18 Cfr 284.262

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ELECTRONIC CODE OF FEDERAL REGULATIONS
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Title 18 → Chapter I → Subchapter I → Part 284 → Subpart I
Title 18: Conservation of Power and Water Resources
PART 284—CERTAIN SALES AND TRANSPORTATION OF NATURAL GAS
UNDER THE NATURAL GAS POLICY ACT OF 1978 AND RELATED
AUTHORITIES

Subpart I—Emergency Natural Gas Sale, Transportation, and
Exchange Transactions
Contents
§284.261 Purpose.
§284.262 Definitions.
§284.263 Exemption from section 7 of Natural Gas Act and certain regulatory
conditions.
§284.264 Terms and conditions.
§284.265 Cost recovery by interstate pipeline.
§284.266 Rates and charges for interstate pipelines.
§284.267 Intrastate pipeline emergency transportation rates.
§284.268 Local distribution company emergency transportation rates.
§284.269 Intrastate pipeline and local distribution company emergency sales rates.
§284.270 Reporting requirements.
§284.271 Waiver.
SOURCE: Order 449, 51 FR 9187, Mar. 18, 1986, unless otherwise noted.

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§284.261 Purpose.
This subpart exempts a person who engages in an emergency natural gas
transaction, as defined for purposes of this subpart, in interstate commerce from the
certificate requirements of section 7 of the Natural Gas Act and from the conditions
of §284.10, except as provided in §284.266, and §§284.7-284.9 and §§284.11284.13 of subpart A of this chapter.
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§284.262 Definitions.
For purposes of this subpart:
Emergency means:
(1) Any situation in which an actual or expected shortage of gas supply or
capacity would require an interstate pipeline company, intrastate pipeline, local
distribution company, or Hinshaw pipeline to curtail deliveries of gas or provide less
than the projected level of service to any pipeline customer, including any situation
in which additional supplies or capacity are necessary to ensure a pipeline's
contracted level of service to any customer, but not including any situation in which
additional supplies or capacity are needed to increase the contracted level of service
to an existing customer or to provide service to a new customer; or
(2) A sudden unanticipated loss of natural gas supply or capacity; or
(3) An anticipated loss of natural gas supply or capacity due to a foreseeable
facility outage resulting from a landslide or riverbed erosion or other natural forces
beyond the participant's control. Participants may seek a temporary certificate under
§§157.17 of this chapter if the facilities to remedy the emergency cannot be
constructed automatically under §2.55(b) or §157.208(a) of this chapter.
(4) A situation in which the participant, in good faith, determines that immediate
action is required or is reasonably anticipated to be required for protection of life or
health or for maintenance of physical property.
Emergency does not mean any situation resulting from a failure by any person
to transport natural gas under subpart B, C, or G of this part.
Projected level of service means the level of gas volumes to be delivered by the
company for each customer and additional gas volumes needed by a customer due
solely to a weather-induced increase in requirements.
Emergency natural gas means natural gas sold, transported, or exchanged in
an emergency natural gas transaction.
Emergency natural gas transaction means the sale, transportation, or exchange
of natural gas (including the construction and operation of necessary facilities)
conducted pursuant to this subpart, that is:
(1) Necessary to alleviate an emergency; and
(2) Not anticipated to extend for more than 60 days in duration.
Emergency facilities means any facilities necessary to alleviate the emergency
within the time frame established in §284.264(b). Participants can seek permanent

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authority to operate the emergency facilities either under the temporary certificate
provisions of §157.17 of this chapter or the prior notice provisions of §157.208(b) of
this chapter.
Participant means any first seller, interstate pipeline, intrastate pipeline, local
distribution company or Hinshaw pipeline that participates in an emergency natural
gas transaction under this subpart.
Recipient means:
(1) In the case of a sale of emergency natural gas, the purchaser of such gas;
or
(2) In the case of a transportation or exchange of natural gas when there is no
sale of emergency natural gas under this subpart, the participant who receives the
gas.
Hinshaw pipeline means a pipeline that is exempt from the Natural Gas Act
jurisdiction of the Commission by reason of section 1(c) of the Natural Gas Act.
[Order 603, 64 FR 26610, May 14, 1999]

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§284.263 Exemption from section 7 of Natural Gas Act and certain regulatory
conditions.
Any participant that engages in an emergency natural gas transaction
conducted in accordance with this subpart is exempt from the requirements of
section 7 of the Natural Gas Act and the conditions of §284.10, except as provided
in §284.266, and from the requirements of §§284.7-284.9 and §§284.11-284.13 of
subpart A of this part. Participation in any emergency natural gas transaction will not
subject any participant to the jurisdiction of the Commission under section 7 of the
Natural Gas Act except to the extent such transaction is provided for in this subpart.
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§284.264 Terms and conditions.
(a) General conditions. (1) A participant must make every reasonable attempt to
minimize use of emergency natural gas transactions.
(2) Before deliveries of emergency natural gas commence, a responsible official
of the recipient must provide any participants in the emergency natural gas
transaction sufficient information to enable the participants to form a good faith belief
that an emergency exists or is imminent.

