Natural Gas Policy Act Section 312

§ 3372

TITLE 15—COMMERCE AND TRADE

crease 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—
(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—
(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);

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(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—
(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.
(Pub. L. 95–621, title III, § 311, Nov. 9, 1978, 92
Stat. 3388.)
REFERENCES IN TEXT
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 (§ 717 et
seq.) of this title. For complete classification of this
act to the Code, see section 717w of this title and
Tables.

§ 3372. Assignment of contractual rights to receive surplus natural gas
(a) Authorization of assignments
The Commission may, by rule or order, authorize any intrastate pipeline to assign, with-

Page 1725

out compensation, to any interstate pipeline or
local distribution company all or any portion of
such intrastate pipeline’s right to receive surplus natural gas at any first sale, upon such
terms and conditions as the Commission determines appropriate.
(b) Effect of authorization under subsection (a)
For the effect of an authorization under subsection (a) of this section, see section 3431 of
this title (relating to the coordination of this
chapter with the Natural Gas Act [15 U.S.C. 717
et seq.]).
(c) Surplus natural gas
For purposes of this section, the term ‘‘surplus
natural gas’’ means any natural gas which is determined, by the State agency having regulatory jurisdiction over the intrastate pipeline
which would be entitled to receive such natural
gas in the absence of any assignment to exceed
the then current demands on such pipeline for
natural gas.
(Pub. L. 95–621, title III, § 312, Nov. 9, 1978, 92
Stat. 3392; Pub. L. 101–60, § 3(b)(2), July 26, 1989,
103 Stat. 158.)
REFERENCES IN TEXT
The Natural Gas Act, referred to in subsec. (b), is act
June 21, 1938, ch. 556, 52 Stat. 821, as amended, which is
classified generally to chapter 15B (§ 717 et seq.) of this
title. For complete classification of this act to the
Code, see section 717w of this title and Tables.
AMENDMENTS
1989—Subsec. (c). Pub. L. 101–60 substituted ‘‘any natural gas’’ for ‘‘any natural gas—
‘‘(1) which is not committed or dedicated to interstate commerce on November 8, 1978;
‘‘(2) the first sale of which is subject to a maximum
lawful price established under subchapter I of this
chapter; and
‘‘(3)’’.
EFFECTIVE DATE OF 1989 AMENDMENT
Section 3(b) of Pub. L. 101–60 provided in part that the
amendment by section 3(b)(2) of Pub. L. 101–60 is effective Jan. 1, 1993.

§ 3373. Effect of certain natural gas prices on indefinite price escalator clauses
(a) High-cost natural gas
No price paid in any first sale of high-cost natural gas (as defined in section 3317(c) 1 of this
title, as such section was in effect on January 1,
1989) may be taken into account in applying any
indefinite price escalator clause (as defined in
section 3315(b)(3)(B) 1 of this title, as such section was in effect on January 1, 1989) with respect to any first sale of any natural gas other
than high-cost natural gas (as defined in section
3317(c) 1 of this title, as such section was in effect on January 1, 1989).
(b) Other transactions
No price paid—
(1) in any sale authorized under section
3362(a) of this title, or
(2) pursuant to any order issued under section 3363(b), (c), (d), or (g) of this title,
may be taken into account in applying any indefinite price escalator clause (as defined in sec1 See

§ 3374

TITLE 15—COMMERCE AND TRADE

References in Text note below.

tion 3315(b)(3)(B) 1 of this title, as such section
was in effect on January 1, 1989).
(Pub. L. 95–621, title III, § 313, Nov. 9, 1978, 92
Stat. 3392; Pub. L. 101–60, § 3(b)(3), July 26, 1989,
103 Stat. 159.)
REFERENCES IN TEXT
Sections 3315 and 3317 of this title, referred to in text,
were repealed effective Jan. 1, 1993, by Pub. L. 101–60,
§ 2(b), July 26, 1989, 103 Stat. 158.
AMENDMENTS
1989—Pub. L. 101–60 inserted ‘‘, as such section was in
effect on January 1, 1989’’ in four places.
EFFECTIVE DATE OF 1989 AMENDMENT
Amendment by Pub. L. 101–60 effective Jan. 1, 1993,
see section 3(b) of Pub. L. 101–60, set out as a note under
section 3372 of this title.

§ 3374. Clauses prohibiting certain sales, transportation, and commingling
(a) General rule
Any provision of any contract for the first sale
of natural gas is hereby declared against public
policy and unenforceable with respect to any
natural gas covered by this chapter if such provision—
(1) prohibits the commingling of natural gas
subject to such contract with natural gas subject to the jurisdiction of the Commission
under the provisions of the Natural Gas Act
[15 U.S.C. 717 et seq.];
(2) prohibits the sale of any natural gas subject to such contract to, or transportation of
any such natural gas by, any person subject to
the jurisdiction of the Commission under the
Natural Gas Act [15 U.S.C. 717 et seq.], or
otherwise prohibits the sale or transportation
in interstate commerce (within the meaning of
the Natural Gas Act) of natural gas subject to
such contract; or
(3) terminates, or grants any party the option to terminate, any obligation under any
such contract as a result of such commingling,
sale, or transportation.
(b) Natural gas covered by this chapter
For purposes of subsection (a) of this section,
the term ‘‘natural gas covered by this chapter’’
means—
(1) natural gas which is not committed or
dedicated to interstate commerce as of November 8, 1978;
(2) natural gas, the sale in interstate commerce of which—
(A) is authorized under section 3362(a) or
3371(b) of this title; or
(B) is pursuant to an assignment under
section 3372(a) of this title; and,
(3) natural gas, the transportation in interstate commerce of which is—
(A) pursuant to any order under section
3362(c) or section 3363(b), (c), (d), or (h) of
this title; or
(B) authorized by the Commission under
section 3371(a) of this title.
(Pub. L. 95–621, title III, § 314, Nov. 9, 1978, 92
Stat. 3392.)
REFERENCES IN TEXT
The Natural Gas Act, referred to in subsec. (a)(1), (2),
is act June 21, 1938, ch. 556, 52 Stat. 821, as amended,