ties for the production, transportation, or sale of natural gas as Exhibit A (§ 157.23). The map need be only of sufficient scale and in sufficient detail to show the general geographical location of the properties.

(a) The location of gas fields from which gas is or will be produced by applicant or affiliated companies or at which gas is or will be purchased by applicant.

(b) The location of applicant's principal pipe lines and the diameters thereof.

(c) The points of connection with the facilities or pipe-line systems of other companies.

(d) The designation of points of delivery of gas from applicant's system, including

(e) The communities served or proposed to be served at wholesale and at retail, indicating wholesale by a small square and retail by a small circle.

(f) The designation of points of delivery of gas from applicant's system, including points of delivery to main line industrial customers purchasing 100,000 Mcf or more per year. Such main line industrial customers are to be designated I-1, I-2, etc., as indicated in § 157.24(a)(4)(iv).

Exhibit B. Contracts. Conformed copy of each contract for sale or transportation of gas for which a certificate is requested: Provided; however, That contracts on file with the Commission in other proceedings may be included by reference as heretofore provided in § 157.24(b); And provided further, That acceptance of contracts hereunder shall not be construed as approval of the rates therein contained under Part 154 hereof or under the Natural Gas Act. On or after April 2, 1962, the application shall be rejected if any contract submitted in support thereof contains any price-changing provisions other than those defined as permissible in § 154.93 of this chapter. The application will be rejected if any contract, executed after February 1, 1967, submitted in support thereof contains any makeup provisions proscribed by § 154.103 of this chapter. Exhibit C. Certification required by the Natural Gas Pipeline Safety Act of 1968. The applicant shall certify that it will design, install, inspect, test, construct, operate, replace, and maintain any gathering facilities used in the proposed sale or transportation for which a certificate is requested in accordance with Federal safety standards and plans for maintenance and inspection or shall certify that it has been granted a waiver of the requirements of the safety standards by the Department of Transportation in accordance with the provisions of section 3(e) of the Natural Gas Pipeline Safety Act of 1968. Pertinent details concerning the waiver shall be set forth. The Federal standards are not applicable to gathering facilities outside the following

areas:

(a) An area within the limits of any incorporated or unincorporated city, town, or village;

(b) Any designated residential or commercial area such as a subdivision, business or shopping center, or community development.

Applicants whose gathering facilities lie outside the areas where Federal safety standards are applicable shall so state in Exhibit C in lieu of submitting the required certification.

(Secs. 4, 5, 52 Stat. 822, 56 Stat. 83; 15 U.S.C. 717c, 717d; secs. 3(e), 7, 8, 82 Stat. 721, 725; 49 U.S.C. 1672, 1676, 1677)

[Order 174-B, 19 FR 8810, Dec. 23, 1954, as amended by Order 334, 32 FR 866, Jan. 25, 1967; Order 430, 36 FR 7052, Apr. 14, 1971]

§ 157.26 Form of filing.

Except with respect to the number of copies required, an application filed under § 157.23 shall be in compliance with § 1.15 and § 1.17 of this chapter, and in addition the original of the application (which shall include the originals of all exhibits accompanying said application) shall be verified under oath by a person having knowledge of the matters therein set forth. [Order 196, 22 FR 2882, Apr. 24, 1957]

§ 157.27 Other information.

Upon request by the Secretary, applicant shall submit such additional data, information, exhibits, or other detail as may be specified.

[Order 221, 25 FR 5334, June 15, 1960]

§ 157.28 Temporary authorizations.

Upon the filing of an application for a certificate of public convenience and necessity under §§ 157.23 to 157.27, and a rate schedule under §§ 154.91 through 154.102 of this chapter, an independent producer in the event of an emergency may request temporary authorization to initiate the sale or transportation of natural gas in interstate commerce pending final Commission action under sections 4 and 7 of the Natural Gas Act.

(a) As part of its application hereunder, or separately, the applicant independent producer must file, or have on file (1) a statement setting forth the facts constituting the emergency requiring such action, which emergency

may include, inter alia: drainage, threatened loss of lease, flaring, economic hardship resulting from payment of shut-in royalties, or similar situations; (2) a statement identifying the contract tendered as the rate schedule intended to be effective for the sale or transportation under this temporary authorization; and (3) a statement describing, generally, the facilities necessary to enable the purchaser to take delivery of the gas proposed to be sold or transported.

