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the date of filing of the aforesaid Certification with the Commission. (c) Rate and certificate regulation under blanket certificate. (1) Small producers certificated hereunder shall be authorized to make Small producer sales nationwide pursuant to existing and future contracts at the following rate levels, to the extent contractually permitted: (i) All sales of natural gas by Small producers for resale in interstate commerce made in accordance with, and under the provisions of, Opinion NOS. 749, et seq., shall be made at a maximum base rate of 35.0 cents per Mcf at 14.73 psia except as provided for below: (A) For gas produced in the Permian Basin Area, as defined by Opinion Nos. 662 and 662-A, and sold pursuant to contracts dated on or after October 1, 1968, small producers shall be entitled to collect a maximum base rate of 40.5 cents per Mcf at 14.73 psia. (B) For gas produced in the Rocky Mountain Area, as defined in § 154.109b of this chapter, and sold pursuant to contracts dated on or after October 1, 1968, Small producers shall be entitled to collect a maximum base rate of 40.5 cents per Mcf at 14.73 psia. (ii) All sales of natural gas by Small producers for resale in interstate commerce that qualify for the base ceiling rate (52.0 cents per Mcf at 14.73 psia, with escalations of 1.04 per annum commencing January 1, 1977) set forth in § 2.56a(a)(5) of the Commission's tatements of General Policy and Interpretations, as prescribed by Opinion No. 770, et seq., shall be made at a maximum base rate of 130 percent of that ceiling rate. (iii) All sales of natural gas by Small producers for resale in interstate commerce that qualify for the base ceiling rate (93.0 cents per Mcf at 14.73 psia, with escalations of 1.0 cent per annum commencing January 1, 1977) set forth in $2.56a(a)(3) of the Commission's Statements of General Policy and Interpretations, as prescribed by Opinion No. 770, et seq., shall be made at a maximum base rate of 130 percent of that ceiling rate.

(iv) All sales of natural gas by Small producers for resale in interstate commerce that qualify for the base ceiling rate ($1.42 per Mcf at 14.73 psia, with escalations of 1.0 cent per quarter commencing October 1, 1976) set forth in § 2.56a(a)(1) of the Commission's Statements of General Policy and Interpretations, as prescribed by Opinion No. 770, et seq., shall be made at a rate no higher than that ceiling rate. Each of such small producer base rates is subject to the same adjustments as may be applicable from time to time to the corresponding base rates of large producers under Commission orders of general applicability. Each applicable rate may be charged and received by the small producer and paid by the purchaser as the lawful, just and reasonable rate approved by the Commission pursuant to Sections 4, 5 and 7 of the Act. (2) Rate regulation as prescribed herein shall not apply to any jurisdictional sales made by a Small producer under its small producer certificate other than its Small producer Sales as defined in paragraph (a)(5) of this section. Any such other sales made under the small producer certificate shall be subject to the rate limitations applicable to comparable large producer sales or otherwise applicable. (3) Any amounts collected attributable to the Small producer rate differential for sales of gas which are ultimately determined not to be small producer sales shall be subject to refund with interest at the rate prescribed in § 154.102 of this chapter. (4) Nothing done hereunder shall be recognized by the Commission as triggering any escalation clause in an existing contract involving a producer not covered by a small producer certificate, except as provided in paragraph (f) of this section. (5) No Small producer Shall be relieved from compliance with Section 7(b) of the Natural Gas Act with respect to any jurisdictional sales made by such producer (see §§ 157.30 and 157.39 of this part). (d) Duration of the eremption. The exemption authorized hereunder shall remain in effect until the producer granted the exemption no longer qualifies as a small producer (i.e., through March 31 of the year immediately following the calendar year in which the producer's jurisdictional Sales, including affiliates' sales, first exceed the 10,000,000 Mcf limitation, Or until the producer otherwise loses its small producer status as set forth in paragraph (a)(1) of this section) or fails to comply with the terms of the exemption. The Small producer certificate shall automatically terminate simultaneously with the loss of Small producer status as to new sales under contracts dated on or after the termination date, but the exemption will still be effective as to those Sales under contracts dated prior to the termination date which were previously covered by the Small producer certificate (except as provided in paragraph (f) of this section), including sales which are other than Small producer sales and Which are made at rates limited to those allowed for comparable large producer sales or otherwise limited. Upon termination of the exemption, the producer will be required to file separate certificate applications and individual rate schedules for future Sales. (e) Effective date and reinstatement of small producer certificate. A Small producer certificate issued pursuant to this section shall be effective as of the date of filing if the application therefor was filed after May 3, 1971. If the exemption is terminated pursuant to paragraph (d) of this section and the producer subsequently regains small producer status, it must file an application to reinstate its small producer certificate with respect to new small producer sales, which reinstatement, when approved, will be effective as of the filing date of the application therefor. The application for reinStatement shall contain the same information as is required for a new small producer certificate, but information previously filed may be incorporated by reference. (f) Filings by large producers with respect to related resales and sales from small producer reserves acquired in place. (1) A large producer (including, for the purposes hereof, a producing affiliate of a Class A natural gas

