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EMD-80-5 1 (1979-11-06)

handle is hein.gao/gaobaazwu0001 and id is 1 raw text is: 
                                                                   J 1071'
        A4   UNITED STATES GENERAL ACCOUNTING OFFICE
                                   WASHINGTON, D.C. 20548

 ENERGY AND MINERALS
     DIVISION
                                               NOVEMBER 6.1979
     B-178205



     The Honorable Charles B. Curtis
     Chairman, Federal Energy                            110794
       Regulatory Commission                             109

     Dear Mr. Curtis:

          Subject: Review of FERC's control over interstate
                    gas supplieV (EMD-80-5)

          Although the Natural Gas Policy Act of 1978 (NGPA) was
     recently passed, natural gas in interstate commerce prior to
     November 8, 1978, remains, for the most part, subject to
     regulation under the Natural Gas Act of 1938 (NGA). While
     the new act makes major changes in the regulation of natural
     gas supplies, that gas which was flowing in interstate
     commerce prior to the new act's passage generally remains
 4- dedicated to the interstate market unless an abandonment
 5atthkorization is approved by the Commission. Accordingly,
 ,,-th_7Federal Energy Regulatory Commission (FERC) (formerly
     the'Federal Power Commission) 1/ has a continuing responsi-
*    bility for ensuring that these supplies are sold in interstate
0 o commerce. This responsibility includes the approval or
   'I-sapproval of producer requests to abandon interstate
   !atural gas sales.

          Because of the possible unauthorized diversion of these
     dedicated supplies to more profitable markets, we reviewed
     the Commission's control over interstate natural gas supplies.
     The review showed that (1) natural gas has been diverted
     from interstate commerce to more profitable intrastate
     markets, (2) -interstate sources of natural gas have been
     abandoned without Federal Power Commission (FPC) or FERC
     approval, (3) procedures for detecting abandonments and
     diversions, which were non-existent under FPC, have only
     recently been addressed by FERC and need strengthening,
     and (4) authority to assess civil penalties against violators
     is needed.


     1/The Federal Energy Regulatory Commission replaced the
     Federal Power Commission in September 1977, upon passage
     of the Department of Energy Organization Actwhich
       created the Department of Energy.


z0 7  '/6(


(308400)

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