[Federal Register Volume 62, Number 46 (Monday, March 10, 1997)]
[Rules and Regulations]
[Pages 10684-10690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5786]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 284
[Docket No. RM96-1-004; Order No. 587-C]
Standards for Business Practices of Interstate Natural Gas
Pipelines
Issued March 4, 1997.
AGENCY: Federal Energy Regulatory Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Energy Regulatory Commission is amending its open
access regulations by incorporating by reference standards promulgated
by the Gas Industry Standards Board (GISB). These standards require
interstate natural gas pipelines to publish specified information on
Internet Web pages and to follow certain new and revised business
practices procedures. These business practices standards supplement
standards adopted by the Commission in Order No. 587. 61 FR 39053 (Jul.
26, 1996).
DATES: This rule is effective April 9, 1997.
Pipelines are to make pro forma tariff filings to implement the
business practices standards by May 1, 1997. Implementation of the
Internet Web page standards must take place by August 1, 1997, and the
revised and new business practices standards by November 1, 1997.
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, 888 First Street, NE, Washington, DC 20426,
(202) 208-2294.
Marvin Rosenberg, Office of Economic Policy, Federal Energy Regulatory
Commission, 888 First Street, N.E.,
[[Page 10685]]
Washington, DC 20426, (202) 208-1283.
Kay Morice, Office of Pipeline Regulation, Federal Energy Regulatory
Commission, 888 First Street, N.E., Washington, DC 20426, (202) 208-
0507.
SUPPLEMENTARY INFORMATION: In addition to publishing the full text of
this document in the Federal Register, the Commission provides all
interested persons an opportunity to inspect or copy the contents of
this document during normal business hours in Room 2A, 888 First
Street, NE., Washington DC 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 if dialing locally or 1-800-856-3920 if dialing
long distance. To access CIPS, set your communications software to
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 order will
be available on CIPS in ASCII and WordPerfect 5.1 format. CIPS user
assistance is available at 202-208-2474.
CIPS is also available on the Internet through the Fed World
system. Telnet software is required. To access CIPS via the Internet,
point your browser to the URL address: http://www.fedworld.gov and
select the ``Go to the FedWorld Telnet Site'' button. When your Telnet
software connects you, log on to the FedWorld system, scroll down and
select FedWorld by typing: 1 and at the command line and type: /go
FERC. FedWorld may also be accessed by Telnet at the address
fedworld.gov.
Finally, the complete text on diskette in WordPerfect format may be
purchased from the Commission's copy contractor, La Dorn Systems
Corporation. La Dorn Systems Corporation is also located in the Public
Reference Room at 888 First Street, N.E., Washington, DC 20426.
Standards for Business Practices of Interstate Natural Gas
Pipelines; Order No. 587-C--Final Rule.
Docket No. RM96-1-004
Issued March 4, 1997.
The Federal Energy Regulatory Commission (Commission) is amending
its open access regulations to adopt standards requiring interstate
natural gas pipelines to publish certain information on Internet Web
Pages and to implement new business practice standards covering
nominations and flowing gas. The regulations incorporate by reference
standards promulgated by the Gas Industry Standards Board (GISB), a
private standards organization devoted to developing standards
representing a consensus of the interests in the natural gas industry.
I. Background
In Order No. 587,1 the Commission incorporated by reference
consensus standards developed by GISB covering certain industry
business practices--Nominations, Flowing Gas, Invoicing, and Capacity
Release--as well as datasets that detailed the data requirements needed
to conduct business transactions in these areas. On November 13, 1996,
the Commission issued a Notice of Proposed Rulemaking (NOPR) 2
proposing to adopt additional standards submitted by GISB (on September
30, 1996) in three general areas: communication standards for
conducting standardized business transactions across the Internet,
standards for providing other information on Internet Web pages, and
five revisions to existing business practices standards and 25 new
principles, definitions, and standards covering nominations and flowing
gas. The Commission already has issued, on January 30, 1997, a final
rule incorporating by reference the standards for conducting the
business transactions over the Internet. With respect to the remaining
two areas--publication of information on Internet Web pages and the
supplemental business practices standards, the NOPR proposed to follow
GISB's proposed schedule of a final rule to be issued in March 1997,
with implementation of the additional Internet standards in August of
1997 and pipeline tariff filings for the business practices standards
to be made in May, June, and July of 1997, with implementation in
November 1997.
