55-1,111. Commission review of exit tap on gathering system, access, service, abandonment; procedure. - Kansas Statutes

55-1,111

Chapter 55.--OIL AND GAS Article 1.--OIL AND GAS WELLS; REGULATORY PROVISIONS

      55-1,111.   Commission review of exit tap on gatheringsystem, access, service, abandonment; procedure.The commission may, upon complaint by a party who has orseeks an exit tap on a gathering system, review disputes over access, serviceor abandonment, regardingexit taps on a gasgathering system, only as follows:

      (a)   Thecommission may review such disputes for reasons other than health or safetyof: (1) Exit taps provided pursuant to right-of-way agreements betweenlandownersand gas gathering system owners or operators; and (2) exit taps being provided,on or before the effective date of this act, directly to an end user or to apublic utility.

      (b)   The commission may review such disputes for reasons other than health orsafety forexit taps requested to serve a non-profit utility organized pursuant to K.S.A.66-104c, and amendments thereto, that provides natural gas service exclusivelyfor agricultural activity, but not including any domesticuse.

      (c)   Prior to filing a complaint with the commission, the existing or proposedexit tapcustomer shall meet the following requirements:

      (1)   Such customer must have acquired or be able to acquire a supply ofnatural gas withaccess to the gas gathering system;

      (2)   such customer must meet the same financial requirements and guaranteesas all othershippers on the gathering system, including credit worthiness; and

      (3)   such customer shall be prepared to pay all costs and anyassociatedexpenses for theexit tap installation and service as imposed by the provider.

      (d)   After review, the commission may order that exit tap service be providedand maydetermineif rates and charges for such service arereasonable and nondiscriminatory, when compared to rates for a similar serviceon the subject gathering system. However, such service shallnot be requiredunless the commission finds all of the following:

      (1)   That the service will not impair the ability of the gathering system tomeet all existingand anticipated demand on the system;

      (2)   that the provision of such service will not require installation,relocation ormodification of compression or other operations and equipment or features;

      (3)   that the charges for the service are adequate to cover the provider'sadministrativeand operating expenses for the exit tap service, the costs of installing theexit tap and areasonable profit margin considering the risks involved;

      (4)   that the service shall be provided on an interruptible basis and thatthe provider shallbe indemnified by the exit tap customer from liability for and shall not beheld liable for damagesto human life, crops, livestock, equipment, environmental or any other damagearising from theuse of the natural gas acquired through the service, or arising frominterruption or curtailment ofservice;

      (5)   that the customer has agreed that such service may be terminated forfailure topromptly pay billings or maintain credit worthiness;

      (6)   that the customer has agreed that such service may be terminated at anytime ifcontinued service threatens the operational stability and reliability of theprovider's system or ifservice cannot be continued to be safely provided and that service may beinterrupted for systemmaintenance, replacement or repairs;

      (7)   that such service will not impair or modify existing contracts held bythe gas gatheringsystem owner or operator;

      (8)   that such service will not unreasonably increase the total number of exittaps onthe provider's system;

      (9)   that such service can be provided in a safe and environmentally soundmanner; and

      (10)   that the provision of such service shall not adversely affect service orcost to anyother gas gathering service customers on the system.

      (e)   In addressing any complaint, the commission shall not review the terms,including theprice and volume of the natural gas commodity, of any purchase agreement foracquisition ofnatural gas by the exit tap customer and shall not order any producer, gathereror other party tosell natural gas to such customer or proposed customer and shall not requirethe provision of anew exit tap on any gathering system which has not previously provided at leastone exit tap prior to the effective date of this section.

      (f)   As used in this section:

      (1)   "Agricultural activity" means the growing or raising of horticultural andagricultural crops, hay, poultry, livestock anddairy products for commercial purposes including a feedlot and confined feedingfacility.

      (2)   "Confined feeding facility" means any lots, pens, pools or ponds.

      (3)   "Feedlot" means lots, yards, corrals, confined feeding facilities orother area in which livestock are fed for slaughter and are confined and suchadditional acreage as is necessary for the operation of the feedlot.

      History:   L. 2007, ch. 109, § 3; July 1.