mit special rate schedules to be filed in the form of an agreement in the case of special operating arrangements such as for exchange or transportation of natural gas; or for the sale of gas at charges computed on a cost-formula basis, which charges need not be stated in cents or in dollars and cents per unit. Such rate schedules shall conform to the form, type and size specified in § 154.32 and shall contain on each sheet the marginal notation specified in § 154.33. In addition each such rate schedule shall contain a title page which shall show its designation, the parties to the agreement, the date of agreement and a brief generalized description of services to be rendered. Such rate schedules shall not contain any supplements. Any modifications shall be by revised or insert sheets.

(b) Such rate schedules may be included in a separate volume of the tariff, which shall contain a table of its contents. This table of contents shall also be incorporated with the table of contents of other volumes.

METHOD OF SUBMISSION FOR FILING § 154.61 Application.

Sections 154.62 through 154.65, except as otherwise specifically provided in this part, apply to all tariffs, executed service agreements, or parts thereof which are filed after December 1, 1948.

§ 154.62 Material submitted with initial rate schedule or executed service

agreement.

(a) With the filing of any initial rate schedule or executed service agreement not superseding or making any change in a rate schedule, executed service agreement, or part thereof already on file, there shall be included a letter of transmittal containing a list of the material inclosed, the date on which such filing is proposed to become effective, and a list of the purchasers to whom it has been mailed: Provided, however, That the provisions of this section shall not be applicable to filings made pursuant to §§ 154.81 through 154.86.

(b) In addition, the following material shall be submitted where applicable:

(1) Statement of the reasons for initial rate schedule. A statement of the nature, and the reason for such proposed initial rate schedule. Data submitted in response to subsequent items may be included by reference as a part of the response to this item.

(2) Estimate of sales and revenues under an initial rate schedule or executed service agreement. An estimate of sales or transportation performed and revenues thereunder, by months, for the 12 months immediately succeeding the proposed effective date. The estimate shall be subdivided by rate schedules, classes of service, customers and delivery points, when more than one is involved. Such data shall include estimates of actual and billing quantities, that are to be used to compute the charges, such as actual demands, billing demands, volumes, heat content, and other determinants.

(3) Basis of the rate or charge proposed in initial rate schedule. A statement shall be submitted explaining the basis used in arriving at the proposed rate or charge. Such statement shall clearly show whether such rate or charge results from negotiation, cost of service determination, competitive factors, or others, and shall give the nature of any studies which have been made in connection therewith. If all or any portion of such information has already been submitted to the Commission, specific reference thereto should be made.

§ 154.63 Changes in a tariff, executed service agreement or part thereof.1

(a) Definitions—(1) Changes other than in rate level. Rate filings for changes other than in rate level include inter alia changes in service agreements (changed contract demand, new delivery points, etc.), tariff provisions (changed penalty provisions, changed delivery pressures, etc.), rate form (where no change in revenue is contemplated).

(2) Major rate increase. (i) Rate changes that will result in a general increase in revenues for the stated purpose of obtaining a fair rate of return on jurisdictional sales,

(ii) Rate changes that extend to all, or substantially all, of the jurisdictional sales, or

(iii) Rate changes associated with the delivery of substantially changed volumes of gas to existing customers.

(3) Minor rate increase. Minor rate increases usually relate to a few schedules and are designed to bring such schedules into harmony with general

tariff policy, to eliminate inequities and to achieve other formal adjustments, in cases where any increase in revenue is subordinate to some other purpose. They include changes that are not designed to provide general revenue increases such as to offset increased cost or otherwise achieve a fair return on the overall jurisdictional business. For the purpose of compliance with this subchapter, proposed increases in rates or charges which, for the test period, do not exceed the smaller of $100,000 or 5 percent, of the revenues under the jurisdiction of the Commission shall be considered minor.

(4) Rate decrease. Changes in rate level no part of which directly or indirectly result in any increased charge to a customer or class of customers will be considered as a rate decrease.

(b) Material to be submitted-(1) All filings. With the filing of any tariff, executed service agreement or part thereof which changes or supersedes any tariff, contract or part thereof on file with the Commission, there shall be included the following:

(i) A letter of transmittal containing a list of the material enclosed, the date on which such filing is proposed to become effective, the docket number, if any, of the proceeding in which the change was authorized and a list of the names and addresses of the purchasers and State Commissions to whom it has been mailed.