---------------------------------------------------------------------------
\1\ Standards For Business Practices Of Interstate Natural Gas
Pipelines, Order No. 587, 61 FR 39053 (Jul. 26, 1996), III FERC
Stats. & Regs. Regulations Preambles para. 31,038 (Jul. 17, 1996),
reh'g denied, Order No. 587-A, 61 FR 55208 (Oct. 25, 1996), 77 FERC
para. 61,061 (Oct. 21, 1996), Order No. 587-B, 62 FR 5521 (Feb. 6,
1997), 78 FERC para. 61076 (1997).
\2\ Standards For Business Practices Of Interstate Natural Gas
Pipelines, Notice of Proposed Rulemaking, 61 FR 58790 (Nov. 19,
1996), IV FERC Stats. & Regs. Proposed Regulations para. 32,521
(Nov. 13, 1996).
---------------------------------------------------------------------------
In addition, the NOPR gave notice of a staff technical conference
that would be convened to discuss the future direction of
standardization and certain issues that had been disputed during the
GISB meetings. The technical conference was held on December 12 and 13,
1996, with comments on the conference to be submitted by February 21,
1997.
Fifteen comments were filed on the NOPR from Natural Gas Supply
Association, Williams Interstate Natural Gas System (WINGS), Burlington
Resources Oil & Gas Company (Burlington Resources), Natural Gas
Clearinghouse, Conoco, Inc., and Vastar Gas Marketing Inc.(filing
jointly) (NGC/Conoco/Vastar), Pacific Gas and Electric Company (PG&E),
Williston Basin Interstate Pipeline Company (Williston Basin), Altra
Energy Technologies, L.L.C. (Altra), Energy Managers Association
(Energy Managers), Gas Industry Standards Board (GISB), NorAm Gas
Transmission Company and Mississippi River Transmission Corporation
(filing jointly) (NorAm), ANR Pipeline Company and Colorado Interstate
Gas Pipeline Company (filing jointly), Enron Capital & Trade Resources
Corp. (Enron Capital & Trade Resources), TransCapcity Limited
Partnership (limited to technical conference issues), Southern
California Edison Company (SoCal Edison), and the PanEnergy Companies.
On February 21, 1997, comments on the technical conference were filed.
II. Discussion
The Commission is incorporating by reference the GISB standards for
providing information on Internet Web pages, with the exception of
Standard 4.3.5, which provides that the documents posted on pipeline
Web pages will be downloadable in a GISB-specified electronic
structure. The Commission is not adopting this standard because GISB
has failed to approve the requisite electronic structure.
The Commission is incorporating by reference the revisions to and
the new business practices principles, definitions, and standards, with
the exception of three standards, Nomination Standard 1.3.32 dealing
with intra-day nominations and Flowing Gas Standards 2.3.29 and 2.3.30
dealing the obligation of pipelines to enter into operational balancing
agreements (OBAs) and the ability of shippers to net imbalances across
contracts, respectively. While the Commission agrees that standards are
needed in these areas, it is not accepting these standards at this time
because the scope of the pipelines'' obligations to comply are not
clear.
The Commission also is making one change to the schedule proposed
by GISB. Rather than staggered compliance filings in May, June, and
July, all pipelines must file their pro forma tariff sheets on May 1,
1997. Pipelines are
[[Page 10686]]
required to implement the requirements to publish information on Web
pages by August 1, 1997 and to implement the business practices
standards by November 1, 1997.
NGC/Conoco/Vastar and Energy Managers contend that GISB was unable
to satisfactorily resolve issues in several hotly disputed areas, and
they ask the Commission to act now to adopt standards in these areas
that they have proposed.3 These suggested standards are all within
the areas discussed at the December 12 and 13, 1996 technical
conference on which comments were filed on February 21, 1997.
---------------------------------------------------------------------------
\3\ The proposed standards involve pooling, title transfer
tracking, ranking of gas packages, predetermined allocations, intra-
day nominations, operation flow orders, fuel sales, and imbalance
trading.
---------------------------------------------------------------------------
The Commission, therefore, will not act in these areas until it has
an opportunity to review the technical conference comments. The
Commission, however, is firmly committed to standardizing those
elements of pipeline service that will increase the efficiency of the
interstate pipeline grid as well as the competitive position of the
natural gas industry as a whole. As the Commission recognized in Order
No. 587, standardization is an on-going process, with new standards
being developed and refinements and enhancements made to existing
standards as experience is gained.4
---------------------------------------------------------------------------
\4\ Order No. 587, 61 FR at 39057, III FERC Stats. & Regs.
