PART 281—NATURAL GAS CURTAILMENT UNDER THE NATURAL GAS POLICY ACT OF 1978 Authority: 15 U.S.C. 717-717w, 3301-3432; 16 U.S.C. 2601-2645; 42 U.S.C. 7101-7352. Source: Order 10-B, 44 FR 13470, Mar. 12, 1979, unless otherwise noted. Subpart A [Reserved] Subpart B—Permanent Curtailment Rule § 281.201 Purpose. The purpose of this subpart is to implement section 401 of the NGPA in order to provide that effective November 1, 1979, the curtailment plans of interstate pipelines protect, to the maximum extent practicable, deliveries of natural gas for essential agricultural uses and for high-priority uses in accordance with the provisions of this subpart. [44 FR 26862, May 8, 1979] § 281.202 Applicability. This subpart applies to the following interstate pipe lines: Alabama-Tennessee Pipeline Company. Algonquin Gas Transmission Company. Arkansas Louisiana Natural Gas Company. Cities Service Gas Company. Colorado Interstate Gas Company. Columbia Gas Transmission Corporation. Consolidated Gas Supply Corporation. East Tennessee Natural Gas Company. Eastern Shore Natural Gas Company. El Paso Natural Gas Company. Florida Gas Transmission Company. Great Lakes Gas Transmission Company. Inter-City Minnesota Pipelines, Ltd., Inc. Kansas-Nebraska Natural Gas Company, Inc. Lawrenceburg Gas Transmission Company. Michigan-Wisconsin Pipeline Company. Mid-Louisiana Gas Company. Midwestern Gas Transmission Company. Mississippi River Transmission Company. Montana Dakota Utilities Company. National Fuel Gas Supply Company. North Penn Gas Company. Northern Natural Gas Company. Northwest Pipeline Corporation. Panhandle Eastern Pipeline Company. South Georgia Natural Gas Company. Southern Natural Gas Company. Southwest Gas Corporation. Tennessee Gas Pipeline Company, a Division of Tenneco, Inc. Tennessee Natural Gas Lines. Texas Eastern Transmission Corporation. Texas Gas Transmission Corporation. The Inland Gas Company. Transwestern Pipeline Company. Trunkline Gas Company. United Gas Pipe Line Company. Western Gas Interstate Company. [44 FR 26862, May 8, 1979, as amended at 44 FR 48184, Aug. 17, 1979] § 281.203 Definitions and cross references. (a) Definitions. (1) Direct sale customer (2) Essential agricultural use et seq. (3) Essential agricultural user (4) High-priority use (5) High-priority user (i) In a residence; (ii) In a small commercial establishment; (iii) In a school or a hospital; or (iv) For police protection, for fire protection, in a sanitation facility or a correctional facility. (6) End-use curtailment plan (7) Indirect sale customer (8) Residence (9) Small commercial establishment (i) In amounts of less than 50 Mcf on a peak day; and (ii) For purposes other than those involving manufacturing or electric power generation. (10) Hospital (11) School (12) Local distribution company (13) Rolling base period (14) Entitlements (15) Interstate pipeline purchaser (16) Alternative fuel (b) Cross references. (2) Index of entitlements [44 FR 26862, May 8, 1979, as amended by Order 29-C, 44 FR 61344, Oct. 25, 1979; Order 55-B, 45 FR 54739, July 18, 1980] § 281.204 Tariff filing requirements. (a) General rule. (b) Index of entitlements. (2) Periodic update. (3) Alternative fuel determination. (c) Other tariff provisions. (i) To provide for deliveries of sufficient volumes of natural gas to respond to emergency situations (including environmental emergencies) during periods of curtailment where additional supplies are required to forestall irreparable injury to life or to property; and (ii) To provide for deliveries of sufficient volumes of natural gas to provide for minimum plant protection when the plant is shut down. (2) Volumetric delivery requirements. (Natural Gas Policy Act of 1978, 15 U.S.C. 3301-3432; Department of Energy Organization Act, 42 U.S.C. 7101-7352; E.O. 12009, 42 FR 46267; Administrative Procedure Act, 5 U.S.C. 551 et seq.) [44 FR 26862, May 8, 1979, as amended at 44 FR 45923, Aug. 6, 1979; 44 FR 62490, Oct. 31, 1979; Order 55-B, 45 FR 54739, July 18, 1980; Order 145, 46 FR 27913, May 22, 1981; Order 714, 73 FR 57535, Oct. 3, 2008] § 281.205 General rules. (a) Priority of service categories Priority 1. (2) Priority 2. (3) Other priority of service categories. (b) Method of curtailment. (c) Storage General rule. (2) Storage