area price level for increased rates for natural gas sales by independent producers in Texas District Nos. 2, 3, 4, and 6 is 15.08 cents per Mcf at 14.73 p.s.i.a. (15 cents per Mcf at 14.65 p.s.i.a.), including tax reimbursement.

(2) For rate schedules from which all price escalation clauses are being eliminated except for periodic escalation provisions as specified below and provisions for future changes in tax reimbursement, the area price level for increased rates for natural gas sales by independent producers in Texas District Nos. 2, 3, 4, and 6 is 14.68 cents per Mcf at 14.73 p.s.i.a. (14.6 cents per Mcf 14.65 p.s.i.a.), including tax reimbursement: Provided, however, That such revised rate schedules may contain escalation clauses providing future separate increases in rate not in excess of 1.01 cents per Mcf at 14.73 p.s.i.a. (1 cent per Mcf at 14.65 p.s.i.a.), the first such escalation not to be tendered for filing prior to the effective date of the 14.68 cents rate and subsequent escalations to be effective under the contract at not less than 5-year intervals thereafter.

(3) Subparagraphs (1) and (2) of this paragraph shall not be applicable to a settlement offer unless at least five years remain of the term of the contract comprising the rate schedule sought to be brought within the provisions thereof.

(4) Subparagraphs (1) and (2) of this paragraph shall not be applicable to a settlement offer which proposes to eliminate from a rate schedule (contract or agreement) only the right to present tax reimbursement.

(c) As a result of our continuing experience with the effects of favored-nation and price redetermination provisions upon independent producer prices, we conclude that extension of the applicable provisions of the Second Amendment to this Statement, set out in paragraph (b) in this section, to the areas set out below and to the extent there provided is desirable in the public interest, appropriate to carry out the provi

sions of the Natural Gas Act, and beneficial to ultimate consumers, pipeline purchasers and independent producers. To that end

(1) For rate schedules from which all price escalations clauses are being eliminated except for provisions for future changes in tax reimbursement, the area price level for increased rates for natural gas sales by independent producers from the various areas covered herein is set forth in column B of Table No. 2.

(2) For rate schedules from which all price escalations are being eliminated except for periodic escalation provisions as hereinafter specified and provisions for future changes in tax reimbursement, the area price level for increased rates for natural gas sales by independent producers from the various areas covered herein is set forth in Column A of Table No. 2: Provided, however, That such revised rate schedules may contain escalation clauses providing future separate increases in rate not in excess of 1.01 cents per Mcf at 14.73 p.s.i.a. (1 cent per Mcf at 14.65 p.s.i.a.), the first such escalation not to be effective under the contract prior to November 1, 1968, and subsequent escalations to be effective under the contract at not less than 5-year intervals thereafter.

(3) Subparagraphs (1) and (2) of this paragraph shall not be applicable to a settlement offer unless at least five years remain of the term of the contract comprising the rate schedule sought to be brought within the provisions thereof.

(4) Subparagraphs (1) and (2) of this paragraph shall not be applicable to a settlement offer which proposes to eliminate from a rate schedule (contract or agreement) only the right to present tax reimbursement.

(d) (1) All permanent certificates of public convenience and necessity granting applications filed after April 15, 1965, will contain a condition, substantially in the language set out in subparagraph (2) of this paragraph, precluding any filing of an increased rate at a price in excess

1 Rate includes present tax reimbursement.

of those designated in Table No. 3 for the period prescribed therein, unless at the time of filing such certificate application, or within the time fixed in the notice of application for filing protests or petitions to intervene, the applicant indicates in writing that it is unwilling to accept such a condition in which event the application will be set for formal hearing to determine, inter alia, whether any grant of certificate shall be so conditioned.

(2) Standard anti-triggering condition:

No increase in rate shall be filled prior to at any price which would exceed the ceiling prescribed for the given area by paragraph (d) of the Commission's Statement of General Policy 61-1, as amended.