Preambles at 30,060.
---------------------------------------------------------------------------
The Commission recognizes that GISB too is continuing to consider
revisions and new standards in some of the same areas.5 If
progress in developing standards is impeded by intractable disputes
over policy issues, the Commission will resolve these policy issues to
expedite the process. The Commission urges GISB to identify such issues
as soon as they are manifest. Once the Commission makes a
determination, GISB can then develop the technical standards needed for
implementation.
---------------------------------------------------------------------------
\5\ For instance, during the technical conference, participants
pointed out that the disputed issues relating to pooling, title
transfer tracking, and gas package rankings, are part of a pilot
test being conducted by GISB on title transfer tracking. Transcript
of December 12, 1996 Conference, at 183. The results of this pilot
test are due in September of 1997.
---------------------------------------------------------------------------
A. Posting of Information on Internet Web Pages
GISB passed two standards relating to the posting of information on
Internet Web pages. Standard 4.3.6 requires pipelines to establish a
World Wide Web home page that provides the following information:
notices (critical notices, operation notices, system-wide notices);
Order No. 566 affiliated marketer information (affiliate allocation
log, discount postings); operationally available and unsubscribed
capacity; Index of Customers; and the pipeline's tariff. Standard 4.3.5
requires that the documents maintained on the pipeline's designated Web
site will be downloadable on demand in a GISB specified electronic
structure. All commenters support these requirements.
However, in the November 13, 1996 NOPR, the Commission stated that
GISB needed to file the electronic structures referenced in Standard
4.3.5 prior to the issuance of the final rule, so these structures
could be included in the rule.6 Since GISB has not yet approved
these electronic structures, the Commission cannot adopt Standard
4.3.5.
---------------------------------------------------------------------------
\6\ 61 FR at 58793, IV FERC Stats. & Regs. Proposed Regulations
at 33,259.
---------------------------------------------------------------------------
The Commission will adopt Standard 4.3.6, since specification of
the electronic structure for file downloads is not required for
pipelines to implement this standard's requirement for publishing the
specified information on Web pages. The ability to download
information, however, is critical for customers who do not want to read
the information on-line or who want the information in computer-
readable form. GISB, therefore, needs to adopt the required electronic
structure quickly. A rapid determination will still enable the
Commission to issue a final rule in time for the download structure to
be implemented on August 1, 1997, at the same time as the requirement
for publishing the information on Web pages.
Williston Basin raises questions about the portion of Standard
4.3.6 which states that pipelines should make all pertinent information
and functions now performed or contained on the pipelines'' proprietary
Electronic Bulletin Boards (EBBs) available in one mode of
communication (either through the Internet or another technology)
within a reasonable time after standards are developed for such
functions. Williston Basin contends that, while EBB information is
being transferred to the Internet, pipelines should not have to develop
GISB-approved procedures for both the Internet and EBBs because to do
so would be burdensome and cost prohibitive. Williston Basin also
requests clarification of the terms ``pertinent EBB functions'' and a
``reasonable amount of time,'' claiming that they do not provide
pipelines with specific direction to implement the standards.
Standard 4.3.6 applies only to providing information at pipeline
Web sites. Thus, Williston Basin is not required by this standard to
make any changes to its EBB procedures.7 There is no need to
interpret the terms referenced by Williston Basin. This portion of the
standard is hortatory, establishing the consensus of the industry on
the goals to be achieved. The standard requires no further
implementation by the pipelines until additional standards are
developed. Williston Basin will have the opportunity at that time to
raise any concerns with implementation.
---------------------------------------------------------------------------
\7\ Pipelines have to make changes to their EBBs when required
by other standards. For instance, Invoicing Standard 3.3.2 requires
that all paper and electronic transactions use standard field name
descriptors. This would apply both to paper and EBB invoicing
procedures. See GISB Interpretation C96012, approved February 6,
1997, http://www.NeoSoft.com/\gisb/gisb.htm (Committees,
Sub-Committees, and Task Forces) (Feb. 20, 1997).
---------------------------------------------------------------------------
B. Business Practices Standards
The revised and new business practices principles, definitions, and
standards 8 clarify and supplement the standards adopted in Order
No. 587.9 In part, these standards require pipelines to honor
shippers'' determinations of delivery priorities, clarify shipper's
abilities to correct operational flow orders (OFOs), and standardize
the methods for calculating the amount of gas needed to reimburse
pipelines for compressor fuel, so that shippers can accurately submit
nominations for transportation across multiple pipelines, with many
zones.