sprinkling. (3) Other treatment of storage. [44 FR 26862, May 8, 1979, as amended by Order 29-C, 44 FR 61344, Oct. 25, 1979; Order 145, 46 FR 27913, May 22, 1981] § 281.206 Priority 1 reclassification. (a) Definitions. (1) In the case of a direct sale customer, the volume of natural gas such direct sale customer is entitled to receive for high-priority uses (as defined in § 281.203) under the currently effective curtailment plan of the interstate pipeline; (2) In the case of a local distribution company, the volume of natural gas which such local distribution company is entitled to receive on account of the high-priority uses (as defined in § 281.203) of its high-priority user customers under the currently effective curtailment plan of the interstate pipeline; (3) In the case of an interstate pipeline purchaser the volume of natural gas such interstate pipeline purchaser is entitled to receive from an interstate pipeline supplier for the high-priority entitlements of its direct sale customers, local distribution company customers and interstate pipeline customers. (b) Direct sale customer and local distribution company customers. (ii) Subject to paragraph (b)(2) of this section, and § 281.211 each local distribution company must request each of its direct interstate pipeline suppliers to reclassify its high priority entitlements in its currently effective curtailment plan as priority 1 entitlements. (2) The direct sale customer or local distribution company customer shall designate the entitlements in each priority of service category in the currently effective curtailment plan for which priority 1 reclassification is requested. It shall request that those entitlements for which priority 1 reclassification is requested be excluded from the category of service in which they are included in the currently effective plan. (3) Subject to § 281.210, the interstate pipeline shall reclassify all such high-priority entitlements as priority 1 entitlements and shall reduce by an equal amount the entitlements in such other priority of service categories as designated by the direct sale customer or local distribution company customer, (in accordance with paragraph (b)(2) of this section). (c) Interstate pipeline. (2) The interstate pipeline purchaser shall designate the entitlements in each priority of service category in the currently effective curtailment plan for which priority 1 reclassification is requested. It shall request that those entitlements for which priority 1 classification is requested be excluded from the category of service in which they are included in the currently effective plan. (3) Subject to § 281.210, the interstate pipeline supplier shall reclassify all such high-priority entitlements as priority 1 entitlements and shall reduce the high-priority entitlements in other priority of service categories as designated by the interstate pipeline customer, (in accordance with paragraph (c)(2) of this section). [44 FR 26862, May 8, 1979] § 281.207 Priority 2 classification. (a) Direct sale customer. (2) The essential agricultural user shall designate the entitlements in each priority of service category in the currently effective curtailment plan which reflect the essential agricultural requirements. It shall request that entitlements which are reflected in priority of service categories in the currently effective curtailment plan are removed from such priority of service categories. (3) Subject to § 281.210, the interstate pipeline shall classify all such essential agricultural requirements as priority 2 entitlements and reduce the entitlements in such other priority of service categories as designated by the direct sale customer, (in accordance with paragraph (b)(2) of this section). (b) Indirect sale customer. (c) Local distribution companies. (2) The local distribution company shall designate the entitlements in each priority of service in the currently effective curtailment plan which reflect the attributed indirect essential agricultural requirements. It shall request that those entitlements which are reflected in each category in the currently effective curtailment plan are removed from such priority of service category. (3) Subject to § 281.210, the interstate pipeline shall classify all such attributed indirect