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(2) "Corporation” includes any corporation, joint-stock company, partnership, association, business trust, recognized group of persons, whether incorporated or not, receiver or receivers, trustee or trustees, of any of the foregoing, but shall not include municipalities as hereinafter defined.

(3) “Municipality” means a town, city, county, or other political subdivision of a State.

(4) "State” means a State admitted to the Union, the District of Columbia, and any organized Territory of the United States.

(5) "Natural gas” means natural gas as it issues from wells or is segregated or recovered in stripping, or by any other method, and shall include such natural gas though mixed with, or modified by, other gas or substance.

(6) "Natural-gas pipe-line company” means a person or corporation engaged in the transmission of natural gas through pipe lines in interstate commerce.

(7) "Natural-gas pipe line” means a main, including its branches, by means of which natural gas is transmitted in whole or in part in interstate commerce, destined in whole or in part for ultimate distribution to industries, the general public, or other consumers, whether or not such line or lines, or portions thereof, are owned or controlled by a single or by several interests.

(8) Natural gas shall be held to be transmitted or transported in interstate commerce if transmitted from a State to any point outside thereof, or between points within the same State but through any point outside thereof, or from or to any place in the United States to or from a foreign country, but only insofar as such transmission takes place within the United States. Every person who so transmits or transports natural gas engages in interstate commerce in natural gas.

(9) "Field gathering line" means a pipe line through which natural gas is transmitted from the well head to the main natural-gas pipe line.

(10) "Low-pressure-distribution lines" or "service lines" mean pipe lines through which natural gas is distributed from the natural-gas pipe line to consumers.

(11) "Commission” means the Federal Power Commission.

(12) "State commission" means the regulatory body of a State or a municipality which has jurisdiction to regulate rates and charges for the sale of natural gas to consumers within such State or municipality, respectively, or which has jurisdiction to regulate the production and sale of natural gas by the producers or gas-land owners.

(13) "Public utility” means any person who engages in the business of producing, transmitting, selling and exchanging, and distributing natural gas for public use.

(14) The verb "control" means to manage or direct in fact, or substantially and purposely to influence the acts or policy, and the noun has a corresponding meaning.

(15) "Depreciation" also includes depletion.

STANDARDS OF APPLICATION AND JURISDICTION

SEC. 4. (1) The standard to be applied in the administration of the provi. sions of this Act, except in any case where a different standard is expressly provided for, shall be the public interest, convenience, and necessity.

(2) The provisions of this Act shall apply to the procurement of natural gas for the purpose of its transmission through pipe lines and its sale, exchange, transmission, or distribution in interstate commerce; also to all instrumentalities, including contracts and agreements which substantially affect such interstate transportation and sale or exchange of natural gas. This Act shall not apply to the procurement for, or the sale of, natural gas exclusively in intrastate commerce, nor to the procurement, transportation, and distribution of natural gas solely for the use and consumption of the procurer or transmitter of the natural gas, or for use and consumption of his tenant on property owned or controlled by him, and not for resale.

(3) The Commission shall have jurisdiction over all facilities for the procurement of natural gas for its transmission through pipe lines and its sale, or for exchange, or distribution in interstate commerce, and over the transmission of natural gas in pipe lines in interstate commerce and over the sale, or exchange, of natural gas in interstate commerce, and over all facilities connected therewith as parts of a system of natural-gas transmission operated in more than one State.

(4) Every natural-gas pipe line which is a part of a system for transporting in interstate commerce natural gas destined, in whole or in part, for ultimate distribution to and consumption by the general public is hereby declared to be a public utility, and every person engaged in the business of producing, transmitting, distributing, selling, or exchanging natural gas, in whole or in part, for public use is declared to be engaged in the business of conducting a public utility.

(5) Every person who owns, controls, or operates the facilities subject to the jurisdiction of the Commission under this Act, or who makes contracts involving the use of such facilities, shall be subject to the provisions of this Act.

CONSERVATION BY COMPACT AMONG STATES

SEC. 5. (a) It is hereby declared to be the policy of the Congress to ens courage agreements or compacts among the several States, made with the consent of Congress, in the interest of the conservation of the natural-gas resources within the United States and for the orderly, equitable, and economical production and handling of natural gas.

