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THURSDAY, APRIL 2, 1936
HOUSE OF REPRESENTATIVES,
Washington, D. C. The subcommittee met, pursuant to call, in the committee rooms at 10 a. m., Hon. Clarence F. Lea presiding.
Mr. LEA. The committee will be in order.
We have met this morning for hearings on H. R. 11662, a bill to regulate the transportation and sale of natural gas in interstate commerce, and for other purposes.
(The bill is as follows:)
[H. R. 11662, 74th Cong., 2d sess.) A BILL To regulate the transportation and sale of natural gas in interstate commerce,
and for other purposes
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
NECESSITY FOR REGULATION OF NATURAL GAS COMPANIES
SECTION 1. (a) As disclosed in reports of the Federal Trade Commission made pursuant to S. Res. 83 (Seventieth Congress, first session) and other reforts made pursuant to the authority of Congress, it is hereby declared that the business of transporting and selling natural gas for ultimate distribution to the public is affected with a public interest and that Federal regulation in matters relating to the transportation of natural gas and the sale thereof in interstate and foreign commerce is necessary in the public interest.
(b) The provisions of this Act shall apply to the transportation of natural gas in high-pressure mains in interstate commerce and to natural-gas companies engaged in such transportation, but shall not apply to the distribution of natural gas moving locally in low-pressure mains or to the facilities used for such distribution or to the production of natural gas: Provided, That nothing in this Act shall be construed to authorize the Commission to fix rates or charges for the sale of natural gas distributed locally in low-pressure mains or for the sale of natural gas for industrial use only.
Sec. 2. When used in this Act, unless the context otherwise requires(1) "Person" includes an individual or a corporation.
(2) "Corporation" includes any corporation, joint-stock company, partnership, association, business trust, organized 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 city, county, or other political subdivision or agency 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 company" means a person engaged in the transportation of natural gas in high-pressure mains in interstate commerce.
(6) "Interstate commerce" means commerce between any point in a State and any point outside thereof, or between points within the same State but through
any place outside thereof, but only insofar as such commerce takes place within the United States.
(7) "State commission” means the regulatory body of the State or municipality having jurisdiction to regulate rates and charges for the sale of natural gas to consumers within the State or municipality.
(8) "Commission" and "Commissioner" means the Federal Power Commission, and a member thereof, respectively.
TRANSPORTATION TO A FOREIGN COUNTRY
Sec. 3. After six months from the date on which this Act takes effect no person shall transport any natural gas from the United States to a foreign country without first having secured an order of the Commission authorizing it to do so. "The Commission shall issue such order upon application, unless, after opportunity for hearing the facts, it finds that tủe proposed transportation would impair the sufficiency of the supply of natural gas within the United States. The Commission may by its order grant such application, in whole or in part, with such modification and upon such terms and conditions as the Commission may find necessary or appropriate, and may from time to time, after opportunity for hearing, and for good cause shown, make such supplemental order in the premises as it may find necessary or appropriate.
RATES AND CHARGES ; SCHEDULES; SUSPENSION OF NEW RATES SEC. 4. (a) All rates and charges made, demanded, or received by any naturalgas company for or in connection with the transportation 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 company shall, with respect to any service rendered or to be rendered in the transportation of natural gas in high-pressure mains in interstate commerce subject to the jurisdiction of the Commission, (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) Under such rules and regulations as the Commission may prescribe, every natural-gas company shall file with the Commission, within such time and in such form as the Commission may designate, and shall keep open in convenient form and place for public inspection schedules showing all rates and charges for any transportation or sale 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.
(d) Unless the Commission otherwise orders, no change shall be made by any natural-gas 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 keeping open for public inspection new schedules stating plainly the change or changes to be made in the schedule or schedules tlien in force and the time when the change or changes will go into effect. The Commission, for good cause shown, may allow changes to take effect 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.
(e) Whenever any such new, schedule is filed the Commission shall have authority, either upon complaint or upon its own initiative without complaint, at once, and if it so orders, without answer or formal pleading by the natural-gas company, but upon reasonable notice, to enter upon a hearing concerning the lawfulness of such rate, charge, classification, or service; and, pending such hearing and the decision thereon, the Commission, upon filing with such schedules and delivering to the natural-gas company affected thereby a statement in writing of its reasons for such suspension, may suspend the operation of such schedule and defer the use of such rate, charge, classification, or service, but not for a longer period than five months beyond the time when it would otherwise go into
effect; and after full hearings, either completed before or after the rate, charge, classification, or service goes into effect, the Commission may make such orders with reference thereto as would be proper in a proceeding initiated after it had become effective. If the proceeding has not been concluded and an order made at the expiration of such five months, the proposed change of rate, charge, classification, or service shall go into effect at the end of such period, but in case of a proposed increased rate or charge the Commission may by order require the interested natural-gas company or natural-gas companies to keep accurate account in detail of all amounts received by reason of such increase, specifying by whom and in whose behalf such amounts are paid, and upon completion of the hearing and decision may by further orders require such natural-gas company or natural-gas companies to refund, with interest, to the persons in whose behalf such amounts were paid, such portion of such increased rates or charges as by its decision shall be found not justified. At any hearing involving a rate or charge sought to be increased, the burden of proof to show that the increased rate or charge is just and reasonable shall be upon the natural-gas company, and the Commission shall give to the hearing and decision of such question preference over other questions pending before it and decide the same as speedily as possible.
FIXING RATES AND CHARGES ; DETERMINATION OF COST OF PRODUCTION OR TRANS
SEC. 5. (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 company in connection with any service rendered or to be rendered in the transportation of natural gas in high-pressure 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 unjust, unreasonable, unduly 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 fix 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 transportation of natural gas by means of facilities under the jurisdiction of the Commission in cases where the Commission has no authority to establish a rate governing the sale of such natural gas.
ASCERTAINMENT OF COST OF PROPERTY
SEC. 6. (a) The Commission may investigate and ascertain the actual legitimate cost of the property of every natural-gas company, the depreciation therein, and, when found necessary for rate-making purposes, other facts which bear on the determination of such cost or depreciation and the fair value of such property.
(b) Every natural-gas company upon request shall file with the Commission an inventory of all or any part of its property and a statement of the original cost thereof, and shall keep the Commission informed regarding the cost of all additions, betterments, extensions, and new construction.
EXTENSION OF FACILITIES
Sec. 7. (a) Whenever the Commission, after notice and opportunity for hearing, finds such action necessary or desirable in the public interest, it may by order direct a natural-gas company transporting gas for ultimate distribution to the public to extend or improve its facilities, for the purpose of serving communities within or immediately adjacent to the territory occupied or served by such natural-gas company, which can be suppled adequately without undue disturbance of existing service requirements, or those reasonably to be anticipated : Provided, That the Commission shall have no authority to compel the enlargement of transportation facilities for such purposes or to compel such natural-gas company to establish physical connection or to sell natural gas when to do so would impair its ability to render adequate service to its customers.