(ii) A statement of the nature, the reasons, and the basis for the proposed change.

(2) Changes other than in rate level. In addition to the material required by subparagraph (1) of this paragraph there shall be submitted a comparative statement of sales made, or transportation, exchange, etc., performed, and revenues therefrom, by months and in total, under the present and proposed tariff, contract, or part thereof, setting forth the transactions for the twelve months immediately preceding and for the twelve months immediately succeeding the proposed effective date of the change in tariff, contract, or part thereof. Actual data shall be used as far as possible, and any estimated data shall be designated as such. The statements shall be subdivided by rate schedules, classes of service, customers, and delivery point when more than one is involved. In the event any sale shown separately is made through more than one delivery point,

and conjunctive billing is provided by the tariff, the above data may be combined for all delivery points. Such data shall include billing quantities that are used to compute the charges including contract demands, billing demands, metered demands and volumes, heat content, rates and other determinants, in sufficient detail to permit complete verification of the revenues.

(3) Major rate increase. Class A companies (as defined in subchapter F, Uniform System of Accounts for Natural Gas Companies, of this chapter) shall submit, in addition to the material required by subparagraph (1) of this paragraph, Statements A to M inclusive and O and P described in paragraph (f) of this section. Class B, C and D companies, defined as above, shall file only Statements L, M, N, O, and P. Statement P required to be submitted by all classes of companies, may be furnished not later than 15 days after the date of the filing. A natural gas company filing another major increase in rates or charges within a period of twelve months after the date of filing of Statements A through M and O and P or after the end of the test period used therein including the period of adjustments shown on Statements A through M may submit for such other increase Statements L, M, and N in lieu of Statements A through M if the proposed new rate increase is filed to compensate only for an increase in the cost of purchased gas and there has been no material change in the company's facilities, sales volumes, and cost of service other than cost of purchased gas since such prior rate increase was filed.

(4) Minor rate increase or rate decrease. Only Statements L through N need be filed in addition to the material required by subparagraph (1) of this paragraph. (Statements L through N are not required to make effective rate changes or tariff provisions ordered by the Commission.)

nished to the Chief, Pipeline Division (Bureau of Natural Gas) to be available to interveners according to their needs, after their intervention has been permitted by the Commission.

(2) Item by reference for major rate increase. In addition to the material required to be submitted pursuant to paragraph (b)(3) of this section, the last FPC Form No. 2 of the natural gas company on file with the Commission shall be made an item by reference. In the event an FPC Form No. 2 for a later calendar year would otherwise be required to be filed with the Commission within 60 days from the end of the base period selected by the natural gas company for its rate increase filing, said FPC Form No. 2 shall be filed concurrently with the rate increase. There shall be furnished to the Chief, Pipeline Division (Bureau of Natural Gas) with the rate increase filing, one copy of the FPC Form No. 2 to be available to staff and six additional copies to be available to interveners according to their needs after intervention has been approved by the Commission.

(3) Reliance on other data. If the natural gas company has relied on data other than those in Statements A through P in support of its rate increase, such other data, appropriately identified and designated as such and separately stated, shall be submitted in addition to the data required by Statements A to P, in accordance with the requirements of paragraphs (d) and (e) of this section and limited to the test period prescribed in paragraph (e) (2) of this section. Where such other data fails to comply with the requirements herein prescribed, it shall be subject to rejection and if not properly refiled at least 15 days prior to the effective date proposed for the rate filing it may not thereafter be introduced in evidence in the event the proposed rate filing is set for hearing.

(4) Rejection for noncompliance. Where the data submitted in compliance with paragraph (b) of this section do not comply with the requirements of the rules and regulations, the rate filing is subject to rejection: Provided, however, That if the proposed rate increase is filed at least 45 days before the effective date proposed therefor and such filing does not comply with the requirements of this section, the natural gas company will be notified of the deficiencies, and if such deficiencies are properly cured within 15 days from the date of

such notice, the requisite supplementary material will be deemed to have been filed as of the same date as the initial submittal of the proposed rate increase.

