Collapse to view only § 3372. Assignment of contractual rights to receive surplus natural gas
- § 3371. Authorization of certain sales and transportation
- § 3372. Assignment of contractual rights to receive surplus natural gas
- § 3373. Effect of certain natural gas prices on indefinite price escalator clauses
- § 3374. Clauses prohibiting certain sales, transportation, and commingling
- § 3375. Filing of contracts and agreements
§ 3371. Authorization of certain sales and transportation
(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—
(i) any intrastate pipeline; and
(ii) any local distribution company.
(B) Just and reasonable rates
(2) Intrastate pipelines
(A) In general
The Commission may, by rule or order, authorize any intrastate pipeline to transport natural gas on behalf of—
(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
(ii) Commission rule
The Commission shall, by rule, establish the method for calculating an amount necessary to—
(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—
(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—
(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—
(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—
(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
(3) Limitation
(A) Two-year duration
(B) Extension
(4) Adequacy of service to intrastate customers
(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
(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);
(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
(C) Determination
(D) State intervention
(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
(Pub. L. 95–621, title III, § 311, Nov. 9, 1978, 92 Stat. 3388.)
§ 3372. Assignment of contractual rights to receive surplus natural gas
(a) Authorization of assignments
(b) Effect of authorization under subsection (a)
(c) Surplus 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.)
§ 3373. Effect of certain natural gas prices on indefinite price escalator clauses
(a) High-cost natural gas
(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 section 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.)
§ 3374. Clauses prohibiting certain sales, transportation, and commingling
(a) General ruleAny 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 chapterFor purposes of subsection (a), 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.)
§ 3375. Filing of contracts and agreements
The Commission may, by rule or order, require any first sale purchaser of natural gas under a new contract, a successor to an existing contract, or a rollover contract to file with the Commission a copy of such contract, together with all ancillary agreements and any existing contract applicable to such natural gas.
(Pub. L. 95–621, title III, § 315, Nov. 9, 1978, 92 Stat. 3393; Pub. L. 100–439, §§ 1, 2(a), (b)(1), Sept. 22, 1988, 102 Stat. 1720; Pub. L. 101–60, § 3(a)(2), July 26, 1989, 103 Stat. 158.)