essential agricultural requirements as priority 2 entitlements and shall reduce the entitlements of the local distribution company in such other priority of service categories as designated by the local distribution company, (in accordance with paragraph (b)(2) of this section). (d) Interstate pipeline. (2) The interstate pipeline purchaser shall designate the entitlements in each priority of service category in the currently effective curtailment plan of the interstate pipeline supplier which reflects the attributed priority 2 entitlements and request that those entitlements which are reflected in such priority of service categories in the currently effective curtailment plan are removed from such priority of service category. (3) Subject to § 281.210, the interstate pipeline supplier shall classify the attributed priority 2 entitlements as priority 2 entitlements and shall reduce the entitlements of the interstate pipeline purchaser in such other priority of service categories as designated by the interstate pipeline purchaser, (in accordance with paragraph (d)(2) of this section). [44 FR 26862, May 8, 1979] § 281.208 Calculation of essential agricultural requirements and attributable priority 2 entitlements. (a) Scope. (1) An essential agricultural user calculates total essential agricultural requirements, direct essential agricultural requirements, and indirect essential agricultural requirements; (2) A local distribution company calculates attributable indirect essential agricultural requirements for its essential agricultural user customers; and (3) An interstate pipeline purchaser calculates it attributable priority 2 entitlements. (b) Calculation by an essential agricultural user Total essential agricultural requirements General Rule. (B) Alternative fuel volumes (determined under § 281.304). (ii) Definitions. (A) The energy consumption from the most recent 12 month period for which actual data is available, with necessary adjustments; or (B) The maximum volume of natural gas for which the essential agricultural user has installed capability to use for essential agricultural uses. (2) Attribution of total essential agricultural requirement and indirect essential agricultural requirements. (ii) The direct essential agricultural requirement with respect to a particular interstate pipeline supplier is that part of the total essential agricultural requirements attributed under § 281.209 to the direct interstate pipeline supplier. The indirect essential agricultural requirement with respect to a particular local distribution company supplier is that part of the total essential agricultural requirements attributed under § 281.209 to a direct local distribution company supplier. (c) Calculation by local distribution companies. (2) That part of the indirect essential agricultural requirements which the local distribution company attributes to a particular interstate pipeline supplier is the attributed indirect essential agricultural requirements attributed to that interstate pipeline. (d) Interstate pipelines. (2) The attributable priority 2 entitlements attributed to a particular interstate pipeline supplier is that part of the priority 2 entitlements of the interstate pipeline purchaser which it attributes to a particular interstate pipeline supplier. [44 FR 26862, May 8, 1979, as amended at 44 FR 62490, Oct. 31, 1979] § 281.209 Attribution. (a) Applicability. (2) This section does not apply to an essential agricultural user or local distribution company which receives all its natural gas supplies from a single source, or an interstate pipeline purchaser which does not receive natural gas from any other interstate pipeline. (b) Natural gas supplies included for purposes of attribution. (2)(i) An essential agricultural user, which attributes under paragraph (d) a portion of the volumes which are its total essential agricultural requirements to a direct source of natural gas other than a direct supplier may not seek classification to priority 2 under § 281.207 for such portion of its total essential agricultural requirements. (ii) A local distribution company which attributes under paragraph (e) a portion of the volumes which are its indirect essential agricultural requirements to a direct source of natural gas