View all text of Part B [§ 3371 - § 3375]
§ 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.)