§ 3371. Authorization of certain sales and transportation
(a)
Commission approval of transportation
(1)
Interstate pipelines
(2)
Intrastate pipelines
(A)
In general
The Commission may, by rule or order, authorize any intrastate pipeline to transport natural gas on behalf of—
(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—
(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
(b)
Commission approval of sales
(1)
In general
The Commission may, by rule or order, authorize any intrastate pipeline to sell natural gas to—
(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—
(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
(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—
(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
(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—
(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);
(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).
(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)
Terms and conditions
Any authorization granted under this section shall be under such terms and conditions as the Commission may prescribe.