---------------------------------------------------------------------------
\8\ The revised standards are 1.3.7, 1.3.14, 1.3.23, 2.3.9, and
5.3.22. The new principles are 1.1.12 through 1.1.16, and 2.1.2 and
2.1.3. The new definitions are 1.2.5 through 1.2.7 and 2.2.1. The
new standards are 1.3.24 through 1.3.31, 1.3.33, 1.3.34, and 2.3.31.
\9\ After issuance of the November 13, 1996 NOPR, GISB approved
a change to Flowing Gas Standard 2.3.9 that clarified the language,
but did not change the meaning of the standard. The Commission is
adopting the revised language.
---------------------------------------------------------------------------
Out of the 30 business practices standards passed by GISB, the
Commission is not adopting three of the standards at this time, because
the pipelines' obligations under the standards are unclear. The lack of
clarity in these standards is understandable given the tight deadlines
on GISB and the obvious need for the various segments of the industry
to reach compromises. However, during the process of reviewing the
filings to comply with Order No. 587, it became clear that adoption of
imprecise standards can sometimes cause more harm than good. When
obligations are
[[Page 10687]]
not fully defined by the standard, pipelines propose divergent and non-
standardized approaches. The adoption of divergent approaches often
runs counter to the very purpose of standardization--the creation of
efficiency through adoption of uniform procedures.
For these three standards, the Commission has been unable to
discern from the GISB documentation the intended scope and meaning of a
standard. The discrepancies in implementation, therefore, make the
compliance filings much more difficult to process because the
Commission has difficulty, on an individual case basis, trying to
reconcile the divergent approaches, especially given the short time
frames established for compliance filings.
Rather than approving standards which are vague and then try to
create standardization during the compliance process, the Commission
will not accept the standards at this time. Standards in these areas
are needed. The Commission, however, will give GISB and the industry
more time--until September 1, 1997--in which to reconsider and devise
standards that delineate clearly the pipelines' obligations in these
areas. If no resolution is reached by then, the Commission will take
appropriate action to devise the needed standards.
The Commission will address below the specifics of the three
standards that are not being accepted. It will also address the
comments regarding a standard the Commission is accepting--Nomination
Standard 1.3.28 dealing with the posting of fuel rate standards.
1. Intra-Day Nominations and Standard 1.3.32
GISB proposed one additional definition and a new intra-day
nomination standards. Definition 1.2.7 provides for two types of intra-
day nominations: (i) A nomination received during the gas day for the
same day of gas flow, and (ii) A nomination received after the
nomination deadline for the following gas day. Standard 1.3.32 provides
that:
All pipelines should allow at least one intra-day nomination per
day for each transportation service that allows for intra-day
nominations. Additional intra-day nominations should be permitted on
a best efforts basis.
WINGS, NGC/Conoco/Vastar, Energy Managers, and Burlington Resources
raise questions about the intra-day nomination process. WINGS comments
that additional standards for intra-day nominations are needed, to
avoid discrepancies in pipeline implementation of the two kinds of
intra-day nominations defined by GISB. Energy Managers contends that
Standard 1.3.32 is a poor standard and should not be adopted, and it
suggests three replacement standards. NGC/Conoco/Vastar and Burlington
Resources contend further intra-day nomination standards are needed.
NGC/Conoco/Vastar seek standards to ensure that intra-day nominations
are available for all rate schedules and to deal with rescheduling of
service that is bumped by a higher priority firm service. Burlington
Resources argues that since GISB has not established standards on
whether firm intra-day nominations can bump scheduled interruptible
service, the Commission should establish a policy on this issue. It
maintains that firm service should be given bumping rights to reflect
the higher priority of that service, for which shippers are paying a
premium price.
The Commission agrees with WINGS that Standard 1.3.32 does not
provide sufficient clarity as to what is expected of the pipelines. The
term ``best efforts'' as used in this context does not describe exactly
when pipelines can decline to process intra-day nominations. For
instance, it may mean that pipelines have to process intra-day
nominations whenever submitted as long as such nominations do not
affect scheduled quantities for other shippers.10
---------------------------------------------------------------------------
\10\ The Commission already has dealt with the imprecision in
the phrase ``for each transportation service that allows for intra-
day nominations.'' In Tennessee Gas Pipeline Company, 78 FERC para.