pipeline company) may file for the price Specified in its related contract for the resale of any natural gas sold to it by a small producer pursuant to the exemption authorized hereunder. In determining whether to accept or Suspend Such a filing, the Commission shall be guided by the rate level Sought and the size of the differential between the purchase and resale price. A large producer under an area rate clause in its resale contract may file for the rate paid by it for gas purChased from a Small producer as long as the rate does not exceed the appliCable just and reasonable rate preScribed in paragraph (c) of this section. (2) A large producer which acquires Small producer reserves in place on or after July 14, 1977, regardless of whether such acquisition is by assignment, merger, acquisition of the stock of a Small producer entity or other means, may, if contractually authorized, charge the applicable Small producer rates for any jurisdictional sales from such reserves; Provided, however, That a large producer shall not be entitled to Small producer rates (i) for sales from Small producer reserves acquired by conversion of an overriding royalty interest to a working interest or (ii) for sales from Small producer reserves being made on July 13, 1977, which did not qualify as Small producer sales on that date (e.g., percentage sales and sales from Small producer reserves acquired in place by a large producer on Or before that date). (g) Reports by purchasers from Srmall producers. (1) By April 1 and September 1 of each calendar year, all natural gas pipeline companies and large producers which commenced new or additional purchases of natural gas from Small producers pursuant to small producer certificates held or applied for by the latter shall file reports covering the respective six-month periods July 1 through December 31 and January 1 through June 30 inmmediately preceding each Such report date, showing the following information: (i) In alphabetical order, the exact names of all Small producers from whom new or additional purchases were commenced during the six-month period covered by the report. (ii) The docket number of each producer's Small producer certificate or application therefor. (iii) The date of each contract or contract amendment covering the new or additional purchase of gas. (iv) The date each purchase commenced. (v) The initial contract rate for each purchase. (vi) The just and reasonable rate applicable at the time service commenced. (vii) The source of the gas (field or area, county or parish and state). (viii) Estimated annual volumes for each new or additional purchase (include only those volumes to be covered by the small producer certificate listed). (2) By April 1 and September 1 of each calendar year, natural gas pipeline companies and large producers shall also file reports of any cessations of service to them by small producers occurring during the respective sixmonth periods July 1 through December 31 and January 1 through June 30 immediately preceding each such report date, showing the following information: (i) In alphabetical order, the exact names of all such small producers. (ii) The docket number of the Small producer certificate under which each terminated service had been rendered. (iii) The date of the contract under which each service had been rendered and also of any cancellation agreement between the parties, designating whether the contract is cancelled in whole or in part. (iv) The source of the gas (field or area, county or parish, and state). (v) The date of each cessation of Service. (vi) The reasons for each cessation of Service. (h) Resale authorization for large producer. A large producer who has filed on or after July 15, 1971, an application for a certificate of public convenience and necessity for the resale of natural gas purchased from a Small producer authorized to sell such gas pursuant to the blanket small pro

ducer certificate provisions in paragraph (c) of this section may resell such gas at any time after the filing of such certificate application pending final Commission action thereon. Any amounts Collected by a large producer for resales made pursuant to this paragraph in excess of the rate finally determined to be required by the public convenience and necessity for such reSales shall be subject to refund with interest at the rate prescribed in § 154.102 of this chapter.