(b) Any temporary certificate issued under this section will provide that service must commence within 90 days of the date of issuance thereof, except that for service from an offshore area, within the Federal domain or the disputed offshore area, service must commence within 30 days of the completion by the purchaser or transporter of construction of the facilities required to commence such service.

(c) The applicant may, within 30 days of the date of issuance, file in writing its acceptance or rejection of 'the temporary certificate. If accepted, the temporary certificate shall be effective upon the date of receipt of the acceptance by the Secretary. If no acceptance or rejection has been filed within said 30 days, the temporary certificate shall be deemed to have been accepted and shall be effective on that date. However, no temporary authorization under this section will be effective until such time as the purchaser or transporter of the natural gas to be sold thereunder is authorized under section 7 of the Natural Gas Act to construct and operate such facilities as may be necessary to receive and transport the gas.

[Order 396, 35 FR 5219, Mar. 28, 1970]

§ 157.29 Exemption of Emergency Sales or Transportation.

Public interest does not require the issuance of a certificate authorizing the sale or transportation of natural gas by an independent producer where imminent danger to life and property can be eliminated by such sale or transportation or where the sale or transportation of natural gas is necessary to assure maintenance of adequate natural gas service on the pur

chaser's pipeline system or where serious curtailment of service exists or is threatened on purchaser's system because of failure of facilities or failure or curtailment of supply or unusual and unexpected demand on such facilities or supply, and where such sale or transportation is limited to a single period of not more than sixty (60) days: Provided, however, That:

(a) Every person undertaking such a purchase shall so advise the Commission immediately by telegram or letter stating briefly the circumstances and shall within ten (10) days file a statement in writing and under oath, together with four (4) conformed copies thereof, setting forth the purpose and character of the sale, transportation, or purchase, the rate being charged, the estimated volumes to be delivered, the seller of the gas, the date of initial delivery, the location of the sale, the facts warranting invocation of this section, and the anticipated period of the stated emergency, and, upon completion of the sale, shall advise the Commission of the actual volumes delivered and the price received therefor under contract pursuant to this section.

(b) Emergency operations undertaken without certificate authorizations pursuant to paragraph (a) of this section shall be discontinued upon the expiration of the 60-day period. Each person undertaking any such construction or operation, pursuant to this section desiring to retain such facilities in place shall file an application for a certificate of public convenience and necessity pursuant to the regulations under the Natural Gas Act with the Commission prior to the expiration of the exempt period provided herein.

(c) No emergency sale or transportation of natural gas in interstate commerce undertaken pursuant to the authority of this section shall be extended beyond the sixty (60) day period unless the seller shall have filed an application for a permanent or temporary certificate pursuant to 18 CFR 2.56(a), 2.70(b)(3), 2.75, or 157.28 prior to the expiration of the sixty (60) day period. Any such continuation of deliveries at a rate in excess

of the rate prescribed in

§ 2.56(a) (18 CFR 2.56(a)) will be subject to refund if the rate is in excess of the rate finally found to be appropriate by the Commission.

(d) All deliveries made pursuant to this section from the offshore Federal domain shall be made at the rate prescribed in § 2.56(h).

[Opinion 699-B, 39 FR 33206, Sept. 16, 1974, as amended by Order 565, 42 FR 29003, June 7, 1977]

§ 157.30 Abandonment of service.

(See § 2.64 of this chapter.)

(a) No independent producer as herein defined shall abandon all or any portion of its facilities subject to the jurisdiction of the Commission, or any service rendered by means of such facilities, without the permission and approval of the Commission first had and obtained upon application (original and 3 copies), after due hearing, and a finding by the Commission that the available supply of natural gas is depleted to the extent that the continuance of service is unwarranted, or that the present or future public convenience or necessity permit such abandonment:

Provided, however, That nothing herein shall be construed as interfering or as intended to interfere with or to prevent compliance by a natural-gas company with valid conservation orders of a State agency relating to the production or gathering of natural gas.