61,007, slip op. at 9, the Commission held that all regular open-
access services, including interruptible service, must be accorded
the right to submit intra-day nominations. The Commission concluded,
however, that pipelines could propose a service eliminating the
intra-day nomination right for a reduced rate.
---------------------------------------------------------------------------
The Commission is particularly chary about adopting another non-
specific intra-day nomination standard given the lack of
standardization in the implementation of the intra-day nomination
standards adopted in Order No. 587. Nomination Standard 1.3.10 provides
that ``at least one (1) intra-day nomination can be submitted 4 hours
prior to gas flow.'' The standard, however, did not specify the method
of implementation, and pipelines chose two divergent models: a
``rolling intra-day'' nomination permitting the shipper to choose the
time at which it submits the intra-day nomination, which the pipeline
then processes in four hours from the time of submission; and a ``batch
process'' in which the pipeline sets a specified time for processing
intra-day nominations and all intra-day nominations submitted before
that time are accumulated and processed together. The batch process
also differs from pipeline to pipeline. Pipelines, for instance, have
established different times for batching intra-day nominations. In
addition, on some pipelines using the batch process, intra-day
nominations for firm service bump scheduled interruptible gas.11
Other batch pipelines propose only that the firm intra-day nominations
will be given priority over interruptible intra-day nominations.12
---------------------------------------------------------------------------
\11\ Tennessee, for instance, has a batch intra-day process and
permits bumping of interruptible with four hours notice to the
interruptible shipper. It does not, however, permit bumping for its
hourly intra-day nominations (available to firm shippers). Tennessee
Gas Pipeline Company, Pro Forma Tariff, Article III, section 4 (d)-
(m), Sheets 312-314c.
\12\ See Northern Border Pipeline Company, Pro Forma Second
Revised Volume No. 1, Pro Forma Sheet Nos. 100 and 101 (when intra-
day nominations exceed the capacity of the pipeline firm intra-day
nominations have priority over interruptible).
---------------------------------------------------------------------------
This diverse approach means that shippers will be unable to
coordinate effectively their intra-day nominations, since an intra-day
nomination may be due at one time on one pipeline, while a different
time is specified on an interconnecting pipeline. In addition, during
the staff technical conference held on December 12 and 13, 1996, other
issues relating to intra-day nominations were raised. Some participants
favored the rolling intra-day nomination approach over the batch
process because it gave shippers more flexibility in scheduling their
intra-day nominations.13 Others raised the question of whether a
rolling approach to intra-day nominations can be implemented without a
no-bump rule. They claimed that permitting firm intra-day nominations
to bump scheduled interruptible transportation would create scheduling
difficulties, because each intra-day nomination potentially would
affect other nominations, causing a ripple effect up and down the
pipeline and interconnecting pipelines.14
---------------------------------------------------------------------------
\13\ Transcript of December 12, 1996 conference, at 116, 213;
Transcript of December 13, 1996 conference, at 127.
\14\ Transcript of December 12, 1996 conference, at 117;
transcript of December 13, 1996 conference, at 136.
---------------------------------------------------------------------------
GISB itself appears to recognize that its current standards do not
achieve the necessary standardization. The GISB Executive Committee has
voted to establish a task force to examine the lack of coordination in
intra-day nomination procedures.
In order to achieve the efficiencies that derive from uniform
nomination procedures, greater standardization of intra-day nomination
procedures clearly is required. Clarification of the intended meaning
of Standard 1.3.32 may not
[[Page 10688]]
create the needed standardization, and the focus, therefore, should not
be on clarifying the existing standard, but on achieving the needed
uniformity in the intra-day nomination process. Accordingly, the
Commission will review the comments submitted on February 21, 1997
along with any recommendations from GISB filed on September 1, 1997 in
determining how to proceed on this issue.
2. Flowing Gas Standards 2.3.29 and 2.3.30
GISB Standard 2.3.29 states:
At a minimum, transportation service providers should enter into
Operational Balancing Agreements at all pipeline-to-pipeline
(interstate and intrastate) interconnects, where economically and
operationally feasible.
GISB Standard 2.3.30 states:
All transportation service providers should allow service
requesters (in this instance, service requester excludes agents) to
net similarly situated imbalances on and across contracts with the
service requester. In this context, ``similarly situated
imbalances'' includes contracts with substantially similar financial
and operational implications to the transportation service provider.
