person authorized to issue the sheet. Immediately below shall be placed "Issued on" followed by the date of issue.

(4) Effective date. On the right below the lower marginal ruling shall be placed "Effective:" followed by the specific effective date desired by the company.

(5) Sheets filed to comply with Commission orders. Sheets which are filed to make effective rate schedules or provisions ordered by the Commission shall carry the following notation in the bottom margin: “Issued to comply with order of the Federal Power Commission, Docket No.

§ 154.34 Composition of tariff.

dated

(a) The tariff shall contain, in the order named, sections setting forth a table of contents, a preliminary statement, a map of the system, the rate schedules, general terms and conditions, form of service agreement and an index of purchasers: Provided, however, That rate schedules for which special exception has been obtained under § 154.52 may be filed in a separate volume as permitted by § 154.33.

(b) Rate schedules shall be grouped according to class and numbered serially within each group, using a letter before the serial number to indicate the class of service. For example, G-1, G-2 may be used for general service; CD-1, CD-2 for contract demand service; I-1, I-2 for interruptible service; T-1, T-2 for transmission service; X-1, X-2 for schedules for which special exception has been obtained.

§ 154.35 Table of contents.

The table of contents shall contain a list of the rate schedules and other sections in the order in which they appear, showing the sheet number of the first page of each section. The list of rate schedules shall consist of (a) the symbol designation of each rate schedule, (b) a very brief description of the service, and (c) the sheet number of the first page of each rate schedule.

§ 154.36 Preliminary statement.

The preliminary statement shall contain a brief general description of the company's operations and may also contain a general explanation of its policies and practices. No general rules and regulations shall be included in the preliminary statement, nor any material necessary for the interpretation or application of the rate schedules.

§ 154.37 Map.

The map shall show on a single sheet, if practicable, the general geographic location of the company's principal pipe line facilities and of the points at which service is rendered under the tariff. Where the company's rate schedules are generally available by area, the boundary lines of the rate zones or rate areas should be shown and the areas or zones identified. The map shall be revised annually to reflect major changes if any.

§ 154.38 Composition of rate schedule.

The sheets of a rate schedule shall contain a statement of a rate or charge and all terms and conditions governing its application, arranged as follows:

(a) Title. Each rate schedule shall have a title consisting of a designation (see § 154.34), and a statement of the type or classification of service to which it is applicable.

(b) Availability. This paragraph shall describe the conditions under which the rate is available, and, if necessary, the geographic zone in which available.

(c) Applicability and character of service. This paragraph shall fully describe the kind or classification of service to be rendered.

(d) Statement of rate. (1) Except as permitted in §§ 154.52 and 154.82, all rates shall be clearly stated in cents or in dollars and cents per unit. Only the rates and charges to be used in current billing shall be included in the rate schedules.

(2) A rate having more than one part shall have each part set out separately under appropriate headings such as: Demand Charge, Commodity Charge, etc. The minimum bill and other pro

visions affecting charges shall not be included in this paragraph, but shall be included in subsequent paragraphs.

(3) No rule, regulation, exception or condition such as tax, commodity price index, wholesale price index or other similar price adjustments or periodic changes shall be included in the rate schedule or any other part of the tariff which in any way purports to effect the modification or change of any rate or charge specified in the rate schedule, or the substitution therefor of any other rate or charge: Provided, however, a natural-gas company may state in the service agreement or in rate schedules filed pursuant to § 154.52 that it is or will be its privilege, under certain specified conditions, to propose to the Commission a modification, change or substitution of the then effective rate or charge: Provided further, That no such clause may effectuate a change in an effective rate or charge except in the manner provided in section 4 of the Natural Gas Act, as amended, and the regulations in this part.

(4) A natural gas pipeline company may submit a purchased gas cost adjustment provision (PGA clause) to flow through changes in its cost of purchased gas.' No PGA clause shall become effective until approved by the Commission. No request for approval of a PGA clause will be considered by the Commission unless the proposed PGA clause indicates the following terms and conditions:

'For the purposes of this subsection, purchased gas cost represents the cost of wellhead purchases, field line purchases, plant outlet purchases, transmission line purchases, and from pipeline production that qualifies for and is being afforded area or nationwide rate treatment. Nonconcurrent exchange transactions may be reflected as a cost of purchased gas. If a company has underground storage, the cost of purchased gas included in Accounts 800, 801, 802, 803, and where applicable, Account 806, shall be debited or credited to reflect the net injections or withdrawals from underground storage. This adjustment shall be prorated between pipeline and producer supply. New pipeline supplies (contractual daily delivery obligations) and liquefied natural gas, synthetic natural gas, and gas from coal gasification shall not be reflected in a PGA clause without prior Commission approval.

(i) The proposed PGA clause shall be accompanied by a cost study in conformity with the requirements of § 154.63. This study must be based upon actual costs for the 12 months of most recently available actual experience and may include annualization for changes which actually occurred in the 12 month period. If a cost-of-service study having a test period ending less than 12 months prior to the date of submission of the proposed PGA clause is on file in another docket, that cost study may be utilized in lieu of filing a cost study with the proposed PGA clause.

