[Federal Register Volume 60, Number 211 (Wednesday, November 1, 1995)]
[Proposed Rules]
[Pages 55504-55506]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-27010]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 284
[Docket No. RM96-1-000]
Standards For Business Practices Of Interstate Natural Gas
Pipelines
Issued: October 25, 1995.
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Advance Notice Of Proposed Rulemaking.
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SUMMARY: The Federal Energy Regulatory Commission is issuing a notice
requesting comments containing detailed proposals for standardizing ten
high priority business practices of interstate natural gas pipelines.
In addition, comments are solicited on whether the Commission should
standardize other business practices to better integrate the pipeline
grid.
DATES: Comments are due by March 15, 1996. Comments should be filed
with the Office of the Secretary and should refer to Docket No. RM96-1-
000.
ADDRESSES: Federal Energy Regulatory Commission, 888 First Street,
N.E., Washington, DC 20426.
FOR FURTHER INFORMATION CONTACT:
Michael Goldenberg, Office of the General Counsel, Federal Energy
Regulatory Commission, 825 North Capitol Street, NE, Washington, DC
20426, (202) 208-2294.
Marvin Rosenberg, Office of Economic Policy, Federal Energy Regulatory
Commission, 825 North Capitol Street, N.E., Washington, D.C. 20426,
(202) 208-1283.
Brooks Carter, Federal Energy Regulatory Commission, 888 First Street,
N.E., Washington, D.C. 20426, (202) 501-8145.
SUPPLEMENTARY INFORMATION: In addition to publishing the full text of
this document in the Federal Register, the Commission also provides all
interested persons an opportunity to inspect or copy the contents of
this document during normal business hours at 888 First Street, N.E.,
Washington, D.C. 20426.
The Commission Issuance Posting System (CIPS), an electronic
bulletin board service, provides access to the texts of formal
documents issued by the Commission. CIPS is available at no charge to
the user and may be accessed using a personal computer with a modem by
dialing (202) 208-1397. To access CIPS, set your communications
software to use 19200, 14400, 12000, 9600, 7200, 4800, 2400, or 1200
bps, full duplex, no parity, 8 data bits, and 1 stop bit. The full text
of this document will be available on CIPS in ASCII and WordPerfect 5.1
format. The complete text on diskette in WordPerfect format may also be
purchased from the Commission's copy contractor, La Dorn Systems
Corporation, also located at 888 First Street, N.E., Washington, D.C.
20426.
Advance Notice of Proposed Rulemaking
The Federal Energy Regulatory Commission (Commission) requests the
submission of comments, by March 15, 1996, containing detailed
proposals that will enable the Commission to adopt by regulation
certain standards for business practices and procedures involving
transactions between interstate natural gas pipelines and their
customers.
Background
In Order No. 563,1 the Commission began the process of
standardizing electronic communication in the natural gas industry by
developing standards for capacity release transactions. The capacity
release standards were developed by industry working groups composed of
representatives from all segments of the natural gas industry. During
the process of developing the capacity release standards, a Working
Group was established to begin the process of standardizing other
business transactions. The Working Group identified ten high priority
data elements for standardization. They are, in the order of priority
assigned by the Working Group: nominations, confirmations, allocated
gas flows, customer and contract imbalances, gas flow at metered
points, transportation invoices, pre-determined allocation
methodologies, gas payment remittance statements, gas sales invoices,
and uploads of capacity release prearranged deals.
\1\Standards For Electronic Bulletin Boards Required Under Part
284 of the Commission's Regulations, Order No. 563, 59 FR 516 (Jan.
5, 1994), III FERC Stats. & Regs. Preambles para. 30,988 (Dec. 23,
1993), order on reh'g, Order No. 563-A, 59 FR 23624 (May 6, 1994),
III FERC Stats. & Regs. Preambles para. 30,994 (May 2, 1994), reh'g
denied, Order No. 563-B, 68 FERC para. 61,002 (1994).
