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<br />of just and reasonable rates for producers under the statutory language of <br />NGA. In the 6 years following the Phillips decision, only 10 rate cases <br />were decided while several thousand producers waited for FPC review of <br />their tariff schedules. 56 <br />In 1960 the FPC revised its approach in order to expedite producer <br />price control programs. It grouped producers into areas, gathered statis- <br />tical data from each producer in the area, and then determined a set of <br />rates applicable to each area. During the nine years it took to develop <br />these rates, wellhead prices were frozen at 1960 levels. 59 Market Inequi- <br />ties grew as frozen prices stimulated demand and discouraged producers <br />from dedicating new supplies to interstate markets. Beginning in 1969 FPC <br />initiated numerous small programs to stimulate production and to force as <br />much gas as possible into interstate markets. <br /> <br /> <br />2.3.2 Natural Gas Policy Act (NGPA) <br />The provisions of the NGPA were designed to redress the fundamental <br />market distortions that NGA pricing controls had created. Passed in <br />November 1978 as a part of the National Energy Act, NGPA establishes a <br />series of maximum lawful prices for the first sale of natural gas in both <br />interstate and intrastate markets and contains provisions for total price <br />deregulation of certain categories of gas in 1985 and 1987.60 <br />In addition to implementing wellhead price control programs the <br />Federal Energy Regulatory Commission (FERC), FPC's successor agency, <br />maintains jurisdiction over approval for abandonment of service for gas <br />dedicated to interstate commerce prior to November 8, 1978. Certain new <br />interstate gas will not be subject to this type of non-price regulation. <br />Under a new directive in NGPA, FERC may require supplier/purchaser <br />contracts to be up to 15 years in duration. 61 <br /> <br />2.3.2.1 Prices Under NGPA. The pricing system specified under NGPA <br />allows for monthly wellhead price increases in all gas and specifies differen- <br />tial prices for various categories. I ncentive pricing was created to stimulate <br />exploration and recovery of deep or otherwise hard-to-get gas. Nothing <br /> <br />2-20 <br />