(ii) The method(s) of determining changes in cost of gas purchased from producer and pipeline suppliers shall be separately established. Increases in cost of gas purchased from small producers shall be shown separately, and the provisions of Order No. 428 shall apply to these increases. Producer rate changes shall be applied to the commodity component of the existing rates of a pipeline company's two-part rates and to the volumetric rates of a pipeline company's one-part rates. Pipeline supplier rate changes shall be applied "as billed" to a pipeline company's two-part rates and shall be applied to a pipeline company's volumetric rates in the manner which maintains the pipeline company's existing one-part rate design.

(iii) The purchased gas cost adjustment shall be reflected in the company's rates only when it represents a dollar amount equal to at least 1 mill ($0.001) per Mcf of annual jurisdictional sales. This limitation is not applicable to the unrecovered purchased gas costs for which provision is made in subdivision (iv) of this subparagraph.

(iv) Rate changes shall be computed and filed not more frequently than semiannually to reflect the current cost of producer purchases. Rate changes shall be computed and filed to coincide with the effective date of pipeline supplier rate changes if the change represents a change of at least 1 mill ($0.001) per Mcf of annual jurisdictional sales.

(a) To assure the recovery of all purchased gas costs, the Commission

Staff has been directed to propose an accounting change to the Uniform System of Accounts for natural gas companies. The new account will provide that the costs of purchased gas, which are includible in the utility rate schedules on file with the Commission and are not subject to immediate tracking provisions, may be deferred and recovered under future rate schedules. This account will also be used to accumulate purchased gas cost reductions that cannot be incorporated into the existing tariff.

(b) After the initial 6-month period following the effectiveness of the PGA clause and after the company has chosen to maintain an unrecovered purchase gas cost account, the company shall adjust its rate(s), either positively or negatively, to include a surcharge to recover or return the balance which has accumulated in the unrecovered purchase gas cost account in the preceding 6-month period. This procedure will be followed in each succeeding 6-month period.

(v) The company shall file with the Commission and post pursuant to § 154.16 at least 30 days prior to the date on which any change(s) in its existing rates is to become effective, a single tariff sheet, entitled Original PGA-1, which contains the information in the margins as set out and required in § 154.33(d) and which shows the following:

Simultaneously with the filing of the above described tariff sheet, the company shall furnish the Commission, jurisdictional customers, and interested state commissions a report containing detailed computations which clearly show the derivation of the Current Adjustment to be applied to its existing rates. Exhibit A3 hereto details the information which is necessary for the Commission to verify the accuracy of the proposed adjustment. In the event the material submitted is deficient, the company will be notified of the deficiencies. No filing date will be assigned until the deficiencies are eliminated.

(vi)(a) Upon the expiration of 36 months after the effective date of the PGA clause, the company shall file a tariff sheet(s) restating its rates to establish a new Base Tariff Rate. The Company shall state its agreement that this filing will automatically be subject to refund concurrently with the filing at the end of 36 months of the tariff sheets establishing a new Base Tariff Rate until an agreement is reached or a Commission determination is made. With this tariff sheet(s) the company shall file a study in the form and with the content prescribed by § 154.38 of the Regulations, except Statements O and P, to support the new Base Tariff Rate. (If the Company has a section 5(a) case pending a final order or has made a section 4(e) filing for which the proposed rates would not become effective before termination of the 36-month period, a study from that proceeding may be utilized.) This study shall be based upon actual costs for the twelve months of most recently available experience, provided that the 12-month period used ends not more than 4 months prior to the expiration of the 36-month period. Annualization for changes which actually occurred in the 12 months will be permitted. This study shall be served on the company's jurisdictional customers and interested State commissions concur

3 Filed as a part of the original document.

rently with the Company's filing with the Commission.

(b) If a section 4(e) case is filed before the expiration of the 36-month period, a new 36-month period will start running when the proposed rates go into effect. Rates determined by the Commission in a section 4(e) or a 5(a) proceeding or rates in a settlement agreement approved by the Commission shall establish the new Base Tariff Rate when they become effective pursuant to a final order, and a new 36-month period will start running.

(c) If either as a result of conferences among the company, its jurisdictional customers, interested State commissions, and the Commission staff, or as a result of Commission determination after hearing, it is found, based on the aforementioned study, that the jurisdictional cost of service is less than the jurisdictional revenues collected for the same 12-month period, as adjusted, the company shall restate its Base Tariff Rate, shall file with the Commission a revised tariff sheet(s) reflecting a reduction in its jurisdictional rates by an amount

equal to the excess revenues agreed upon or determined, and shall refund to its jurisdictional customers any excess amounts collected subject to refund to the date of billing under the revised tariff sheets, with interest to that date. This refund obligation shall be limited to the amount collected in excess of the old Base Tariff Rate, and rate reductions, if any, below the old Base Tariff Rate shall be prospective from the date of the Commission's final order determining a new Base Tariff Rate.