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(3) No participant may engage in an emergency natural gas transaction if its
participation will adversely affect service to its existing customers.
(4) A participant may not sell emergency natural gas if, during the term of the
sale, it is also purchasing emergency natural gas under this subpart, except when
natural gas is being sold to relieve an emergency on another, separate segment of
the participant's system.
(5) An interstate pipeline, acting in an emergency gas transaction as a broker or
agent on behalf of another participant or any other person, may not receive
compensation for such brokerage or agency service.
(6) A recipient of emergency natural gas that directly benefits from the service
must:
(i) Provide line loss and the fuel volumes required to transport the emergency
natural gas; and
(ii) Pay for the facilities required to be constructed to conduct the emergency
natural gas transaction.
(b) Duration—1) Emergency sale or transportation. An emergency natural gas
transaction is limited to 60 consecutive calendar days, except that such transaction
may be continued for an additional 60 consecutive days if:
(i) Fifteen days prior to the end of the initial 60-day period, the recipient of
emergency natural gas files a petition that:
(A) Describes fully the continued emergency,
(B) Requests a waiver of the initial 60-day limitation and permission for an
extension of the transaction for an additional 60 days; and
(ii) Within the 15-day period, the Commission does not, by order, prohibit
continuation of the emergency natural gas transaction for the additional 60-day
period.
(2) Redelivery in emergency exchange. The redelivery of emergency natural
gas received under an exchange arrangement must occur within 180 consecutive
days following the termination of deliveries of the emergency natural gas.
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§284.265 Cost recovery by interstate pipeline.

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(a) Except as provided in paragraph (b), an interstate pipeine that provides
emergency natural gas, whether from its system supply or by special purchase,
must directly assign the emergency gas costs to the recipient.
(b) If an interstate pipeline cannot identify individual recipients, the interstate
pipeline must roll the emergency gas costs into its general system supply costs.
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§284.266 Rates and charges for interstate pipelines.
(a) Transportation rates—1) Rate on file. If an interstate pipeline has on file with
the Commission an effective transportation rate schedule that conforms to §284.10,
it must use volumetric rates based upon fully-allocated costs and adjusted only for
time and distance.
(2) Rate not on file. If an interstate pipeline does not have on file with the
Commission a transportation rate schedule that conforms to §284.10, it may:
(i) Base its rates upon the methodology used in designing rates to recover the
transmission and related storage costs included in one of its then-effective sales
rates schedules; or
(ii) Use the rates contained in one of its transportation rate schedules on file
with the Commission which the interstate pipeline determines covers service
comparable to transportation service authorized under this subpart.
(b) Interstate pipeline costs excluded from rate base. An interstate pipeline may
not include in its jurisdictional rate base any cost associated with facilities installed
and operated in connection with an emergency natural gas transaction unless a
certificate of public convenience and necessity has been issued authorizing the
costs. Absent a certificate, such facilities may only be used to conduct emergency
natural gas transactions or transactions authorized under section 311 of the NGPA.
[Order 449, 51 FR 9187, Mar. 18, 1986, as amended by Order 581, 60 FR 53074, Oct. 11,
1995]

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§284.267 Intrastate pipeline emergency transportation rates.
General rule. Rates and charges for transportation of emergency gas by
intrastate pipelines authorized under this subpart must be determined in accordance
with §284.123 of this chapter.
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§284.268 Local distribution company emergency transportation rates.
(a) Rate on file. A local distribution company that has a rate on file with an
appropriate state regulatory agency for city-gate transportation services must
determine its rates and charges for transportation of emergency natural gas in
accordance with §284.123 of this chapter.
(b) Rate not on file. A local distribution company that does not have a rate on
file with an appropriate state regulatory agency for city-gate transportation services
must determine its rates and charges for transportation of emergency natural gas
(per unit volume of emergency natural gas transported) in accordance with
§284.224(e)(2)(ii) of this chapter.
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§284.269 Intrastate pipeline and local distribution company emergency sales
rates.
An intrastate pipeline or local distribution company must determine its rates for
sales of emergency natural gas under this subpart in accordance with §284.142.
[Order 449, 51 FR 9187, Mar. 18, 1986, as amended by Order 581, 60 FR 53074, Oct. 11,
1995]

