15 U.S.C. § 3203 — Adoption of certain standards

Page 1994 TITLE 15—COMMERCE AND TRADE § 3201 1 So in original. The comma probably should not appear. 2 So in original. A comma probably should appear. § 3201. Purposes; coverage (a) Purposes The purposes of this chapter are to encour- age— (1) conservation of energy supplied by gas utilities; (2) the optimization of the efficiency of use of facilities and resources by gas utility sys- tems; and (3) equitable rates to gas consumers of nat- ural gas. (b) Volume of total retail sales This chapter applies to each gas utility in any calendar year, and to each proceeding relating to each gas utility in such year, if the total sales of natural gas by such utility for purposes other than resale exceeded 10 billion cubic feet during any calendar year beginning after De- cember 31, 1975, and before the immediately pre- ceding calendar year. (c) Exclusion of wholesale sales The requirements of this chapter do not apply to the operations of a gas utility, or to pro- ceedings respecting such operations, to the ex- tent that such operations or proceedings relate to sales of natural gas for purposes of resale. (d) List of covered utilities Before the beginning of each calendar year, the Secretary shall publish a list identifying each gas utility to which this chapter applies during such calendar year. Promptly after publi- cation of such list, each State regulatory au- thority shall notify the Secretary of each gas utility on the list for which such State regu- latory authority has ratemaking authority. (Pub. L. 95–617, title III, § 301, Nov. 9, 1978, 92 Stat. 3149.) Statutory Notes and Related Subsidiaries DEFINITIONS The definition of Secretary in section 2602 of Title 16, Conservation, applies to this section. § 3202. Definitions For purposes of this chapter— (1) The term ‘‘gas consumer’’ means any per- son, State agency, or Federal agency, to which natural gas is sold other than for purposes of resale. (2) The term ‘‘gas utility’’ means any person, State agency, or Federal agency, engaged in the local distribution of natural gas, and the sale of natural gas to any ultimate consumer of natural gas. (3) The term ‘‘State regulated gas utility’’ means any gas utility with respect to which a State regulatory authority has ratemaking authority. (4) The term ‘‘nonregulated gas utility’’ means any gas utility other than a State regu- lated gas utility. (5) The term ‘‘rate’’ means any (A) price, rate, charge, or classification made, de- manded, observed, or received with respect to sale of natural gas to a gas consumer, (B) any rule, regulation, or practice respecting any such rate, charge, or classification, and (C) any contract pertaining to the sale of natural gas to a gas consumer. (6) The term ‘‘ratemaking authority’’ means authority to fix, modify, approve, or dis- approve rates. (7) The term ‘‘sale’’ when used with respect to natural gas, includes an exchange of nat- ural gas. (8) The term ‘‘State regulatory authority’’ means any State agency which has rate- making authority with respect to the sale of natural gas by any gas utility (other than by such State agency). (9) The term ‘‘integrated resource planning’’ means, in the case of a gas utility, planning by the use of any standard, regulation, practice, or policy to undertake a systematic compari- son between demand-side management meas- ures and the supply of gas by a gas utility to minimize life-cycle costs of adequate and reli- able utility services to gas consumers. Inte- grated resource planning shall take into ac- count necessary features for system operation such as diversity, reliability, dispatchability, and other factors of risk and shall treat de- mand and supply to gas consumers on a con- sistent and integrated basis. (10) The term ‘‘demand-side management’’ includes energy conservation, energy effi- ciency, and load management techniques. (Pub. L. 95–617, title III, § 302, Nov. 9, 1978, 92 Stat. 3150; Pub. L. 102–486, title I, § 115(a), Oct. 24, 1992, 106 Stat. 2803.) Editorial Notes AMENDMENTS 1992—Pars. (9), (10). Pub. L. 102–486 added pars. (9) and (10). Statutory Notes and Related Subsidiaries ADDITIONAL DEFINITIONS Except as otherwise specifically provided, the defini- tions in section 2602 of Title 16, Conservation, apply to this chapter. § 3203. Adoption of certain standards (a) Adoption of standards Not later than 2 years after November 9, 1978 (or after October 24, 1992, in the case of stand- ards under paragraphs (3),1 and (4) of subsection (b)), each State regulatory authority (with re- spect to each gas utility for which it has rate- making authority) and each nonregulated gas utility shall provide public notice and conduct a hearing respecting the standards established by subsection (b), and, on the basis of such hearing, shall— (1) adopt the standard established by sub- section (b)(1), if, and to the extent, such au- thority or nonregulated utility determines that such adoption is appropriate and is con- sistent with otherwise applicable State law, and (2) adopt the standards established by para- graphs (2), (3) 2 (4), (5), and (6) of subsection (b), if, and to the extent, such authority or non- Page 1995 TITLE 15—COMMERCE AND TRADE § 3203 3 See Codification note below. regulated utility determines that such adop- tion is appropriate to carry out the purposes of this chapter, is otherwise appropriate, and is consistent with otherwise applicable State law. For purposes of any determination under para- graphs (1) and (2) and any review of such deter- mination