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Approximately one-and-a-half years ago, the Working Group
recommended against the Commission promulgating standards in this area
because it thought substantial progress could be made in developing and
implementing standards on a voluntary basis. The Working Group, for
example, anticipated significant implementation of the nomination and
confirmation standards by September 1, 1995.
The Commission accepted the consensus agreement of the Working
Group and did not institute a process leading to the mandated
implementation of business practice standards. The Commission, however,
recognized the importance of such standards in facilitating gas
movement across the pipeline grid.2 Depending on the progress made
by the industry, the Commission committed itself to reevaluate whether
it needed to become more involved in mandating the development and
implementation of the standards.3
\2\Order No. 563-A, III FERC Stats. & Regs. Preambles, at
31,050.
\3\Id.
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On September 21, 1995, the Commission held a conference in Docket
No. RM93-4-000 to evaluate the progress being made towards
standardization. Almost all the commenters at the conference conceded
that the industry has not achieved the anticipated progress. For
example, although the industry, through the Gas Industry Standards
Board (GISB)4 has
[[Page 55505]]
promulgated a set of standards governing the electronic communication
of nomination and confirmation information, the standards are not being
widely used.
\4\GISB is a private standards development organization that has
succeeded the industry Working Group as the primary vehicle for
developing communication standards. On October 23, 1995, the GISB
board voted to expand GISB's scope, subject to ratification by
GISB's membership, to include ``business practices that streamline
the transactional processes of the gas industry.'' As many of the
participants at the September 21, 1995 conference discussed, this
development was necessary for GISB to undertake the crafting of
standards associated with the industry's business practices.
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Many participants at the September 21, 1995 conference maintained
the standards do not go far enough to provide for efficient means of
communication. The promulgated standards deal only with the electronic
means of communicating the often idiosyncratic nomination and
confirmation information for each pipeline. The standards do nothing to
standardize the underlying information that is to be transmitted. As
one participant pointed out, the 18 largest pipelines use 14 different
nomenclatures to describe a pipeline receipt point and there is not
even agreement on whether to accept nominations using Mcf or MMBtu to
measure volumes. Without standardization of the nomination and
confirmation information itself, many participants argued the industry
would not achieve the business efficiencies which lie at the heart of
any standardization effort.
On October 18, 1995, the Interstate Natural Gas Association of
America (INGAA) filed a letter with the Commission outlining a proposed
process through which it, together with GISB and the rest of the
industry, could reduce the variations in pipeline business practices to
achieve an integrated pipeline grid. The INGAA proposal would
standardize the data elements, nomenclature, and business procedures
relating to the ten high priority data requirements identified by the
Working Group. In addition, consideration would be given to other
standards needed to coordinate pipeline business practices to promote
gas flow across an integrated pipeline network, such as standardization
of nomination deadlines, the start of the gas day, the nomination
period, and capacity release procedures.5 INGAA proposes a
schedule for development of standards that concludes with tariff
filings that begin in October 1996.
\5\These issues have been considered by the INGAA/American Gas
Distributors (AGD) Grid Integration Project. See Grid Integration
Project, Interim Reports of Task Forces (March 1995).
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Process For Standardizing Critical Business Practices
As a result of restructuring, the gas industry is becoming a
national marketplace. In order to establish a more efficient and
seamless pipeline grid, where buyers can easily and efficiently obtain
and transport gas from all potential sources of supply, the development
of standardized methods of conducting business along with standardized
methods of communication is critical. Without common business practices
and a common language for communication, the speed and efficiency with
which shippers can transact business across multiple pipelines is now,
and will continue to be, severely compromised. The industry must
expeditiously complete standardization of crucial business practices to
make the promise of a restructured and integrated pipeline grid a
reality. Accordingly, the Commission intends to establish, by rule,
standards governing pipelines' conduct of crucial business practices
and the electronic means by which pipelines will exchange information
with their customers and third-parties.
The Commission will begin this process by focusing on the ten high
priority data requirements identified by the industry itself. The items
identified by the Working Group are nominations, confirmations,
allocated gas flows, customer and contract imbalances, gas flow at
metered points, transportation invoices, pre-determined allocation
methodologies, gas payment remittance statements, gas sales invoices,
and uploads of capacity release prearranged deals.