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§284.270 Reporting requirements.
(a) Forty-eight hour report for sales transactions. Within 48 hours after
deliveries of emergency natural gas commence, the purchasing participant must
notify the Commission by email, facsimile or other written report of the sale, stating,
in the following sequences:
(1) That the report is submitted pursuant to §284.270 for an emergency natural
gas transaction;
(2) The date deliveries commenced;
(3) The specific nature of the situation, explained in sufficient detail to
demonstrate how the situation qualifies as an emergency under §284.262 and under
the conditions of §284.264, and anticipated duration of the emergency;
(4) The estimated total amount and average daily amount of emergency natural
gas to be purchased during the term of the transaction;
(5) The purchase price of the emergency natural gas;

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(6) The transportation rate; and
(7) The identity of all participants involved in the transaction, including any
customers to whom the emergency natural gas is to be assigned.
(b) Forty-eight hour report for transportation (excluding exchanges). Within 48
hours after deliveries commence in an emergency natural gas transaction which
does not involve the sale of emergency natural gas, the recipient of emergency
natural gas shall notify the Commission by email, facsimile or other written report of
the transportation, stating, in the following sequence:
(1) That the report is submitted pursuant to §284.270 for an emergency
transaction;
(2) The date deliveries commenced;
(3) The specific nature of the situation, explained in sufficient detail to
demonstrate how the situation qualifies as an emergency under §284.262 and under
the conditions of §284.264, and anticipated duration of the emergency;
(4) The estimated total amount and average daily amount of emergency natural
gas to be transported during the term of the transaction;
(5) The transportation rate; and
(6) The identity of all the participants involved in the transaction.
(c) Forty-eight hour report for exchanges. Within 48 hours after an exchange
transaction for emergency natural gas commences, the initial recipient of the
exchange volumes must notify the Commission by email, facsimile or other written
report of the exchange, stating, in the following sequence:
(1) That the report is for and submitted pursuant to §284.270 for an emergency
transaction;
(2) The date the exchange commenced;
(3) The specific nature of the situation, explained in sufficient detail to clearly
demonstrate how the situation qualifies as an emergency under §284.262 and under
the conditions of §284.264, and anticipated duration of the emergency;
(4) The estimated total amount and average daily amount of emergency natural
gas to be exchanged during the term of the transaction;
(5) The identity of all participants involved in the transaction;

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(6) Whether the exchange is simultaneous or deferred, or any imbalances in the
volumes;
(7) Whether the exchange is on a thermal or volumetric basis; and
(8) The rates or charges, if any, for the exchange service.
(d) Termination report. Within thirty days after the emergency natural gas
transaction ends, the participant that received the emergency natural gas shall file
with the Commission a sworn statement and two conformed copies thereof, which
must include the following information in the following sequence:
(1) A description of the emergency natural gas transaction, including sufficient
information to clearly demonstrate how the situation qualifies as an emergency
under §284.262 and under the conditions of §284.264; the commencement and
termination dates; the date of the 48-hour report, and the method of resolving the
emergency;
(2) Any corrections to the 48-hour report information supplied to the
Commission under paragraphs (a) through (c) of this section or a statement that the
information was correct;
(3) The volumes of the emergency natural gas delivered during the transaction;
(4) The total compensation received by the seller for the emergency sale;
(5) The total compensation paid for the emergency natural gas transportation or
exchange service, if any;
(6) The methods by which such compensation was derived;
(7) The total volumes of natural gas whose cost was assigned to specific
customers, and the total volumes whose cost was included in system supply;
(8) The information supplied to any other participant pursuant to §284.264(a)(2);
and
(9) A statement that the emergency natural gas transaction was carried out in
accordance with this subpart, and that identifies the circumstances demonstrating
an emergency existed or was imminent so as to require an emergency natural gas
transaction.
[Order 46, 44 FR 52184, Sept. 7, 1979, as amended by Order 756, 77 FR 4894, Feb. 1,
2012]

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§284.271 Waiver.
The Commission may, by order, waive the requirements of this subpart in
connection with any emergency natural gas transaction to the extent required by the
public interest.
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