(vii) The jurisdictional portion of all refunds received from suppliers (including interest received) applicable to purchases after a PGA clause becomes effective shall be flowed through to the company's jurisdictional customers. If the company utilizes deferred accounting for unrecovered purchased gas costs, the jurisdictional portion of all refunds received (including interest received) shall be credited to the unrecovered purchased gas cost account. If the company does not utilize deferred accounting and holds supplier refunds

more than 30 days, the jurisdictional portion of supplier refunds (including interest received) applicable to purchases after a PGA clause becomes effective shall be flowed through to the company's jurisdictional customers with interest. Any requirement for the serving and filing of reports, showing details of the computations of any such refunds, shall be either as agreed in settlement discussions held among the company, jurisdictional customers, interested State commissions, other interested parties, and the Commission staff, or as prescribed by Commission order.

(5)(i) Commission approval may be requested of rate treatment for RD&D expenditures of $50,000 or more related to a project undertaken by the company or as part of a project undertaken by others, or for a group of projects which, in the aggregate, cost $50,000 or more when advance assurance of rate base treatment is desired. This approval may be requested regardless of whether the RD&D is undertaken by the utility or by other party or organization. Approval requests shall describe the project in such detail so as to satisfy the Commission that the project expenditures involved qualifies as being valid, justifiable, and reasonable. In addition, the request shall specifically include the estimated cost of the project and a description of utility's expenditure percentage in the total project program. When a utility participates in a joint project, the contractual agreements should provide the utility complete access to cost records and results related to the project. Records shall be so kept that unscheduled progress reports may be called for as determined by the Commission.

Approval requests shall justify any conduct of or partial support of largescale demonstration facilities by clearly identifying and justifying the portions of the capital and operating costs which require the high risk financial support necessary to the pursuit of RD&D. The justification of support for a large-scale demonstration facility shall include a statement as to the planned accounting treatment of revenue which may be derived from the facility's product and of proceeds which

may be derived from the sale of the facility.

(ii) Where more than one jurisdictional company proposes to support an RD&D organization as defined below, an approval request may be submitted to the Commission by the RD&D organization covering the organization's RD&D program as defined below. Approval by the Commission of such RD&D program shall constitute approval of individual companies' contributions to the RD&D organization. Organizations eligible to receive contributions from companies and to request program approval from the Commission under this section may be RD&D organizations broadly supported by a number of energy industry sectors (e.g., natural gas, electric power, petroleum, coal, nuclear energy); RD&D organizations broadly supported by a single industry sector; regional organizations that work primarily on problems of a regional nature; or consortia of companies that jointly support RD&D programs for the collective benefit of their ratepayers.

(iii) RD&D organizations or individual jurisdictional companies requesting RD&D approval shall annually submit a five-year program plan at least 180 days prior to the commencement of the five-year period of the plan. The plan shall clearly state the objectives within and beyond the fiveyear period and clearly relate the objectives to the interests of the ratepayers, the public, and the industry and to the objectives of other major research organizations, particularly the U.S. Energy Research and Development Administration. The plan shall contain sufficient budget, technical, and schedule details to afford an understanding of the work to be performed, to allow an assessment of the probability of success, and to permit comparison with other organizations' research plans. The commencement date and expected termination date for individual research, development, and demonstration projects to be initiated during the first year of the plan will be given along with expected annual costs. The plan shall discuss the RD&D efforts and progress since the preparation of the program plan

submitted the previous year and shall explain any changes that have been made in objectives, priorities, and budgets since the plan of the previous year. The plan shall identify all jurisdictional companies that will support the program and their budgeted support. The plan shall identify those persons involved in the development, review, and approval of the plan and shall state the amount of effort contributed and the degree of control exercised in each. The principal tests for the adequacy of proposed plan shall be the following guidelines.

(a) Evidence that the RD&D objectives of the company or research organization have been clearly established.

(b) Evidence that the plan evolves from these RD&D objectives and adequately utilizes the viewpoints of scientific, engineering, industry, economic, consumers and environmental interests.

(c) Evidence that an effective mechanism exists and is used for coordinating this research and development plan with other relevant efforts of national scope.

(d) Evidence that the project or program is well conceived and has a reasonable chance of benefitting the ratepayer in a reasonable period of time, having due regard to the basic, exploratory or applied nature of each submitted RD&D project.

(e) Evidence that whatever achievements may result, including the knowledge gained or technology developed from the RD&D effort, if any, will accrue to the benefit of the sponsoring jurisdictional company(s) and its/their customers.

(iv) Within 90 days of filing of the five-year RD&D plan as defined above, the Commission will state its decision with respect to acceptance, partial acceptance, or rejection of the plan, or, when the complexity of issues in the plan so requires, will set a date certain by which a final decision will be made, or will order the matter set for hearing. Partial rejection of a plan by the Commission will be accompanied by a decision as to the partial level of acceptance which will be proportionally applied to all contributions listed for jurisdictional companies in