(3) All permanent certificates of public convenience and necessity granting applications filed on or after July 1, 1967, will contain a condition, substantially in the language set out in subparagraph (4) of this paragraph, precluding any filing of an increased rate at a price in excess of those designated in the table referred to in subparagraph (1) of this

paragraph, prior to January 1, 1970, unless at the time of filing such certificate application, or within the time fixed in the notice of application for filing protests or petitions to intervene, the applicant indicates in writing that it is unwilling to accept such a condition in which event the application will be set for formal hearing to determine, inter alia, whether any grant of certificate shall be so conditioned.

(4) Standard anti-triggering condition: "No increase in rate shall be filed prior to January 1, 1970, at any price which would exceed the ceiling prescribed for the given area by paragraph (d) (3) of the Commission's statement of general policy No. 61-1, as amended."

(e) For purposes of computing any area rate adjustments effectuated pursuant to this section, the following conversion factors with the results rounded to the nearest one-hundredth of a cent, shall be used in converting to the 14.73 p.s.i.a pressure base prescribed herein: From 14.65 p.s.i.a. to 14.73 p.s.i.a____ 1.00546 From 15.025 p.s.i.a. to 14.73 p.s.i.a.--- 0.98037 From 15.325 p.s.i.a. to 14.73 p.s.i.a_-- 0.96117

1 Effective duration of antitriggering conditions is Jan. 1, 1970, as provided for in Order No. 352, § 2.56(d) ·(3) and (4) of the Commission's general policy and interpretations, rules of practice, and procedure.

2 For conversion factors see: 33 F.R. 14373, 4; 18 CFR 2.56(e).

(f) Special policy for newly-discovered reservoirs on previously committed acreage. (1) In the Permian Basin and Southern Louisiana areas, the rate ceilings set forth in Table 1 of this section applicable to gas-well gas (or residue gas derived therefrom) shall be determined by the date of discovery of such reservoir, in lieu of the contract date, in the case of production on or after November 1, 1969, from a new reservoir on previously committed acreage. In all other areas, the initial rate ceilings set forth in Table 1 of this section shall determine the increased rate ceilings in the case of gas-well gas (or residue gas derived therefrom) produced on or after November 1, 1969, from a reservoir discovered on or after September 28, 1960, on previously committed acreage.

(2) Where a producer is entitled to an increase in the price of its gas based on the date of discovery of the reservoir from which gas-well gas sales (or residue gas derived therefrom) are being made,

it may file a proposed price increase pursuant to section 4 of the Natural Gas Act, indicating to what gas the higher price will be applicable. With each filing the producer will include (1) copies of all documents filed with or issued by local or State regulatory agencies relating to the discovery of the reservoir from which the gas is produced, and (ii) a statement by the buyer of the gas that the gas qualifies for the price sought, or why the buyer believes it does not. The producer shall also furnish any additional material in its possession or available to it which the Commission may request in writing. Documents or other data previously filed with this Commission, whether by the producer or another, may be incorporated by reference in any filing hereunder. Similar information shall be filed in any pending section 4 proceeding to which it is relevant. The Commission will follow the determination made by the appropriate State agency in determining the date of discovery of a reservoir. In the event the State agency changes its classification of a reservoir, the Commission shall follow such change as of the date of the new classification. Whenever the reclassification of a reservoir affects the applicable ceiling rate the producer and the buyer shall notify the Commission.

(Secs. 4, 5, 7, 52 Stat. 822, 823, 824; 15 U.S.C. 717c, 717d, 717f) [Statement of General Policy 61-1, 25 F.R. 13969, Dec. 30, 1960, as amended by Order 273, Amdt. 7, 28 F.R. 12865, Dec. 4, 1963; Order 284, 29 F.R. 11154, Aug. 1, 1964; Order 296, 30 F.R. 4671, Apr. 10, 1965; Order 352, Amdt. 11, 32 F.R. 9955, July 7, 1967; Order 367, 33 F.R. 14373, Sept. 24, 1968; Order 374, 33 F.R. 17349, Nov. 23, 1968; Order 381, 34 F.R. 7904, May 20, 1969; 34 F.R. 9157, June 11, 1969; 34 F.R. 12177, July 23, 1969; 34 F.R. 15645, Oct. 9, 1969]

§ 2.57 Temporary certificates—pipeline companies.