(b) Every application for abandonment of service under this section shall contain, on the first page of such application, a summary, in the form specified in § 250.7, of each contract for sale or transportation of gas for which abandonment authorization is requested.

[Order 278, 29 FR 3700, Mar. 25, 1964; Order 297, 30 FR 6518, May 12, 1965, as amended by Order 340, 32 FR 5990, Apr. 14, 1967] § 157.39 Applicability of §§ 157.23 through 157.30.

Sections 157.23 through 157.30 shall be applicable to independent producers as defined in § 154.91 of this chapter, but, with the exception of § 157.30, shall not apply to those independent producers who are subject to § 157.40. [Order 428B, 36 FR 13384, July 21, 1971]

§ 157.40 Exemption of small producers from certain filing requirements.

(a) Definitions. (1) A “small producer" is an independent producer of natural gas as defined in § 154.91 of this chapter who is not affiliated with a Class A natural gas pipeline company and whose total "jurisdictional sales" on a nationwide basis, together with such sales by "affiliated producers," were not in excess of 10,000,000 Mcf at 14.73 psia during the preceding calendar year. A small producer as defined above will retain small producer status through March 31 of the calendar year following that in which its total jurisdictional sales (including sales by affiliates) first exceed the 10,000,000 Mcf limitation, except that if a small producer merges with, acquires, is acquired by, or otherwise becomes affiliated with (i) another producer or a jurisdictional pipeline company other than Class A and the total jurisdictional sales volumes of such parties exceeded 10,000,000 Mcf in the immediately preceding calendar year, or (ii) a jurisdictional Class A pipeline company, said small producer's status as such will terminate effective as of the date of such merger, acquisiton or other type of affiliation.

Upon termination of small producer status, the producer or its survivor (successor) will be considered to be a large producer. When a producer loses its small producer status, it shall give notice thereof to its purchasers and to the Commission within 30 days of the effective date of such occurrence. The annual statement required by § 250.11 of this chapter shall constitute notice to the Commission unless the loss of small producer status is due to merger, affiliation, etc.

Where dissolution, divestiture or other severing of affiliation occurs involving large producers, a surviving producer will be considered as having small producer status as of the date of such occurrence provided that jurisdictional sales of natural gas during the preceding calendar year attributable to the reserves acquired or retained by such surviving producer as a result of such dissolution, divestiture

30-039 0787

or other severance, together with any other jurisdictional sales it made in that year, did not exceed 10,000,000 Mcf, and the producer meets the other qualifications also.

(2) As used in this section, the term "jurisdictional sales” includes: (i) Volumes sold under limited-term and optional procedure certificates (§§2.70 and 2.75, respectively, of this chapter), (ii) volumes sold under the emergency provisions of the Natural Gas Act and the Commission's regulations thereunder, (iii) volumes attributable to royalty and overriding royalty interests where such volumes were marketed with the related working interests of the producer in question, (iv) volumes of gas paid for but not taken under prepayment clauses and (v) volumes of gas sold by others in the proportion that the independent producer seeking to come within this section, or an affiliate, has an interest in such sales. However, sales made pursuant to percentage sales contracts (§ 154.91(e) of this chapter), even where jurisdictional, are not to be included. For the further purposes hereof, each partner in a limited partnership will be considered as the seller of that portion of the total volumes sold by the partnership which corresponds to that partner's interest in the partnership, whether such partner be a general or a limited partner.

(3) "Affiliated producers" are persons who, directly or indirectly, control, or are controlled by, or are under common control with, the applicant producer. Such control exists if the producer has the power to direct or cause the direction of, or as matter of actual practice does direct, the management and policies of another producer, whether such power is exercised alone or through one or more intermediary companies, or pursuant to an agreement, and whether such power or practice is established through a majority or minority ownership or voting of securities, common directors, officers or stockholders, voting trusts, holding trusts, associated companies, relationship of blood or marriage, or any other direct or indirect means. For the further purposes of this section, the term "agreement"

shall not include any agreement for the operation of a natural gas producing property or a plant processing natural gas or any joint venture, partnership, nominee, or other type of agreement pertaining to the joint exploration for and development and operation of oil and gas properties, unless such agreement otherwise establishes the power of one producer to direct or cause the direction of the management and policy of another producer. In limited partnerships, general partners shall be considered affiliated with each other, but limited partners shall not be considered affiliated with each other or with the general partners where no affiliations exist outside of the partnerships. Also, for the further purposes of this section, the existence of one or more directors of a corporation in common with another corporation shall be deemed a conclusive presumption of affiliation and control.

