide an opportunity for such pipeline to earn a
reasonable profit on such services.
(C) Adjustment
(i) Application
This subparagraph shall apply in any case in which, in
order to deliver any volume of natural = gas pursuant to any
sale authorized under paragraph (1), any intrastate pipeline
acquires quantities of natural gas = under any existing
contract, if -=20
(I) such intrastate pipeline acquires any volume of
natural gas under such contract = in excess of that which
such pipeline would otherwise have acquired; and
(II) the price paid for such additional volume of = natural
gas acquired under such contract is greater = than such
pipeline's weighted average acquisition cost of = natural
gas, computed without regard to the = acquisition of such
additional volume of natural = gas.
(ii) Commission adjustment
In any case to which this subparagraph applies, the
Commission shall permit an adjustment to the maximum fair and
equitable price provided under subparagraph (A) to increase
the revenue to the intrastate pipeline under such sale by an
amount determined by the Commission to be adequate to offset
the additional cost incurred by such pipeline due to any
increase in such pipeline's weighted average acquisition cost
of natural gas.
(3) Limitation
(A) Two-year duration
No authorization of any sale (or any extension thereof) under
paragraph (1) may be for a period exceeding two years.
(B) Extension
Any authorization of any sale under paragraph (1), and any
extension of any such authorization under this subparagraph,
may be extended by the Commission if such extension satisfies
the requirements of this subsection.
(4) Adequacy of service to intrastate customers
Any sale authorized under paragraph (1) shall be subject to
interruption to the extent that natural = gas subject to such sale
is required to enable the intrastate pipeline involved to provide
adequate service to such pipeline's customers at the time of such
sale.
(5) Procedural requirements
(A) Affidavit
Any application for authorization of any sale under paragraph
(1) shall be accompanied by an affidavit filed by the
intrastate pipeline involved and setting forth -=20
(i) the identity of the interstate pipeline or local
distribution company involved;
(ii) each point of delivery of the natural = gas from the
intrastate pipeline;
(iii) the estimated total and daily volumes of = natural gas
subject to such sale;
(iv) the price or prices of such volumes; and
(v) such other information as the Commission may, by rule,
require.
(B) Verification of compliance
Any application for authorization of any sale under paragraph
(1) shall be accompanied by a statement by the intrastate
pipeline involved verifying by oath or affirmation that such
sale, if authorized, would comply with all requirements
applicable to such sale under this subsection and all terms and
conditions established, by rule or order, by the Commission and
applicable to such sale.
(6) Termination of sales
(A) Hearing
Upon complaint of any interested person, or upon the
Commission's own motion, the Commission shall, after affording
an opportunity for oral presentation of views and arguments,
terminate any sale authorized under paragraph (1) if the
Commission determines -=20
(i) such termination is required to enable the intrastate
pipeline involved to provide adequate service to the
customers of such pipeline at the time of such sale;
(ii) such sale involves the sale of natural = gas acquired by
the intrastate pipeline involved solely or primarily for the
purpose of resale of such natural = gas pursuant to a sale
authorized under paragraph (1);
(iii) such sale violates any requirement of this subsection
or any term or condition established, by rule or order, by
the Commission and applicable to such sale; or
(iv) such sale circumvents or violates any provision of
this chapter.
(B) Suspension pending hearing
Prior to any hearing or determination required under
subparagraph (A), upon complaint of any interested person or
upon the Commission's own motion, the Commission may suspend
any sale authorized under paragraph (1) if the Commission finds
that it is likely that the determinations described in
subparagraph (A) will be made following the hearing required
under subparagraph (A).
(C) Determination
The determination of whether any interruption of any sale
authorized under paragraph (1) is required under subparagraph
(A)(i) shall be made by the Commission without regard to the
character of the use of natural gas = by any customer of the
intrastate pipeline involved.
(D) State intervention
Any interested State may intervene as a matter of right in
any proceeding before the Commission relating to any
determination under this section.
(7) Disapproval of application
The Commission shall disapprove any application for
authorization of any sale under paragraph (1) if the Commission
determines -=20
(A) such sale would impair the ability of the intrastate
pipeline involved to provide adequate service to its customers
at the time of such sale (without regard to the character of
the use of natural gas by such = customer);
(B) such sale would involve the sale of natural = gas acquired
by the intrastate pipeline involved solely or primarily for the
purpose of resale of such natural = gas pursuant to a sale
authorized under paragraph (1);
(C) such sale would violate any requirement of this
subsection or any term or condition established, by rule or
order, by the Commission and applicable to such sale; or
(D) such sale would circumvent or violate any provision of
this chapter.
(c) Terms and conditions
Any authorization granted under this section shall be under such
terms and conditions as the Commission may prescribe.-SOURCE-
(Pub. L. 95-621, title III, Sec. 311, Nov. 9, 1978, 92 Stat. 3388.)-REFTEXT-
REFERENCES IN TEXT =20
The Natural Gas Act, = referred to in subsec. (a)(1)(B), is act
June 21, 1938, ch. 556, 52 Stat. 821, as amended, which is
classified generally to chapter 15B (Sec. 717 et seq.) of this
title. For complete classification of this act to the = Code, see
section 717w of this title and Tables.
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