By March 15, 1996, the Commission is soliciting comments containing
detailed proposals for the standard set of information (data elements)
that the Commission should require all pipelines to use in conducting
these ten business transactions as well as for standard nomenclature
and standards for any associated business practices and procedures. As
an example, commenters should propose a simplified standard set of
nomination information that will be sufficient for customers to submit
a nomination on any pipeline as well as a standard set of information
that would be included in the pipeline's confirmation of that request.
In addition to business practice standards, comments also should
address how the information is to be communicated. Comments should
include communication protocols for each business practice addressing
the scheduling and response times of information exchanges, performance
standards for assessing whether the system is substantially meeting
those goals, or other needed communication issues.
The Commission expects the proposals to be sufficiently detailed
that they could be included in a Notice of Proposed Rulemaking (NOPR).
The comments submitted on March 15, 1996, also should propose an
implementation schedule or plan, including development of the needed
electronic communication standards and time for full and effective
testing, so that the standards can be fully implemented by January 1,
1997.
In addition to the ten high priority data requirements, comments
should address whether the Commission should adopt standards for
pipeline business practices to help facilitate gas flow across the
pipeline grid, such as the standards considered by the INGAA/AGD Grid
Integration Project. For example, INGAA, in its letter, identified
standards for nomination deadlines, gas day, the effective nomination
period, and capacity release as ones appropriate for immediate
consideration. Comments also should consider whether any revisions to
current industry electronic communication protocols or practices are
needed to facilitate the movement of gas across the pipeline grid,
including alternatives to pipeline Electronic Bulletin Boards. Comments
should include detailed proposals of standards that the Commission
could adopt for implementation by January 1, 1997. The Commission
recognizes that standardization is an ongoing and evolving process, and
the Commission intends to be involved in further efforts to develop
standards that will promote a national pipeline grid.6
\6\For example, besides the ten high priority data elements, the
Working Group identified 23 additional business issues that require
standardization.
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The Commission urges representatives of the various segments of the
industry to work together to achieve a consensus on these standards.
The Commission's earlier efforts in this area benefitted greatly from
the Working Groups' input. The Commission continues to believe that the
industry should take the lead in developing and implementing standards
that will be both practical and workable for the variety of business
transactions which are presently taking place, as well as for those
which may occur in the future. With the expansion of the scope of
GISB's charter and the broad-based participation in GISB by all
industry segments,7 the Commission expects that GISB may become a
forum through which these industry efforts can be coordinated. If GISB
is able to provide substantive and timely proposals for
[[Page 55506]]
standards relating to the high priority data elements described above,
as well as others such as those identified in the Grid Integration
Project, the Commission will give those proposals considerable weight.
However, even in the absence of a consensus proposal from GISB, the
Commission intends to move ahead with this proceeding.
\7\The Commission is aware that not all industry participants
are members of GISB, but the Commission's understanding is that the
GISB process permits nonmembers to participate in developing
standards.
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As noted above, comments must be filed no later than March 15,
1996, along with an implementation plan which ensures that
implementation occurs by January 1, 1997. The Commission recognizes,
however, that with respect to discrete elements of the ten high
priority items, or other business practices, the industry may reach a
consensus on specific standards before that date.8 To the extent
the industry reaches consensus, the Commission encourages voluntary
implementation of those consensus standards.
\8\For example, in its October 18, 1995 letter, INGAA represents
that it intends to submit to GISB a pipeline consensus draft
addressing the minimum data elements and nomenclature for
nominations and confirmations by December 1995.
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An original and 14 copies of comments in response to this notice
must be filed with the Commission no later than March 15, 1996.
Comments should be filed with the Office of the Secretary, Federal
Energy Regulatory Commission, 888 First Street, N.E., Washington, DC
20426 and should refer to Docket No. RM96-1-000.
By the Commission.
Lois D. Cashell,
Secretary.
[FR Doc. 95-27010 Filed 10-31-95; 8:45 am]
BILLING CODE 6717-01-P