Energy Managers suggests that the phrase ``economically and
operationally feasible'' waters down, and therefore should be removed
from, Standard 2.3.29. NGC/Conoco/Vastar state that they support
Standard 2.3.30 as long as the term ``similarly situated'' is not read
so narrowly as to defeat the purpose of the standard.
While the Commission finds that standards requiring OBAs and
netting of imbalances are necessary, the use of the terms
``economically and operationally feasible'' and ``similarly situated
financial and operational implications'' do not define precisely enough
the pipelines' obligations under the standards. For example, there is
no basis for determining whether shippers should be able to net
imbalances between an interruptible contract and a firm contract in the
same zone. Also, the terms economically feasible and similarly situated
financial implications are undefined and seem unnecessary in both
standards. If ``financial'' in Standard 2.3.30 refers to the rate paid
for service, for instance, there seems no basis for treating a
discounted contract differently from a full-rate contract in terms of
netting imbalances.15
---------------------------------------------------------------------------
\15\ A review of the discussions at the GISB Executive Committee
meeting, where the language was developed, does not clarify the
intended meaning of the standards. Volume IV, Report of the Gas
Industry Standards Board, Docket No. RM96-1-000, 398-99, 412-428
(September 30, 1996). For instance, examples are discussed of
situations that might fall within or without the Standards, there
was no delineation or agreement on the full scope of the intended
meaning.
---------------------------------------------------------------------------
Rather than attempting to deal with the meaning of these terms in
individual compliance filings, GISB needs to define precisely the
circumstances in which pipelines can decline to permit netting of
imbalances. Therefore, the Commission will not be accepting this
standard in this rule and will give GISB until September 1, 1997 to
clarify these standards.
3. Nomination Standard 1.3.28
Two comments raise questions about Standard 1.3.28, which provides
that fuel rates for in-kind fuel reimbursement should be made effective
only at the beginning of the month. WINGS expresses concern about this
standard because one of its pipelines, Kern River, has little or no
system storage. Without storage, WINGS contends that the pipeline may,
on rare occasions, have to adjust fuel rates in the middle of the
month. WINGS suggests that this standard be made a principle or that,
if adopted as a standard, the Commission should not preclude a pipeline
from filing to change fuel rates in mid-month upon a showing of need.
The Commission will not change this standard to a principle as
requested by WINGS. Standardizing the in-kind reimbursement process for
fuel is important to simplify the nomination process, particularly when
shippers are transporting gas across many pipelines, with a
multiplicity of zones. A consensus of the industry found that to
simplify the nomination process, all pipelines must set fuel rates at
the beginning of the month. With this limitation on fuel rate changes,
shippers can obtain the correct fuel rates at one time and update their
computer programs to reflect these rates on a set schedule, without
having to be concerned about mid-month, random changes on select
pipelines. WINGS fails to provide data or other evidence that pipelines
without storage are unable to make adjustments or other arrangements so
that they can comply with the standard. For example, Great Lakes Gas
Transmission Limited Partnership, another pipeline without storage,
posts monthly fuel percentages and makes adjustments for actual fuel
use in the percentages for subsequent months.16
---------------------------------------------------------------------------
\16\ Great Lakes Gas Transmission Limited Partnership, 76 FERC
para. 61,260, at 62,333 (1996).
---------------------------------------------------------------------------
Enron Capital & Trade Resources seeks clarification that in
implementing this standard, pipelines should notify shippers of fuel
rate changes no less than 30 days prior to the proposed effective date.
Enron Capital & Trade Resources contends that 30-days notice is in
accord with the notice requirement for tariff changes contained in
section 154.207 of the Commission's regulations.
The Commission will not grant the requested clarification. The
standard itself specifies no advance notice period. The purpose of the
standard is to establish one date when shippers can obtain fuel
reimbursement percentages so that they can program their computers once
for the entire month. Thus, the fuel rates need to be posted in
sufficient time for shippers to use these rates in making nominations
subject to the new rate. To the extent that pipelines make tariff
filings to change fuel reimbursement rates, they would have to comply
with the Commission filing and notice regulations. Some pipelines,
however, have fuel tracking or other provisions in their tariffs which
permit changes in fuel rates without tariff filings.17
---------------------------------------------------------------------------
\17\ Id.
---------------------------------------------------------------------------
III. Implementation Schedule
Pipelines will be required to implement the Internet Web page
standards by August 1, 1997, and the revised and new business practices
standards on November 1, 1997. Rather than adopting the staggered
schedule for pipeline tariff filings proposed by GISB, the pipelines
will be required to make their pro forma tariff filings to comply with
the standards by May 1, 1997.