in any court under section 3207 of this title, the purposes of this chapter supplement State law. Nothing in this subsection prohibits any State regulatory authority or nonregulated utility from making any determination that it is not appropriate to implement any such stand- ard, pursuant to its authority under otherwise applicable State law. (b) Establishment The following Federal standards are hereby es- tablished: (1) Procedures for termination of natural gas service No gas utility may terminate natural gas service to any gas consumer except pursuant to procedures described in section 3204(a) of this title. (2) Advertising No gas utility may recover from any person other than the shareholders (or other owners) of such utility any direct or indirect expendi- ture by such utility for promotional or polit- ical advertising as defined in section 3204(b) of this title. (3) Integrated resource planning Each gas utility shall employ, in order to provide adequate and reliable service to its gas customers at the lowest system cost. All plans or filings of a State regulated gas utility be- fore a State regulatory authority to meet the requirements of this paragraph shall (A) be up- dated on a regular basis, (B) provide the oppor- tunity for public participation and comment, (C) provide for methods of validating predicted performance, and (D) contain a requirement that the plan be implemented after approval of the State regulatory authority. Subsection (c) shall not apply to this paragraph to the extent that it could be construed to require the State regulatory authority to extend the record of a State proceeding in submitting reports to the Federal Government. (4) Investments in conservation and demand management The rates charged by any State regulated gas utility shall be such that the utility’s pru- dent investments in, and expenditures for, en- ergy conservation and load shifting programs and for other demand-side management meas- ures which are consistent with the findings and purposes of the Energy Policy Act of 1992 are at least as profitable (taking into account the income lost due to reduced sales resulting from such programs) as prudent investments in, and expenditures for, the acquisition or construction of supplies and facilities. This objective requires that (A) regulators link the utility’s net revenues, at least in part, to the utility’s performance in implementing cost-ef- fective programs promoted by this section; and (B) regulators ensure that, for purposes of recovering fixed costs, including its authorized return, the utility’s performance is not af- fected by reductions in its retail sales vol- umes. (5) Energy efficiency Each natural gas utility shall— (A) integrate energy efficiency resources into the plans and planning processes of the natural gas utility; and (B) adopt policies that establish energy ef- ficiency as a priority resource in the plans and planning processes of the natural gas utility. (6) Rate design modifications to promote en- ergy efficiency investments (A) In general The rates allowed to be charged by a nat- ural gas utility shall align utility incentives with the deployment of cost-effective energy efficiency. (B) Policy options In complying with subparagraph (A), each State regulatory authority and each non- regulated utility shall consider— (i) separating fixed-cost revenue recov- ery from the volume of transportation or sales service provided to the customer; (ii) providing to utilities incentives for the successful management of energy effi- ciency programs, such as allowing utilities to retain a portion of the cost-reducing benefits accruing from the programs; (iii) promoting the impact on adoption of energy efficiency as 1 of the goals of retail rate design, recognizing that energy effi- ciency must be balanced with other objec- tives; and (iv) adopting rate designs that encourage energy efficiency for each customer class. For purposes of applying the provisions of this chapter 3 to this paragraph, any ref- erence in this chapter 3 to November 9, 1978, shall be treated as a reference to December 19, 2007. (c) Procedural requirements Each State regulatory authority (with respect to each gas utility for which it has ratemaking authority) and each nonregulated gas utility, within the 2-year period specified in subsection (a), shall adopt, pursuant to subsection (a), each of the standards established by subsection (b), or, with respect to any such standard which is not adopted, such authority or nonregulated gas utility shall state in writing that it has deter- mined not to adopt such standard, together with the reasons for such determination. Such state- ment of reasons shall be available to the public. (d) Small business impacts If a State regulatory authority implements a standard established by subsection (b)(3) or (4), such authority shall— (1) consider the impact that implementation of such standard would have on small busi- nesses engaged in the design, sale, supply, in- Page 1996 TITLE 15—COMMERCE AND TRADE § 3204 stallation, or servicing of energy conservation, energy efficiency, or other demand-side man- agement measures, and (2) implement such standard so as to assure that utility actions would not provide such utilities with unfair competitive advantages over such small businesses. (Pub. L. 95–617, title III, § 303, Nov. 9, 1978, 92 Stat. 3150; Pub. L. 102–486, title I, § 115(b)–(d), Oct. 24, 1992, 106 Stat. 2803, 2804; Pub. L. 110–140, title V, § 532(b), (c), Dec. 19, 2007, 121 Stat. 1666, 1667.) Editorial Notes REFERENCES IN TEXT The Energy Policy Act of 1992, referred to in subsec. (b)(4), is Pub. L. 102–486, Oct. 24, 1992, 106 Stat. 2776. For complete classification of this Act to the Code, see Short Title note set out under section 13201 of Title 42, The Public Health and Welfare and Tables. CODIFICATION This chapter, referred to in subsec. (b)(6), was in the original ‘‘this subtitle’’, which was translated as mean- ing title III of Pub. L. 95–617 to reflect the probable in- tent of Congress. AMENDMENTS 2007—Subsec. (a)(2). Pub. L. 110–140, § 532(c), which di- rected substitution of ‘‘(4), (5), and (6)’’ for ‘‘and (4)’’ in subsec. (a), was executed by making the substitution in subsec. (a)(2) to reflect the probable intent of Congress. Subsec. (b)(5), (6). Pub. L. 110–140, § 532(b), added pars. (5) and (6). 