(b) It shall be unlawful for any person to engage in commerce among the several States in natural gas produced, bought, sold, exchanged, or transported in violation of any agreement or compact (including any law or lawful regulation contained in or enacted to effectuate such agreement or compact) among any natural-gas-producing States made with the consent of Congress for the conservation of natural gas and its orderly, equitable, and economical production and handling, contrary to the policy, purpose, and provision of this Act.

SEC. 6. In order to inform the Congress as to the advisability of consenting to any such agreement or compact, as provided for in section 5 hereof, it shall be the duty of the Commission to assemble pertinent information touching various matters covered in any proposed agreement or compact and report to the Congress the facts found, together with its conclusions and recommendations as to the legal and economic advisability of granting consent to any such agreement or compact.

Sec. 7. Upon the approval by Congress of any agreement or compact, as provided for in section 5 hereof, the Commission shall assemble and keep current information necessary and advisable for the continuance of the orderly and successful administration of every such agreement or compact; shall supply copies of so much of said information to the several States, parties to such compacts, as may be requested; and shall report and recommend to the several States within each such agreement or compact on all matters of quantity, quotas, rates, and all other matters required in order effectively to carry out the provisions of every such compact. The Commission shall report annually to the Congress the work done in this respect, and its findings and conclusions as to the advisability of the continuance of any existing agreement or compact, and shall present to Congress from time to time its recommendations.

SEC. 8. To enable the Commission to carry out its duties under section 6 and section 7 hereof, the Commission is hereby authorized and empowered to invoke all of the powers granted under its organic Act and all amendments thereto.

REGULATION OF INTERSTATE NATURAL-GAS PIPE LINES

SEC. 9. It shall be the duty of each natural-gas pipe-line company which purchases any natural gas

(a) If it elects to act as a common carrier, to accept for transportation at a fair and reasonable rate without undue preference or unjust discrimination between shippers or between localities and, as far as its capacity permits, all natural gas tendered in any area or field which it has undertaken to serve: Provided, That natural gas under contracts made in good faith prior to the enactment of this Act shall have priority in transportation; or

(b) If it elects to purchase natural gas in any gas field, to buy tenders thereof without undue preference or unjust discrimination and on an equitable basis: Provided, That (1) the price at which tendered is not greater than the going field price, after making due allowance for differences in cost of gathering, and (2) the quality is substantially of standard grade in that field: And provided further, That contracts made in good faith prior to the enactment of this Act shall have priority, and that reasonable and equitable consideration shall be given in this respect to any gas production by the naturalgas pipe-line company or of any wholly owned affiliate in said field.

Purchase of gas hereunder may include payment on an equitable basis for gas in place which is subject to drainage through any well from which gas is taken up by any pipe-line company or any vendors to it, provided that it is consistent with the State law regarding title to such gas.

Sec. 10. (a) Up to the capacity of its pipe lines and its ability to procure sufficient natural gas, it shall be the duty of every natural-gas pipe-line company which is engaged in interstate transportation of natural gas, unless reasonable cause to the contrary is established in public hearings before the Commission, to furnish natural gas to any city or town applying therefor which is able and willing to make arrangements to extend a service line to any main of any such pipe-line company, and said gas shall be furnished at fair and reasonable rates without unjust discrimination. Applications by such cities and towns for natural gas shall have priority for consideration in order of the dates of the filing of such applications, but the Commission, if it finds a duty to service, shall decide, after public hearings, held after due notice, the order in which applicants shall be served, priority being given to those cities and towns which, by reason of all pertinent considerations, including cost of the service, number of inhabitants, and need of industry served, indicate the maximum public benefit from such service

(b) Any natural-gas pipe-line company engaged in interstate commerce which, without just cause, is delinquent for more than ninety days in complying with a duty found under the determination and order of the Commission as provided in '(a) hereof shall be guilty of a separate misdemeanor for each day of such delinquency.

SEC. 11. (a) The Commission shall have power to order such reasonable extensions of service from the transmission lines of any natural-gas pipe-line company, and/or the establishment of physical connection with any connecting service line arranged for by municipal or private distributors for resale or to ultimate consumers as after investigations and hearings it finds are within the ability of such pipe-line company to serve, after giving due weight to existing obligations in good faith entered into, for service by the pipe-line company and upon evidence that such service extensions, if and when made, will be fairly remunerative at such reasonable and fair rates as the Commission shall authorize or determine.