(d) Form and number of copies—(1) Changes other than in rate level. Filings for changes other than in rate level shall comply with § 154.26.

(2) Change in executed service agreement. Agreements intended to effect a change or revision of an executed service agreement shall be in the form of a superseding executed service agreement only. Service agreements shall not contain any supplements, but may contain exhibits (stating contract demand, delivery points, delivery pressures, names of industrial customers of the distributor-customer, names of distributors with one named as agent where delivery to several distributors is effected at the same delivery point and well names) which may be separately superseded.

(3) Rate changes. Ten sets of the statements and of the additional information, if any, shall be submitted, each set securely bound in a cover.

(4) Format of statements and schedules. Amounts purporting to represent book data included in statements and schedules required to be prepared or submitted as part of the filing shall be reported in a separate column or columns All adjustments to book amounts shall also be reported in a separate column or columns so that book amounts, adjustments thereto and adjusted amounts will be clearly disclosed.

(e) Scope and composition of material for major increase—(1) Preparation for hearing. A natural gas company filing for an increase in rates or charges shall be prepared to go forward at a hearing on reasonable notice on the data which have been submitted and sustain the burden of proof imposed by the Natural Gas Act of establishing that its proposed changes are just and reasonable and not unduly discriminatory or preferential. The Commission is desirous of avoiding delay in processing rate filings. To this end, the material relied on in the filing and supporting work papers should be of such composition, scope, and format that it could serve as the company's complete case-in-chief in the event the rate is suspended and the matter is set for hearing to commence on a date within six months from the date of filing. If the rate fixing adjustments presented are not in full accord with a prior Commission decision directly involving the

filing company, the company shall include in its working papers alternate material which will reflect the effect of such prior decision. (For purpose of this provision, rate of return is not a rate fixing adjustment.)

(2) Base and test periods. (1) If the natural gas company has been in operation for 12 months at the time of the filing, the Statements A to M, inclusive, and O and P or, L through N inclusive, as appropriate, and supporting schedules, shall be based upon a test period which shall consist of a base period of 12 consecutive months of most recently available actual experience, adjusted for changes in revenues and costs which are known and are measurable with reasonable accuracy at the time of the filing, and which will become effective within nine months after the last month of available actual experience utilized in the filing, but in no event shall such test period extend six months beyond the date of filing: Provided, however, That, for good cause shown, upon application of the natural gas company made to the Commission 30 days in advance of the rate filing, the Commission may allow reasonable deviation from the prescribed test period; Provided further, That the last day of the 12 months of actual experience shall not be more than four months prior to the date of filing the proposed change in rates and charges. The 12 months of experience shall be adjusted to eliminate nonrecurring items (except minor amounts), but this shall not preclude the filing company from including items which, on the basis of existing facts, it can show will be experienced or from including an appropriate normalizing adjustment, e.g., rate case expenses, in lieu of a nonrecurring item. If the natural gas company has had less than 12 months' experience, the test period may consist of 12 consecutive months ending not more than one year from filing date, provided, however, the adjustments are not included for occurrences anticipated after the one-year period.

(ii) Adjustments to experience, or estimates where 12 months' experience is not available, may include the amounts for facilities for which a permanent or temporary certificate has been granted, provided such facilities will be in service within the test period, but such adjustments or estimates shall not include any amounts for facilities in respect to which a certificate of public convenience and

necessity must be obtained but which has not been issued at the date of filing, nor shall adjustments or estimates include any amounts for other facilities associated therewith. The bases and procedures, including the docket number of each such outstanding certificate and other significant data, used in the derivation of adjustments or estimates shall be submitted in sufficient detail on supporting schedules as to permit ready analysis of such adjustments or estimates.

(3) Joint facilities. If the natural gas company operates other departments in addition to the natural gas operations involved in the subject rate increase and has allocated to such natural gas operations any of its investment in joint or other department facilities and the operation, maintenance, depreciation costs or taxes associated therewith, it shall be shown on the statements required to be filed by this section, or the schedules in support thereof, the amounts so allocated together with the methods used in making such allocations: Provided, That if such allocations are recorded in the natural gas company's books on the basis of current accounting procedures the submittal may be confined to a brief description of the methods followed.