1992—Subsec. (a). Pub. L. 102–486, § 115(d), in introduc- tory provisions inserted ‘‘(or after October 24, 1992, in the case of standards under paragraphs (3), and (4) of subsection (b))’’ and in par. (2) substituted ‘‘standards established by paragraphs (2), (3) and (4) of subsection (b)’’ for ‘‘standard established by subsection (b)(2)’’. Subsec. (b)(3), (4). Pub. L. 102–486, § 115(b), added pars. (3) and (4). Subsec. (d). Pub. L. 102–486, § 115(c), added subsec. (d). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2007 AMENDMENT Amendment by Pub. L. 110–140 effective on the date that is 1 day after Dec. 19, 2007, see section 1601 of Pub. L. 110–140, set out as an Effective Date note under sec- tion 1824 of Title 2, The Congress. REPORT TO PRESIDENT AND CONGRESS ON ENCOURAGE- MENT OF INTEGRATED RESOURCE PLANNING AND IN- VESTMENTS IN CONSERVATION AND ENERGY EFFI- CIENCY BY ELECTRIC UTILITIES Pub. L. 102–486, title I, § 115(e), Oct. 24, 1992, 106 Stat. 2804, provided that: ‘‘The report under section 111(e) of this Act [16 U.S.C. 2621 note] transmitted by the Sec- retary of Energy to the President and to the Congress shall contain a survey of all State laws, regulations, practices, and policies under which State regulatory authorities implement the provisions of paragraphs (3) and (4) of section 303(b) of the Public Utility Regu- latory Policies Act of 1978 [15 U.S.C. 3203(b)(3) and (4)]. The report shall include an analysis, prepared in con- junction with the Federal Trade Commission, of the competitive impact of implementation of energy con- servation, energy efficiency, and other demand side management programs by gas utilities on small busi- nesses engaged in the design, sale, supply, installation, or servicing of similar energy conservation, energy effi- ciency, or other demand-side management measures and whether any unfair, deceptive, or predatory acts or practices exist, or are likely to exist, from implementa- tion of such programs.’’ DEFINITIONS The definitions of State and system cost in section 2602 of Title 16, Conservation, apply to this section. § 3204. Special rules for standards (a) Procedures for termination of gas service The procedures for termination of service re- ferred to in section 3203(b)(1) of this title are procedures prescribed by the State regulatory authority (with respect to gas utilities for which it has ratemaking authority) or the nonregu- lated gas utility which provide that— (1) no gas service to a gas consumer may be terminated unless reasonable prior notice (in- cluding notice of rights and remedies) is given to such consumer and such consumer has a reasonable opportunity to dispute the reasons for such termination, and (2) during any period when termination of service to a gas consumer would be especially dangerous to health, as determined by the State regulatory authority (with respect to each gas utility for which it has ratemaking authority) or nonregulated gas utility, and such consumer establishes that— (A) he is unable to pay for such service in accordance with the requirements of the utility’s billing, or (B) he is able to pay for such service but only in installments, such service may not be terminated. Such procedures shall take into account the need to include reasonable provisions for elderly and handicapped consumers. (b) Advertising (1) For purposes of this section and section 3203 of this title— (A) The term ‘‘advertising’’ means the com- mercial use, by a gas utility, of any media, in- cluding newspaper, printed matter, radio, and television, in order to transmit a message to a substantial number of members of the public or to such utility’s gas consumers. (B) The term ‘‘political advertising’’ means any advertising for the purpose of influencing public opinion with respect to legislative, ad- ministrative, or electoral matters, or with re- spect to any controversial issue of public im- portance. (C) The term ‘‘promotional advertising’’ means any advertising for the purpose of en- couraging any person to select or use the serv- ice or additional service of a gas utility or the selection or installation of any appliance or equipment designed to use such utility’s serv- ice. (2) For purposes of this section and section 3203 of this title, the terms ‘‘political adver- tising’’ and ‘‘promotional advertising’’ do not include— (A) advertising which informs natural gas consumers how they can conserve natural gas or can reduce peak demand for natural gas, (B) advertising required by law or regula- tion, including advertising required under part 1 of title II of the National Energy Conserva- tion Policy Act [42 U.S.C. 8211 et seq.], (C) advertising regarding service interrup- tions, safety measures, or emergency condi- tions,