other than a direct supplier may not seek classification to priority 2 under § 281.207 for such portion of its indirect essential agricultural requirements. (iii) An interstate pipeline purchaser which attributes under paragraph (f) a portion of the volumes of its priority 1 or 2 entitlements to a direct source of natural gas other than a direct supplier may not seek reclassification to priority 1 or classification to priority 2, respectively, for such portion of its priority 1 and 2 entitlements. (c) Definitions. (1) Direct supplier (2) Base period (3) Annual quantity entitlements (d) Essential agricultural user. (2) If an essential agricultural user does not have annual quantity entitlements only with respect to one of its direct suppliers, the attributable essential agricultural requirements attributable to such direct supplier shall be that part of the total essential agricultural requirements not attributed under paragraph (d)(1) of this section. (3) If an essential agricultural user does not have Annual Quantity Entitlements with respect to more than one of its direct suppliers, the attributable essential agricultural requirements attributable to a particular direct supplier shall be calculated by multiplying its total essential agricultural requirements by the total volume of natural gas received from such supplier in 1972 and dividing the product (numerator) by the total supplies of natural gas received from all sources in 1972 (denominator). (e) Local distribution company. (f) Interstate pipelines. [44 FR 26862, May 8, 1979, as amended by Order 29-C, 44 FR 61344, Oct. 25, 1979] § 281.210 Conflicting data. (a) Interstate pipelines. (b) Local distribution companies. [44 FR 26862, May 8, 1979] § 281.211 Filing and documentation. (a) Priority 1 Direct sales customers and local distribution companies. (ii)(A) A table indicating high-priority entitlements (as defined in § 281.206) and the end-use of the natural gas in each priority of service category in the currently effective curtailment plan for which priority 1 reclassification is requested. (B) A copy of the end-use data used to establish the high-priority requirements and designated end-use of the natural gas. (2) Interstate pipelines. (ii)(A) A table indicating high-priority entitlements (as defined in § 281.206) and end-use of the natural gas in each priority of service category in the currently effective curtailment plan of the interstate pipeline supplier for which priority 1 reclassification is requested. (B) A copy of the end-use data used to establish the high-priority requirements and designated end-use of the natural gas. (C) A table indicating the volumes and priority of service categories for which each of direct sale customers and local distribution company customers sought reclassification to priority 1. (b) Priority 2 Essential agricultural users. (ii) The request shall be accompanied by a statement that; (A) Indicates the intended end-use(s) and volume(s) of the natural gas for which priority 2 entitlements are requested. (B) Indicates the SIC Code activities of the essential agricultural user which qualifies it as an essential agricultural user in accordance with 7 CFR 2900.3. (C) Includes the data and calculations used to determine essential agricultural requirements under 7 CFR 2900.4. (D) Includes with respect to any essential agricultural user to which Subpart C applies the data and calculations necessary to determine alternative fuel volumes under § 281.304. (iii) The statement under paragraph (b)(1)(ii) shall be signed by a responsible official of the essential agricultural user. Such official shall swear or affirm that the statements are true to the best of his information, knowledge and belief. (2) Local distribution companies. (3) Interstate pipelines. (4) Subsequent request. (ii) For years subsequent to 1979, the data required by this paragraph must be filed only to the extent that there has been a change in essential agricultural requirements. (Natural Gas Policy Act of 1978, 15 U.S.C. 3301-3432; Department of Energy Organization Act, 42 U.S.C. 7101-7352; E.O. 12009, 42 FR 46267; Administrative Procedure Act, 5 U.S.C. 551 et seq. [44 FR 26862, May 8, 1979, as amended at 44 FR 45923, Aug. 6, 1979; 44 FR 62490, Oct. 31, 1979; Order 55-B, 