(b) The Commission shall establish regulations providing for the maintenance of accuracy and serviceability of all meters used in the control of operations of, and in the sale of natural gas by, natural-gas pipe-line companies under the jurisdiction of the Commission and shall provide tests for the determination of accuracy of such meters upon complaint or upon its own motion.

(c). The Commission, upon complaint or upon its own motion, shall, from time to time, order such changes and improvements in equipment and operating procedure of natural-gas pipe-line companies under its jurisdiction, as it may determine, after investigation and hearing, are necessary to enhance safety in operation and maintain a proper quality of service within the limits of the capacity of the main pipe line and other major facilities installed by the

owners.

The Commission, however, may not order changes, additions, and improvements which tend unduly to increase either the total investment or the capacity of the line in order to take on additional service obligations. The Commission in ordering any improvements, additions, and extensions shall take into consideration the effect thereof upon the operations of the entire line, to the end that a reasonable return upon the total investment and ability to meet all immediate and prospective obligations of service contemplated by the original investment may not be unfairly jeopardized.

RATES

AND CHARGES; SCHEDULES; SUSPENSION

OF

NEW RATES

SEC. 12. (a) All rates and charges made, demanded, or received by any natural-gas pipe-line company for or in connection with the transmission or sale of natural gas subject to the jurisdiction of the Commission, and all rules and regulations affecting or pertaining to such rates or charges, shall be just and reasonable, and any such rate or charge that is not just and reasonable is hereby declared to be unlawful.

(b) No natural-gas pipe-line company shall, with respect to any service rendered, or to be rendered, in the transmission of natural gas in interstate commerce in natural-gas pipe lines subject to the jurisdiction of the Com

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mission, (1) make or grant any undue preference or advantage to any person or subject any person to any undue prejudice or disadvantage, or (2) maintain any unreasonable difference in rates, charges, service, facilities, or in any other respect, either as between localities or as between classes of service.

(c) Within six months from the date of the approval of this Act each natural-gas pipe-line company which transports natural gas in interstate commerce shall file with the Commission true copies of all of its contracts

(1) for lease and royalty agreements of gas lands (unless excused by Commission for cause) ;

(2) for the purchase of natural gas;
(3) for the transportation of natural gas; and
(4) for the sale or delivery of natural gas.

Thereafter each such natural-gas pipe-line company shall file promptly with the Commission true copies of any and all amendments, renewals, or new contracts on the matters heretofore enumerated.

(d) Under such rules and regulations as the Commission may prescribe, every natural-gas pipe-line company shall file with the Commission, within such time and in such form as the Commission may designate, and shall post and keep open in convenient form and place for public inspection, schedules showing all rates and charges for any transmission or sale of natural gas subject to the jurisdiction of the Commission, and the classifications, practices, and regulations affecting such rates and charges, together with all contracts which in any manner affect or relate to such rates, charges, classifications, and services.

(e) Unless the Commission otherwise orders, no change shall be made by any natural-gas pipe-line company in any such rate, charge, classification, or service, or in any rule, regulation, or contract relating thereto, except after thirty days' notice to the Commission and to the public. Such notice shall be given by filing with the Commission and posting and keeping open for public inspection new schedules stating plainly the change or changes to be made in the schedule or schedules then in force and the time when the change or changes will go into effect. The Commission, for cause shown, may allow changes to take

ffect without requiring the thirty days' notice herein provided for by an order specifying the changes so to be made and the time when they shall take effect and the manner in which they shall be filed and published.

FIXING RATES AND CHARGES ; DETERMINATION OF COST OF PRODUCTION OR

TRANSMISSION

SEC. 13. (a) Whenever the Commission, after a hearing had upon its own motion or upon complaint, shall find that any rate, charge, or classification, demanded, observed, charged, or collected by any natural-gas pipe-line company in connection with any service rendered or to be rendered in the transmission or sale of natural gas in mains in interstate commerce, subject to the jurisdiction of the Commission, or that any rule, regulation, practice, or contract affecting such rate, charge, or classification is unreasonable or unjustly discriminatory or preferential, the Commission shall determine the just and reasonable rate, charge, classification, rule, regulation, practice, or contract to be thereafter observed and in force, and shall prescribe the same by order.

(b) The Commission upon its own motion, or upon the request of any State commission, whenever it can do so without prejudice to the efficient and proper conduct of its affairs, may investigate and determine the cost of the production or transmission of natural gas, either independently or in cooperation with the State authorities severally concerned.