The Federal Power Commission will exercise the emergency powers set forth in the second proviso of section 7(c) of the Natural Gas Act to authorize in appropriate cases, by issuance of temporary certificates, comparatively minor enlargements or extensions of an existing pipeline system. It will not be the policy of the Commission, however, to proceed summarily, 1.e., without notice

or hearing, in cases where the proposed construction is of major proportions. Pipeline companies are accordingly urged to conduct their planning and to submit their applications for authority sufficiently early so that compliance with the requirements relating to issuance of permanent certificates of public convenience and necessity (when those requirements are deemed applicable by the Commission) will not cause undue delay in the commencement of necessary construction.

(52 Stat. 824; 56 Stat. 83; 15 U.S.C. 717f) [Gen. Policy No. 62-1, 26 F.R. 10098, Oct. 27, 1961]

§ 2.58 Budget-type certificate applications-gas purchase facilities.

In accordance with the Commission's advice set forth in paragraph (e) of this section and unless prevented by other factors, such as interventions in opposition, we will issue budget-type authorizations to natural gas pipeline companies covering the construction and operation of gas purchase facilities, after hearing under the abridged procedure, upon applications for certificates of public convenience and necessity, filed under § 157.6 of this chapter, provided that:

(a) (1) The total estimated cost of the facilities to be installed in a given twelvemonth period does not exceed 11⁄2 percent of the applicant company's plant account or $5,000,000 whichever is the lesser.

(2) The total cost of any single project facilities to be installed during the authorization period does not exceed 25 percent of the total budget amount or $500,000, whichever is the lesser.

(b) Any application proposing the construction of facilities having an estimated total cost in excess of the amounts specified in paragraph (a) of this section shall be accompanied by a request for waiver of the provisions of such paragraph and will be granted only for good cause shown.

(c) The applicant agrees to file with the Commission, within sixty days after expiration of the authorization, a statement showing for each individual project:

(1) Description of facilities installed, i.e., miles and size of pipelines, compressor horsepower, metering facilities.

(6) The names of the independent producers from whom the gas is being purchased together with the respective dates of the gas sales contracts and the docket number of the related seller.

(d) "Gas purchase facilities" means those facilities necessary to connect the applicant's system with the facilities of a seller authorized by this Commission to make a sale for resale in interstate commerce to the applicant.

(e) In its Order No. 185, issued February 8, 1956, 15 FPC 793, 794; 21 F.R. 1485, the Commission advised any interested natural-gas company subject to the Natural Gas Act that it may file under 157.6 of this chapter a single certificate application covering in general outline along the lines of a budget estimate the proposed routine construction intended to be undertaken by it during the current or ensuing fiscal year. A hearing could then be held on such a proposal and a certificate issued in accordance with the general application. At the end of the period, a statement shall be filed showing the actions taken under the certificate and any authority thereunder which was not exercised.

(Sec. 7, 56 Stat. 83; 15 U.S.C. 717f) [Order 247, 27 F.R. 5606, June 13, 1962, as amended by Order 281, 29 F.R. 5544, Apr. 25, 1964; Order 316, 31 F.R. 215, Jan. 7, 1966]

§ 2.59 Pipeline rate proceedings-procedure.

In order to more fully implement and utilize the procedures contemplated by Order No. 217 (22 FPC 872, 24 F.R. 946), designed to expedite hearings and shorten the records thereof, the procedure hereafter in pipeline rate proceedings which the Commission regards as suited to such techniques will be as follows:

(a) The Commission will give prompt public notice of the rate filing and fix therein a date for the filing of any peti