[Order 568, 42 FR 39095, Aug. 2, 1977]

§ 157.41 Condition for producer certificates of public convenience and necessity. On and after July 30, 1976, all certificates of public convenience and necessity for the sale of natural gas for resale in interstate commerce shall be conditioned as follows: All persons making jurisdictional sales pursuant to the authority granted by this certificate are hereby given notice that the contractual obligations between the buyer and the seller are incorporated into the certificate obligations, and that the certificate is further conditioned to require that the seller shall observe the standard of a prudent operator to develop and maintain deliverability from reserves dedicated hereunder. [Order 539–B, 41 FR 32885, Aug. 6, 1976; Order 539–B, 41 FR 55707, Dec. 22, 1976]

§ 157.42 Exemption of certain emergency gas transportation arrangements during the coal emergency period.

(a) Purpose. The purpose of this section is to encourage pipelines and local distribution companies to provide such transportation services as are necesSary to permit qualifying sellers to make Short-term sales of natural gas in interstate commerce to eligible electric utilities during the coal emergency period.

(b) Definitions. For purposes of this Section—

(1) “Qualifying seller” means

(i) Any producer of natural gas proposing pursuant to this section to sell natural gas—

(A) Which is not produced from the Outer Continental Shelf, and

(B) The sale or transportation of which had not been, immediately before the date on which a contract Gas Act authorizing the transportation or sale in interstate commerce of natural gas sold by a qualifying seller to an eligible electric utility for delivery commencing during the coal emergency period and ending not later than 60 days after deliveries commence or May 31, 1978, whichever Occurs first. Any interstate transportation or sales contract, as appropriate, under this section shall be subject to the following terms and conditions: (1) Notwithstanding any outstanding Commission order, approved settlement agreement or approved tariff governing transportation services by an interstate pipeline rendering transportation services under this section (hereafter in this section referred to as “transporter”), a transporter may charge and retain an amount for such transportation equal to actual out-ofpocket expenses. Out-of-pocket expenses may include those administrative and general expenses directly associated with such transportation. The purchaser shall provide volumes of natural gas for compressor fuel and for volumes lost and unaccounted for. (2) Any contract for transportation or sale under this section shall provide that the Commission upon request of the transporter or upon its own motion shall have the authority to authorize the transporter to purchase the transported gas for system supply on those days on which the Commission determines the transporter (or local distribution companies served by the transporter) requires such gas for protection of the public health and safety. The transporter may not purchase the transported gas except upon 2 days' notice by the Commission to the eligible electric utility whose gas is to be purchased. If the transporter purchases gas under this subparagraph, the purchase shall be deemed to be a transaction under 18 CFR 2.68, 157.22 or 157.29, as appropriate. (3) Transportation pursuant to this Section shall be subject to interruption by the transporter to the extent the transporter has inadequate capacity available to maintain adequate service to existing customers. (4) Within 24 hours after commencement of deliveries pursuant to this sec

pursuant to this section was entered into, certificated under the Natural Gas Act,

axcept for volumes of gas produced from the Outer Continental Shelf currently transported under certificates authorizing producer reservations and not otherwise currently available to the interstate market, or (ii) Any intrastate pipeline, local distribution company, or Other person (other than an interstate pipeline or a producer of natural gas). (2) “Eligible electric utility” means an electric utility (or other person who has electric generating capacity), with respect to which the Administrator determines that the use of gas purchased pursuant to this section (i) will contribute to alleviating the peril to the national health and safety which attends the continuation of the coal emergency, and (ii) in his judgment (A) will best meet the coal emergency and (B) will serve the public interest. (3) “Interstate pipeline” means any natural-gas company, as defined in section 2(6) of the Natural Gas Act, which is engaged in the transportation by pipeline of natural gas. (4) “Intrastate pipeline” means any person (other than an interstate pipeline) engaged in the transportation by pipeline of natural gas. (5) “Local distribution company” means any person (including a governmental entity) which receives natural gas for local distribution and resale to natural gas users. (6) “Administator” means the Administrator of the Economic Regulatory Administration, or any officer or employee of the United States designated by him. (7) “Coal emergency period” means the period beginning on March 15, 1978, and ending midnight, April 30, 1978. (c) Determination of eligibility. Any determination of the Administrator under paragraph (b)(2) of this section shall be in writing and shall be transmitted to the Commission and to the requesting parties. (d) Eacemption of certain transportation arrangements. The public interest does not require the issuance of a certificate under section 7 of the Natural