45 FR 54740, July 18, 1980; Order 145, 46 FR 27913, May 22, 1981] § 281.212 Draft tariff and index of entitlements. (a) Each interstate pipeline shall prepare draft tariff sheets or sections and a draft index of entitlements in accordance with this subpart. (b) The draft tariff sheets or sections and index of entitlements shall be served on all customers of the interstate pipeline no later than August 1 of each year. (c) Copies of all documents received by the interstate pipeline under § 281.210, the draft tariff sheets or sections and the draft index of entitlements shall be served on the Data Verification Committee no later than August 1 of each year. (Natural Gas Policy Act of 1978, Pub. L. 95-621. Department of Energy Organization Act, 42 U.S.C. 7107 et seq.: et seq.) [44 FR 26862, May 8, 1979, as amended at 44 FR 45923, Aug. 6, 1979; Order 145, 46 FR 27913, May 22, 1981; Order 714, 73 FR 57535, Oct. 3, 2008] § 281.213 Data Verification Committee. (a) Each interstate pipeline shall establish a Data Verification Committee no later than August 1, 1979. It shall include, at a minimum, a representative of the interstate pipeline, Commission staff, a large and small local distribution company, and an essential agricultural user. The appropriate state and local regulatory bodies, and a representative of the United States Department of Agriculture may, at their option, be members. (b) The Data Verification Committee shall review all calculations behind the draft tariff sheets or sections and the proposed index of entitlements. The Data Verification Committee may request, and the interstate pipeline shall immediately supply, any information requested by the Data Verification Committee. (c) Any interested person may file a written protest concerning the index of entitlements. Such protests shall be filed with the Data Verification Committee no later than August 15 of each year. (d) The Data Verification Committee shall review the draft tariff sheets or sections and index of entitlements and shall review the underlying data for uniformity in preparation. (e) The Data Verification Committee shall prepare a report concerning the proposed index of requirements and the draft tariff sheets or sections for the interstate pipeline. It shall, at a minimum, specify all arithmetic errors and contain an evaluation of all protests. It may contain a proposed settlement of contested draft tariff sheets or sections. The report shall be submitted to the interstate pipeline no later than September 1 of each year. (Natural Gas Act. 15 U.S.C. 717-717w; Natural Gas Policy Act of 1978, 15 U.S.C. 3301-3432; Department of Energy Organization Act, 42 U.S.C. 7101-7352; E.O. 12009, 42 FR 46267; Administrative Procedure Act, 5 U.S.C. 551 et seq. [44 FR 26862, May 8, 1979, as amended at 44 FR 45923, Aug. 6, 1979; Order 29-C, 44 FR 61345, Oct. 25, 1979; Order 145, 46 FR 27913, May 22, 1981; Order 714, 73 FR 57535, Oct. 3, 2008] § 281.214 Notice, complaint and remedy. (a) Complaint. (b) Remedy. [44 FR 26862, May 8, 1979, as amended at 44 FR 61345, Oct. 25, 1979; Order 225, 47 FR 19058, May 3, 1982] § 281.215 Additional relief. If an interstate pipeline rejects (under § 281.210 or otherwise) a request for reclassification under § 281.206 or classification under § 281.207 or if a local distribution company does not request (for any reason including the provisions of § 281.210) classification under § 281.206 on behalf of its high priority uses or reclassification on behalf of its essential agricultural users, the person aggrieved by such action may file a request for relief from curtailment under § 385.206 of this chapter. The request shall contain the information required in § 2.78(b) of the Commission Regulations. [44 FR 26862, May 8, 1979, as amended by Order 225, 47 FR 19058, May 3, 1982] Subpart C—Alternative Fuel Determination Authority: Natural Gas Policy Act of 1978, 15 U.S.C. 3301-3432; Department of Energy Organization Act, 42 U.S.C. 7101-7352; E.O. 12009, 42 FR 46267. Source: Order 55, 44 FR 62490, Oct. 31, 1979, unless otherwise noted. § 281.301 Purpose. The purpose of this subpart is to determine the economic practicability and reasonable availability of alternative fuels, as prescribed in section 401(b) of the Natural Gas Policy Act of 1978 