(4) Working papers and supporting data. (i) In the Statements described in paragraph (f) of this section, certain items are designated as being included in working papers. There is to be furnished to the Chief, Pipeline Division (Bureau of Natural Gas) upon filing the rate increase, one set of working papers for use by the staff and six additional copies of such working papers to be available to intervenors according to their needs after intervention, has been approved by the Commission.

(ii) The data in support of the proposed increased rates shall include the required particulars of book data, adjustments and other computations and information on which the company relies to justify the increased rates sought.

(iii) Any data or summaries included in the filing purporting to reflect the books of account shall be supported by accounting working papers, which papers shall set forth all necessary particulars from which an auditor may readily identify the book data included in the filing in separate columns and verify that such data are in agreement with the company's books of account. All statements, schedules, and working

papers shall be prepared in accordance with the classifications provided in the Uniform System of Accounts. Working papers prepared in accordance with similar standards and disclosing full particulars properly crossreferenced to the filing and within themselves and indexed shall be available for staff examination in support of all adjustments, computations and other information included in the filing.

(iv) Any company filing for a rate increase shall be responsible for preparing prior to filing and maintaining work papers sufficient to support the filing. Any failure to produce promptly such working papers on request by an authorized representative of the Commission prior to Commission action on the filing shall be cause for rejection of the tendered filing in its entirety. In addition to the working paper support the following specific material related to the base period normally prepared by the filing company shall be available for staff verification and analysis, and a copy shall be furnished on request:

1. Copies of monthly financial reports prepared for management purposes.

2. Copies of accounting analyses of balance sheet accounts.

3. Complete trial balances of all the balance sheet accounts at the beginning and end of the 12 months of actual experience, and revenue and expense accounts for the 12 months of actual experience used for the filing.

4. Analyses of the various miscellaneous revenues and related expenses included in the submitted cost of service.

5. Analyses of surplus and capital surplus accounts.

(5) Representation of chief accounting officer. The filing shall include a narrative statement executed by the chief accounting officer or other authorized accounting representative of the filing company representing that the cost statements and supporting data submitted as a part of the filing, as well as working papers required herein, which purport to reflect the books of the company do, in fact, set forth the results shown by such books.

(6) Opinion of independent public accountants. The filing shall include an opinion obtained from independent public accountants showing that an independent examination of the book amounts and accounting adjustments of the filing company has been made and the results thereof for the base period.

(f) Description of statements. De

This

Statement B-Rate base and return. statement shall summarize the overall gas utility rate base from the figures contained in Statement C, D, and E, with an appropriate deduction for Contributions in Aid of Construction, if any. The statement shall also include the claimed rate of return and shall show the application of the claimed rate of return to the overall rate base.

Statement C-Cost of plant. This statement shall show in summary form the amounts of gas utility plant classified by Accounts 101, 102, 103, 104, 105, 106, 107, and 117 as of the beginning of the 12 months of actual experience, the book additions and reductions (in separate columns) during the 12 months, together with the book balances at the end of the 12-month period. In adjoining columns there shall be shown the claimed adjustments, if any, to the book balances and the total cost of plant. All adjustments shall be fully and clearly explained in the supporting material submitted.

The following schedules and additional material shall be submitted as part of Statement C:

Schedule C-1 in columnar form similar to Statement C showing for each of the above accounts the amounts by detailed plants prescribed by the Commission's Uniform System of Accounts for Natural Gas Companies (Part 201 of this chapter) with subtotals thereof by functional classifications, i.e. Intangible Plant, Manufactured Gas Production Plant, Natural Gas Production and Gathering Plant, Products Extraction Plant, Underground Storage Plant, Local Storage Plant, Transmission Plant, Distribution Plant and General Plant: Provided, however, That to the extent plant costs are not available by detailed plant accounts they may be shown by functional classifications.

Accounts 101, 105, and 106 shall be adjusted to exclude the cost of major items of plant, the retirement of which is expected by the end of the test period.

Account 107 shall be adjusted to exclude plant in process of construction which is not expected to be in service by the end of the test period.

Schedule C-2 showing major plant addition and retirement projects for the test period, brief descriptions, approximate dates of commercial operation or retirement from service and cost.