term ‘qualified natural gas supply contract’ 
means any contract to acquire natural gas for 
resale by a utility owned by a governmental unit 
if the amount of gas permitted to be acquired 
under the contract by the utility during any 
year does not exceed the sum of—
‘‘(i) the annual average amount during 
the testing period of natural gas purchased 
(other than for resale) by customers of such 
utility who are located within the service 
area of such utility, and 
‘‘(ii) the amount of natural gas to be 
used to transport the prepaid natural gas to 
the utility during such year. 
‘‘(C) NATURAL
GAS
USED
TO
GENERATE 
ELECTRICITY.—Natural gas used to generate 
electricity shall be taken into account in deter-
mining 
the 
average 
under 
subparagraph 
(B)(i)—
‘‘(i) only if the electricity is generated 
by a utility owned by a governmental unit, 
and 
‘‘(ii) only to the extent that the elec-
tricity is sold (other than for resale) to cus-
tomers of such utility who are located with-
in the service area of such utility. 
‘‘(D) ADJUSTMENTS FOR CHANGES IN CUS-
TOMER BASE.—
‘‘(i) NEW BUSINESS CUSTOMERS.—If—
‘‘(I) after the close of the testing 
period and before the date of issuance 
of the issue, the utility owned by a gov-
ernmental unit enters into a contract 
to supply natural gas (other than for 
resale) for a business use at a property 
within the service area of such utility, 
and 
‘‘(II) the utility did not supply 
natural gas to such property during 
the testing period or the ratable 
amount of natural gas to be supplied 
under the contract is significantly 
greater than the ratable amount of gas 
supplied to such property during the 
testing period, 
then a contract shall not fail to be treated 
as a qualified natural gas supply contract 
by reason of supplying the additional nat-
ural gas under the contract referred to in 
subclause (I). 
‘‘(ii) LOST CUSTOMERS.—The average 
under subparagraph (B)(i) shall not exceed 
the annual amount of natural gas reason-
ably expected to be purchased (other than 
for resale) by persons who are located with-
in the service area of such utility and who, 
as of the date of issuance of the issue, are 
customers of such utility. 
‘‘(E) RULING
REQUESTS.—The Secretary 
may increase the average under subparagraph 
(B)(i) for any period if the utility owned by the 
governmental unit establishes to the satisfaction 
of the Secretary that, based on objective evidence 
of growth in natural gas consumption or popu-
lation, such average would otherwise be insuffi-
cient for such period. 
‘‘(F) ADJUSTMENT FOR NATURAL GAS OTH-
ERWISE ON HAND.—
‘‘(i) IN GENERAL.—The amount other-
wise permitted to be acquired under the 
contract for any period shall be reduced 
by—
‘‘(I) the applicable share of nat-
ural gas held by the utility on the date 
of issuance of the issue, and 
‘‘(II) the natural gas (not taken 
into account under subclause (I)) 
which the utility has a right to acquire 
during such period (determined as of 
the date of issuance of the issue). 
‘‘(ii) APPLICABLE
SHARE.—For pur-
poses of the clause (i), the term ‘applicable 
share’ means, with respect to any period, 
the natural gas allocable to such period if 
the gas were allocated ratably over the pe-
riod to which the prepayment relates. 
‘‘(G) INTENTIONAL
ACTS.—Subparagraph 
(A) shall cease to apply to any issue if the util-
ity owned by the governmental unit engages in 
any intentional act to render the volume of nat-
ural gas acquired by such prepayment to be in 
excess of the sum of—
‘‘(i) the amount of natural gas needed 
(other than for resale) by customers of such 
utility who are located within the service 
area of such utility, and