Natural Gas Act Questions With Complete Solutions
Associated Gas/Casinghead Gas Correct Answers Gas that is
produced along with oil from oil wells, separated from the oil,
and then sent into gas pipelines.
Bundled Transportation Service Correct Answers Local utility
buys and resells to retail customers both the gas commodity and
interstate transportation.
California v. Lo-Vaca Gathering, 379 U.S. 366, 366-371 (1965)
Correct Answers The sale of gas that crosses a state line at any
stage of its movement from wellhead to ultimate consumption is
in interstate commerce within the meaning of NGA.
The line between jurisdictional and non-jurisdictional sales
could be drawn by the FPC on a case-by-case basis through the
use of its adjudicatory power without the exercise of its rule-
making power.
Can a natural-gas company abandon all or any portion of its
facilities subject to FERC's jurisdiction, or any service rendered
by means of such facilities, without the permission and approval
of FERC first had and obtained, after due hearing, and a finding
by FERC that the available supply of natural gas is depleted to
the extent that the continuance of service is unwarranted, or that
the present or future public convenience or necessity permit
such abandonment? Correct Answers No. (17 U.S.C. §
717f(b))
,Capacity Release Market Correct Answers Holders of firm
pipeline capacity can resell their unused capacity to other
parties. Holders post the available capacity, in most instances,
on an EBB operated by interstate pipelines. Order No. 636
requires pipelines to implement a capacity release program.
Capacity releases enable shippers who have paid for reserved
firm transportation capacity in the pipeline to release unneeded
capacity to others, who can then use it to ship their own gas.
Capacity releases by shippers are the fundamental building
blocks of the secondary capacity market. By virtue of capacity
releases, sellers of natural gas can purchase pipeline
transportation capacity either directly from the pipeline or from
releasing shippers. A firm shipper (releasing shipper) releases its
capacity to another shipper by returning it to the pipeline.
If the releasing shipper has identified a replacement shipper, (A)
the original contract between the releasing shipping and the
pipeline remains in full force and effect, (B) the pipeline
contracts with and receives payment from the replacement
shipper and then issues a credit to the releasing shipper equal to
the proceeds, and (C) the replacement shipper may pay less than
the pipeline's maximum tariff rate, but not more.
If a replacing shipper isn't identified, the pipeline puts the
released capacity up for bid. (A) and (B) apply to the successful
bidder.
FERC Order No. 636, by instituting a firm capacity release
market, effectively organized the U.S. market for natural gas
transportation into two distinct tiers: the primary and secondary
, markets. In the primary market, the pipeline sells firm capacity
contracts to various shippers, including power plants, industrial
end-users, and LDCs. In the secondary market, owners of
pipeline capacity rights release unused firm capacity in the
secondary market to other ga
City Gate Correct Answers The point of interconnection
between the interstate pipeline system and the local distribution
system.
Corporation Correct Answers 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. (15
U.S.C. § 717a(2))
Distributors or Local Distribution Companies (LDCs) Correct
Answers In urban areas, there is usually a "gas company" that
purchases gas delivered to the "city gate" by a transmission
company and then distributes the gas using gas mains under the
streets to serve homes for heating and cooking and commercial
and industrial businesses. They are usually investor-owned
utilities regulated by the state public utility commission, but, in
some cases, municipalities own and operate the gas distribution
business.
If the weather becomes so extreme that even a cutoff of the
industrial customers is inadequate to free up enough gas to serve
the firm customers, LDCs typically establish priority lists to
allocate gas among the firm customers.
Associated Gas/Casinghead Gas Correct Answers Gas that is
produced along with oil from oil wells, separated from the oil,
and then sent into gas pipelines.
Bundled Transportation Service Correct Answers Local utility
buys and resells to retail customers both the gas commodity and
interstate transportation.
California v. Lo-Vaca Gathering, 379 U.S. 366, 366-371 (1965)
Correct Answers The sale of gas that crosses a state line at any
stage of its movement from wellhead to ultimate consumption is
in interstate commerce within the meaning of NGA.
The line between jurisdictional and non-jurisdictional sales
could be drawn by the FPC on a case-by-case basis through the
use of its adjudicatory power without the exercise of its rule-
making power.
Can a natural-gas company abandon all or any portion of its
facilities subject to FERC's jurisdiction, or any service rendered
by means of such facilities, without the permission and approval
of FERC first had and obtained, after due hearing, and a finding
by FERC that the available supply of natural gas is depleted to
the extent that the continuance of service is unwarranted, or that
the present or future public convenience or necessity permit
such abandonment? Correct Answers No. (17 U.S.C. §
717f(b))
,Capacity Release Market Correct Answers Holders of firm
pipeline capacity can resell their unused capacity to other
parties. Holders post the available capacity, in most instances,
on an EBB operated by interstate pipelines. Order No. 636
requires pipelines to implement a capacity release program.
Capacity releases enable shippers who have paid for reserved
firm transportation capacity in the pipeline to release unneeded
capacity to others, who can then use it to ship their own gas.
Capacity releases by shippers are the fundamental building
blocks of the secondary capacity market. By virtue of capacity
releases, sellers of natural gas can purchase pipeline
transportation capacity either directly from the pipeline or from
releasing shippers. A firm shipper (releasing shipper) releases its
capacity to another shipper by returning it to the pipeline.
If the releasing shipper has identified a replacement shipper, (A)
the original contract between the releasing shipping and the
pipeline remains in full force and effect, (B) the pipeline
contracts with and receives payment from the replacement
shipper and then issues a credit to the releasing shipper equal to
the proceeds, and (C) the replacement shipper may pay less than
the pipeline's maximum tariff rate, but not more.
If a replacing shipper isn't identified, the pipeline puts the
released capacity up for bid. (A) and (B) apply to the successful
bidder.
FERC Order No. 636, by instituting a firm capacity release
market, effectively organized the U.S. market for natural gas
transportation into two distinct tiers: the primary and secondary
, markets. In the primary market, the pipeline sells firm capacity
contracts to various shippers, including power plants, industrial
end-users, and LDCs. In the secondary market, owners of
pipeline capacity rights release unused firm capacity in the
secondary market to other ga
City Gate Correct Answers The point of interconnection
between the interstate pipeline system and the local distribution
system.
Corporation Correct Answers 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. (15
U.S.C. § 717a(2))
Distributors or Local Distribution Companies (LDCs) Correct
Answers In urban areas, there is usually a "gas company" that
purchases gas delivered to the "city gate" by a transmission
company and then distributes the gas using gas mains under the
streets to serve homes for heating and cooking and commercial
and industrial businesses. They are usually investor-owned
utilities regulated by the state public utility commission, but, in
some cases, municipalities own and operate the gas distribution
business.
If the weather becomes so extreme that even a cutoff of the
industrial customers is inadequate to free up enough gas to serve
the firm customers, LDCs typically establish priority lists to
allocate gas among the firm customers.