ADJUSTMENTS OF ACCOUNTS AND

REPORTS

tion, the transporter shall notify the Commission and the Administrator, by telegram, identifying: (i) the amount of gas to be transported (on a daily basis), (ii) the duration of the transportation, (iii) the date upon which deliveries are to commence, (iv) the seller, (v) the purchaser, (vi) the price of the gas, (vii) the transportation charges and calculations showing their derivation, and (viii) the pipelines participating in the transportation seryice.

(5) Within 10 days after the termination of deliveries, the transporter shall file with the Commission and the Administrator a sworn statement and four conformed copies thereof setting forth the volume of gas delivered and indicating: (i) the total compensation received by the seller, (ii) the rate schedule applicable to the sale, if any, or, alternatively, the method by which the price per Mcf was derived, (iii) the total a nount of compensation received by the transporter (including amounts received for lost or unaccounted for volumes), (iv) the method by which the transporter's compensation was derived, and (v) a detailed description of the end-use of the gas. (Order 4, 43 FR 11693, Mar. 21, 1978)

EFFECTIVE DATE NOTE: The provisions of 8 157.42 expire May 31, 1978.

$ 158.1 Notice of deficiencies.

If, as the result of an examination by a representative of the Commission of the accounts of a person subject to the act and to the Commission's accounting requirements, or of an examination of any statement or report submitted by such person, it appears that the accounts, or any books or records pertaining to or in support thereof, are not being kept and maintained as required by the Commission, or that the statements or reports prepared and submitted are not in proper form, the failure or deficiency will be called to the attention of such person either formally or informally as the circumstances appear to warrant.

§ 158.2 Response to notification.

If, as the result of such formal or informal notice, the matter is not adjusted within the time fixed by said notice, or within a reasonable time in case no date is specified, or if there is a disagreement between such person and the Commission or its representative respecting the application or interpretation of the act or requirements of the Commission with respect to the matter at issue, such person will be requested to advise the Commission in writing within a time to be specified whether it consents to the disposition of the questions involved under the shortened procedure hereinafter provided.

PART 158—ACCOUNTS, RECORDS,

AND MEMORANDA

ADJUSTMENTS OF ACCOUNTS AND REPORTS Sec. 158.1 Notice of deficiencies. 158.2 Response to notification. 158.3 Facts and argument. 158.4 Form and style. 158.5 Verification. 158.6 Determination. 158.7 Assignment for oral hearing. 158.8 Burden of proof. CERTIFICATION OF COMPLIANCE WITH

ACCOUNTING REGULATIONS 158.10 Examination of accounts. 158.11 Report of certification. 158.12 Qualifications of accountants.

AUTHORITY: Secs. 8, 16, 52 Stat. 825, 830; 15 U.S.C. 717g, 7170, unless otherwise noted.

SOURCE: Order 141. 12 FR 8603. Dec. 19. 1947, unless otherwise noted.

$ 158.3 Facts and argument.

If the person consents to the matter being handled under such shortened procedure, the person and any other parties interested, including representatives of the Commission, shall submit to the Commission, within 30 days after the receipt of notice from the Commission to do so, a memorandum of the facts and separately stated, of the argument relied upon, to sustain the position taken respecting the matter at issue together with copies in sufficient number to enable the Commission to retain three copies for its own use and make service in accordance with $ 1.17 of this chapter

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