(4) "Small producer reserves" are: (i) Reserves developed by a natural gas company while in the status of a "small producer" as defined in paragraph (a)(1) of this section; (ii) developed reserves held on March 17, 1971, by a small producer, regardless of whether such reserves were developed by a large or small producer, and (iii) reserves developed by a large producer which was formerly a small producer underlying acreage previously dedicated to the interstate market under that producer's small producer certificate pursuant to a contract dated while the producer was in small producer status. In the case of a limited partnership or joint venture having both large and small producers as partners or joint venturers, reserves developed by the partnership or joint venture shall be allocated as large producer and small producer reserves in proportion to their respective percentages of ownership of the partnership at the time the reserves are developed. Reserves attributable to royalty and overriding royalty interests shall have the same classifications as the working interests to which they relate.

(5) "Small producer sales" are sales of natural gas made pursuant to authorization granted under this section from small producer reserves, whether

such sales are made under a small producer's or any other party's contract. Percentage sales and sales made under certificates issued pursuant to §§ 2.70 and 2.75 of this chapter are not considered small producers sales.

(b) Procedure for securing blanket small producer certificate. (1) A small producer may apply for a blanket certificate to cover all of its existing and future jurisdictional small producer sales, as well as small producer sales attributable to interests of small producer co-owners specifically identified by the applicant. Sales which do not qualify as small producer sales, including sales from certain large producer working interests but excluding percentage sales and sales authorized pursuant to §§ 2.70 and 2.75 of this chapter, may be covered by the small producer certificate, subject to the rate limitations applicable to comparable large producer sales or otherwise applicable, as set forth in paragraph (c) of this section, provided that the applicant clearly identifies any such other sales.

(2) With respect to sales under any contract of the small producer applicant of gas attributable to large producer working interests, such sales may only be covered by the small producer certificate if the small producer is the operator of the producing properties involved and the total of the sales attributable to all of such large producer working interests (including royalty interests related to such working interests) does not exceed 20 percent of the total sales under such contract during a calendar year. Following any calendar year during which this limit is exceeded, all large producers involved shall be responsible for obtaining separate certificate authorization and filing a rate schedule for their working interests in the sale in question. Where large producer interests in a particular sale are to be covered by a small producer certificate, the applicant shall list all large producers who have committed their working interests under the contract in question, together with their respective percentages of ownership, and clearly specify which of such interests

are to be considered covered by the small producer certificate.

(3) For the purposes hereof, interests in a limited partnership shall be treated as comparable to working interests in the properties of the partnership. General partners in limited partnerships shall be considered as comparable to operators of producing properties. Thus, if such a general partner already has a small producer certificate in its name when the limited partnership is formed, it need only file the certification provided for in paragraph (b)(6) of this section in order to have such certificate cover the sales by the limited partnership, subject to the limitation set forth in paragraph (b)(2) of this section as to coverage of large producer interests. Coverage of a limited partnership's sales under a general partner's certificate, however, shall not constitute authorization for other partners, limited or general, to make sales outside of the partnership.

(4) The application shall contain all of the information required by the form prescribed in § 250.10 of this chapter. A conformed copy shall be served upon each of the applicant's purchasers.

(5) Each applicant for a small producer certificate must file a separate application therefor. However, affiliated producers may file a joint application, but each such affiliate which is to be covered must be clearly identified. Coverage will not extend to affiliates not so identified.

(6) If after filing a small producer application the producer desires to have its small producer certificate cover additional sales which are other than small producer sales but which are not otherwise prohibited from being covered, it need only submit to the Commission a certification to that effect, under oath, and furnish copies of such certification to affected parties. The certification should clearly identify all interests to be covered and show the percentage of ownership for each large producer interest to be covered. No further action by the Commission will be necessary other than acknowledgement by the Secretary. Such coverage will be effective as of