ASCERTAINMENT OF COST OF PROPERTY

SEC. 14. The Commission may investigate and ascertain the actual legitimate cost of the property and assets of every natural-gas pipe-line company, the fair depreciation thereof, and, when found necessary for rate-making purposes, other facts which bear on the fair value of such property.

ACCOUNTS, RECORDS, AND MEMORANDA

SEC. 15. (a) Every natural-gas pipe-line company shall make, keep, and preserve such accounts, records of cost-accounting procedures, correspondence, memoranda, papers, books, and other records for such periods as the Commission may by rules and regulations prescribe as necessary or appropriate for the effective administration of this Act, including accounts, records, and memoranda, regarding the production, purchase, transmission, delivery, or sale of natural gas, the furnishing of service or facilities in connection therewith, and receipts and expenditures with respect to any of the foregoing: Provided, however, That nothing in this Act shall relieve any such natural-gas pipe-line company from keeping any accounts, memoranda, or records which such uatural-gas pipe-line company may be required to keep by or under authority of the laws of any State. The Commission may prescribe a system of accounts to be kept by such natural-gas pipe-line companies so engaged. The Commission, after notice and opportunity for hearing, may determine by order the accounts in which particular outlays or receipts shall be entered, charged, or credited. The burden of proof to justify every accounting entry questioned by the Commission shall be on the person making, authorizing, or requiring such entry, and the Commission may suspend any entry, charge, or credit pending submission of satisfactory proof in support thereof.

(b) The Commission shall at all times have access to and the right to inspect and examine all accounts, records, and memoranda of natural-gas pipeline companies; and it shall be the duty of such natural-gas pipe-line companies to furnish to the Commission, within such reasonable time as the Commission may order, any information with respect thereto which the Commission may by order require, including copies of maps, contracts, reports of engineers, and other data, records, and papers, and to grant to all agents of the Commission free access to its property and its accounts, records, and memoranda when requested so to do. No member, officer, or employee of the Commission shall divulge any fact or information which may come to his knowledge during the course of examination of books or other accounts, as hereinbefore provided, except insofar as he may be directed by the Commission or by a court of competent jurisdiction.

(c) The books, accounts, correspondence, memoranda, and other records of any person who controls directly or indirectly a natural-gas pipe-line company subject to the jurisdiction of the Commission and of any other company controlled by such person, insofar as they relate to transactions with or the business of such natural-gas pipe-line company, shall be subject to examination on the order of the Commission.

RATES OF DEPRECIATION

SEC. 16. (a) The Commission may, after hearing, require natural-gas pipeline companies to carry a proper and adequate depreciation account in accordance with such rules, regulations, and forms of account as the Commission may prescribe. The Commission may from time to time ascertain and determine, and by order fix, the proper and adequate rates of depreciation of the several classes of property used or useful in the production or transmission of natural gas of each natural-gas pipe-line company. Each natural-gas pipe-line company shall conform its depreciation accounts to the rates so ascertained, determined, and fixed. The natural-gas pipe-line companies subject to the jurisdiction of the Commission under this Act shall not charge to operating expenses any depreciation charge on classes of property other than those prescribed by the Commission, nor shall they charge with respect to any classes of property a percentage of depreciation or other charge or expenditure that is included elsewhere, whether as a depreciation charge or otherwise under its operating or other expenses. Nothing in this section shall limit the power of a State commission to determine in the exercise of its jurisdiction, with respect to any natural-gas pipe-line company, the percentage rate of depreciation to be allowed, as to any class of property of such natural-gas pipe-line company, or the composite depreciation rate, for the purpose of determining rates or charges, with respect to matters within the jurisdiction of said State commission.

(b) The Commission may, after hearing, determine the adequacy or inadequacy of the gas reserves held by any pipe-line company, or by anyone for it, including its owned or leased properties and royalty contracts, and the Commission may, after hearing, determine the reasonableness or propriety of the inclusion of all delay rentals or other forms of rental or compensation for unoperated lands and leases, in operating expenses, capital, or surplus.

(c) The Commission, before prescribing any rules or requirements as to accounts, records, correspondence, or memoranda, or as to depreciation rates, shall notify each State commission having jurisdiction with respect to any naturalgas pipe-line company involved and shall give reasonable opportunity to each such commission to present its views and shall receive and consider such views and recommendations.

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