The Commission's experience based on the first set of compliance
filings is that it takes a substantial period of time to review all of
the filings. Under the proposed staggered schedule, 60 tariff filings
would be due on July 1, 1997, which would not provide the Commission
with sufficient time to review these filings and issue the two rounds
of orders in time to meet a November 1, 1997 implementation date.
The Commission recognizes that some pipelines may be in the process
of implementing the standards adopted in Order No. 587 at the same time
they are making pro forma tariff filings to comply with this rule.
However, there are many fewer business practices standards adopted in
this rule than in Order No. 587, and, more important, implementation of
these standards do not require fundamental changes in pipeline
operations. They merely build upon the standards previously adopted.
Thus, pipelines should not face major obstacles in making the required
filings on May 1, 1997, and the Commission will require all filings on
this date to
[[Page 10689]]
ensure that the filings can be reviewed and processed in a timely
fashion.
In making their pro forma tariff filings, pipelines must file the
pro forma sheets as if they are proposed revisions of sheets in the
existing tariff volume (with changes identified as provided in
Sec. 154.201 of the Commission's regulations) with the words ``Pro
Forma'' before the volume name.18 In addition, in complying with
Sec. 154.203 of the Commission's regulations, a pipeline must file as
part of its statement of the nature, the reasons, and the basis for the
filing, a complete table showing for each GISB standard adopted by the
Commission, in this rule, the complying tariff sheet number, and an
explanatory statement, if necessary, describing any reasons for
deviations from or changes to each GISB standard. Any pipeline seeking
waiver or extension of the requirements of this rule is required to
file its request within 30 days of the issuance of this rule. Comments
on these filings will be due 21 days from the date of filing.
---------------------------------------------------------------------------
\18\ E.g. Fourth Revised Sheet No. 150, FERC Gas Tariff, Pro
Forma Third Revised Volume No. 1. For the electronically filed
tariff sheets, ``Pro Forma'' must be inserted at the beginning of
the name field (VolumeID) in the Tariff Volume Record, i.e., the
TF02 record.
---------------------------------------------------------------------------
IV. Regulatory Flexibility Act Certification
The Regulatory Flexibility Act of 1980 (RFA) 19 generally
requires a description and analysis of final rules that will have
significant economic impact on a substantial number of small entities.
The regulations adopted in this rule impose requirements only on
interstate pipelines, which are not small businesses, and, these
requirements are, in fact, designed to reduce the difficulty of dealing
with pipelines by all customers, including small businesses.
Accordingly, pursuant to section 605(b) of the RFA, the Commission
hereby certifies that the regulations adopted in this rule will not
have a significant adverse impact on a substantial number of small
entities.
---------------------------------------------------------------------------
\19\ /5 U.S.C. 601-612.
---------------------------------------------------------------------------
V. Environmental Analysis
The Commission is required to prepare an Environmental Assessment
or an Environmental Impact Statement for any action that may have a
significant adverse effect on the human environment. 20 The
Commission has categorically excluded certain actions from these
requirements as not having a significant effect on the human
environment. 21 The action taken here falls within categorical
exclusions in the Commission's regulations for rules that are
clarifying, corrective, or procedural, for information gathering,
analysis, and dissemination, and for sales, exchange, and
transportation of natural gas that requires no construction of
facilities. 22 Therefore, an environmental assessment is
unnecessary and has not been prepared in this rulemaking.
---------------------------------------------------------------------------
\20\ Order No. 486, Regulations Implementing the National
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. &
Regs. Preambles 1986-1990 para. 30,783 (1987).
\21\ 18 CFR 380.4.
\22\ See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), 380.4(a)(27).
---------------------------------------------------------------------------
VI. Information Collection Statement
OMB's regulations in 5 CFR 1320.11 require that it approve certain
reporting and recordkeeping requirements (collections of information)
imposed by an agency. Upon approval of a collection of information, OMB
shall assign an OMB control number and an expiration date. Respondents
subject to the filing requirements of this Rule shall not be penalized
for failing to respond to these collections of information unless the
collections of information display valid OMB control numbers.
The collections of information related to the subject Final Rule
fall under the existing reporting requirements of FERC-549C, Standards
for Business Practices of Interstate Natural Gas Pipelines (OMB Control
No. 1902-0174) and FERC-545, Gas Pipeline Rates: Rate Change (Non-
Formal) (OMB Control No. 1902-0154). The following estimates of
reporting burden are related only to this Rule and include the costs
for pipelines to comply with the new and revised business practice
standards and the additional costs of implementing the requirement for
posting additional information on an Internet Web page. The burden
estimates are primarily related to start-up and will not be on-going
costs.