for use by essential agricultural use establishments that seek priority 2 entitlements for natural gas. § 281.302 Applicability. This subpart applies to— (a) Any essential agricultural use establishment for which an essential agricultural user: (1) Has requested that natural gas be classified as priority 2 entitlements by an interstate pipeline under § 281.207; and (2) Which has requested from any direct supplier priority 2 entitlements in excess of 300 Mcf per day; and (b) Any essential agricultural use establishment with a new boiler, other than a diesel engine or turbine designed to use distillate fuels as the only alternative to natural gas, that: (1) Has a capacity in excess of 300 Mcf of natural gas per day; and (2) Is put into service for the first time after August 29, 1979. § 281.303 Definitions. For purposes of this subpart— (a) Ability to use (b) Alternative fuel (c) Boiler (d) Capacity (e) Coal (f) Direct supplier (g) Distillate fuel (h) Essential agricultural requirements (i) Essential agricultural use (j) Essential agricultural user (k) Essential agricultural use establishment (l) Local distribution company (m) Priority 2 entitlements (n) Residual fuel oil [44 FR 62490, Oct. 31, 1979, as amended by Order 55-B, 45 FR 54740, July 18, 1980] § 281.304 Computation of alternative fuel volume. (a) General rule. (1) Alternative fuel volume of an essential agricultural user is equal to the sum of the alternative fuel volumes for each agricultural use establishment for which such user has requested from any direct supplier priority 2 entitlements in excess of 300 Mcf. (2) Alternative fuel volume for an agricultural use establishment is that portion of such establishment's natural gas requirements for which such establishment has requested priority 2 curtailment and for which the establishment had on August 29, 1979, or thereafter, the ability to use alternative fuel. (b) New boilers. (1) Has a capacity in excess of 300 Mcf of natural gas per day; (2) Is put into service for the first time after August 29, 1979; and (3) Is not a diesel engine or turbine designed to use distillate fuels as the only substitute for natural gas. [44 FR 62490, Oct. 31, 1979, as amended by Order 55-B, 45 FR 54740, July 18, 1980] § 281.305 General rule. Any essential agricultural user subject to this subpart that has requested from any direct supplier priority 2 classification for volumes for any essential agricultural use establishment shall reduce its essential agricultural requirements calculated under § 281.208 to reflect the exclusion of volumes of natural gas for which its essential agricultural establishment has alternative fuel volumes under § 281.304. Appendix A 1 Type of fuel FPC form No. 423 price data 1 Monthly energy review price data 2 1976 1977 1978 1979 January 1980 1976 1977 1978 1979 January 1980 Cents per MMBtu Fuel Oil: No. 2 235.1 264.3 271.9 402.1 564.4 226.4 257.3 268.2 403.1 537.2 Low Sulfur No. 6 207.1 229.1 225.1 320.2 453.3 193.6 221.3 216.8 322.4 466.5 High Sulfur No. 6 168.7 199.9 186.7 264.7 361.4 165.9 195.2 186.1 261.5 349.6 All No. 6 195.9 220.4 212.3 299.7 423.5 182.8 210.4 202.7 297.0 417.7 Coal: All Grades 84.8 94.7 111.6 122.4 128.7 ( 3 ( 3 ( 3 ( 3 ( 3 Natural Gas 103.4 130.0 143.8 175.4 194.8 97.2 131.9 154.1 201.8 237.3 Actual price difference (fuel oil and coal versus natural gas) Fuel Oil: No. 2 131.7 134.3 128.1 226.7 369.6 129.2 125.4 114.1 201.3 299.9 Low Sulfur No. 6 103.7 99.1 81.3 144.8 258.5 96.4 89.4 62.7 120.6 229.2 High Sulfur No. 6 65.3 69.1 42.9 89.3 166.6 68.7 66.3 32.0 59.7 112.3 All No. 6 92.5 90.4 68.5 124.3 228.7 85.6 78.5 48.6 95.2 180.4 Coal: All Grades (18.6) (35.3) (32.2) (53.0) (66.1) ( 3 ( 3 ( 3 ( 3 ( 3 Price difference ratio 4 Fuel Oil: No. 2 1.274 1.033 .891 1.292 1.897 1.329 .951 .740 .998 1.264 Low Sulfur No. 6 1.003 .762 .565 .826 1.327 .992 .678 .407 .598 .966 High Sulfur No. 6 .632 .538 .298 .509 .855 .707 .480 .208 .296 .473 All No. 6 .895 .695 .476 .709 1.174 .881 .595 .315 .472 .760 Coal: All Grades (.180) (.272) (.224) (.302) (.339) ( 3 ( 3 ( 3 ( 3 ( 3 1 Cost and Quality of Fuels for Electric Utility Plants 2 3 4 2 1 1 2 1 As determined in Docket No. RM79-40 NOPR issued June 3, 1980, corrected for clerical/typographical error. [Order 55-B, 45 FR 54740, Aug. 18, 1980]