Public Reporting Burden: (Estimated Annual Burden).
----------------------------------------------------------------------------------------------------------------
Estimated
Number of Total Estimated total
Affected data collection respondents responses hours per hours
(annual) response (annual)
----------------------------------------------------------------------------------------------------------------
FERC-545.......................................................... 86 86 58 4,988
FERC-549C......................................................... 86 86 3,147 270,642
---------------------------------------------
Total....................................................... 86 86 3,205 275,630
----------------------------------------------------------------------------------------------------------------
The total annual hours for collection (including record keeping, if
appropriate) is estimated to total 275,630. The average annualized cost
per respondent is projected to be the following:
----------------------------------------------------------------------------------------------------------------
Annualized
Annualized costs
capital/ (operations Total
Affected data collection startup and Number of annualized
costs per maintenance) respondents costs
respondent per
respondent
----------------------------------------------------------------------------------------------------------------
FERC-545................................................... $2,900 0 86 $249,400
FERC-549C.................................................. 157,350 0 86 13,532,100
----------------------------------------------------
Total................................................ 160,250 0 86 13,781,500
----------------------------------------------------------------------------------------------------------------
The business practices standards and Internet protocols adopted in
this Rule are necessary to establish a more efficient and integrated
pipeline grid. Requiring such standards on an industry-wide basis will
reduce the variations in pipeline business and communication practices
and will allow buyers to easily and efficiently obtain
[[Page 10690]]
and transport gas from all potential sources of supply. The
standardization of business practices conforms to the Commission's plan
for efficient information collection, communication, and management
within the natural gas industry. The Commission has assured itself, by
means of its internal review, that there is specific, objective support
for the burden estimates associated with the information requirements.
The information required in this Final Rule will be reported
directly to the industry users and later be subject to audit by the
Commission. The implementation of these data requirements will help the
Commission carry out its responsibilities under the Natural Gas Act and
coincide with the current regulatory environment which the Commission
instituted under Order No. 636 and the restructuring of the natural gas
industry.
Interested persons may obtain information on the reporting
requirements by contacting the Federal Energy Regulatory Commission,
888 First Street NE., Washington, DC 20426 [Attention: Michael Miller,
Information Services Division, 202-208-1415] or the Office of
Management and Budget [Attention: Desk Officer for the Federal Energy
Regulatory Commission 202-395-3087].
VII. Effective Date
These regulations are effective April 9, 1997. The Commission has
determined, with the concurrence of the Administrator of the Office of
Information and Regulatory Affairs of OMB, that this rule is not a
``major rule'' as defined in section 351 of the Small Business
Regulatory Enforcement Fairness Act of 1996.
List of Subjects in 18 CFR Part 284
Continental shelf, Incorporation by reference, Natural gas,
Reporting and recordkeeping requirements.
By the Commission.
Lois D. Cashell,
Secretary.
In consideration of the foregoing, the Commission amends Part 284,
Chapter I, Title 18, Code of Federal Regulations, as set forth below.
PART 284--CERTAIN SALES AND TRANSPORTATION OF NATURAL GAS UNDER THE
NATURAL GAS POLICY ACT OF 1978 AND RELATED AUTHORITIES
1. The authority citation for Part 284 continues to read as
follows:
Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7532;
43 U.S.C. 1331-1356.
2. In Sec. 284.10, paragraphs (b)(1)(i) through (b)(1)(v) are
revised to read as follows:
Sec. 284.10 Standards for Pipeline Business Operations and
Communications.
* * * * *
(b) * * *
(1) * * *
(i) Nominations Related Standards (Version 1.1, January 31, 1997),
with the exception of Standard 1.3.32;
(ii) Flowing Gas Related Standards (Version 1.1, January 31, 1997),
with the exception of Standards 2.3.29 and 2.3.30;
(iii) Invoicing Related Standards (Version 1.1, January 31, 1997);
(iv) Electronic Delivery Mechanism Related Standards (Version 1.0,
October 24, 1996), with the exception of Standard 4.3.5; and
(v) Capacity Release Related Standards (Version 1.1, January 31,
1997).
* * * * *
[FR Doc. 97-5786 Filed 3-7-97; 8:45 am]
BILLING CODE 6717-01-P
