[Federal Register Volume 63, Number 96 (Tuesday, May 19, 1998)]
[Proposed Rules]
[Pages 27526-27529]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13293]
[[Page 27526]]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 161
[Docket No. RM98-7-000]
Reporting Interstate Natural Gas Pipeline Marketing Affiliates on
the Internet
May 13, 1998.
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Notice of Proposed Rulemaking.
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SUMMARY: The Federal Energy Regulatory Commission (Commission) is
proposing to amend its Standards of Conduct regulations to require that
interstate natural gas pipelines identify the names and addresses of
their marketing affiliates on their web sites on the Internet and
update the information within three business days of any change.
Pipelines would also be required to state the dates the information was
last updated.
DATES: Written comments must be received by the Commission by June 19,
1998.
ADDRESSES: File comments with the Office of the Secretary, Federal
Energy Regulatory Commission, 888 First Street, N.E., Washington, DC
20426.
FOR FURTHER INFORMATION CONTACT: Stuart Fischer, Office of General
Counsel, Federal Energy Regulatory Commission 888 First Street, NE.,
Washington, DC 20426. Telephone: (202) 208-1033.
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 in the Public Reference Room
at 888 First Street, NE., Room 2A, Washington, DC 20426.
The Commission Issuance Posting System (CIPS) provides access to
the texts of formal documents issued by the Commission. CIPS can be
accessed via Internet through FERC's Homepage (http://www.ferc.fed.us)
using the CIPS Link or the Energy Information Online icon. The full
text of this document will be available on CIPS in ASCII and
WordPerfect 6.1 format. CIPS is also available through the Commission's
electronic bulletin board service 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. User assistance is available at 202-208-2474
or by E-mail to [email protected]
This document is also available through the Commission's Records
and Information Management System (RIMS), an electronic storage and
retrieval system of documents submitted to and issued by the Commission
after November 16, 1981. Documents from November 1995 to the present
can be viewed and printed. RIMS is available in the Public Reference
Room or remotely via Internet through FERC's Homepage using the RIMS
link or the Energy Information Online icon. User assistance is
available at 202-208-2222, or by E-mail to [email protected]
Finally, the complete text on diskette in WordPerfect format may be
purchased from the Commission's copy contractor, La Dorn System
Corporation. La Dorn Systems Corporation is located in the Public
Reference Room at 888 First Street, NE., Washington, DC 20426.
Notice of Proposed Rulemaking
May 13, 1998.
The Federal Energy Regulatory Commission (Commission) is proposing
to amend its regulations in Part 161.3 to require that interstate
natural gas pipelines identify the names and addresses of their
marketing affiliates on their web sites on the Internet. By doing so,
the Commission will make it easier for the public to identify each
interstate gas pipeline's current marketing affiliates. The Commission
believes that the new regulation is necessary to further assist its
oversight efforts as well as to permit shippers to effectively monitor
transportation transactions between pipelines and their affiliated
marketers.
I. Background
The Commission, in Order Nos. 497 et seq. \1\ and Order Nos. 566 et
seq. \2\ established rules intended to prevent interstate natural gas
pipelines from providing preferential treatment to their marketing or
brokering affiliates. Specifically, the Commission adopted Standards of
Conduct (codified at Part 161 of the Commission's regulations) \3\ and
reporting requirements (codified in sections 161.3(h)(2) and
250.16).\4\
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\1\ Order No. 497, 53 FR 22139 (June 14, 1988), FERC Stats. &
Regs. 1986-1990 para. 30,820 (1988); Order No. 497-A, order on
rehearing, 54 FR 52781 (December 22, 1989), FERC Stats. & Regs.
1986-1990 para. 30,868 (1989); Order No. 497-B, order extending
sunset date, 55 FR 53291 (December 28, 1990), FERC Stats. & Regs.
1986-1990 para. 30,908 (1990); Order No. 497-C, order extending
sunset date, 57 FR 9 (January 2, 1992), FERC Stats. & Regs. 1991-
1996 para. 30,934 (1991), rehearing denied, 57 FR 5815 (February 18,
1992), 58 FERC para. 61,139 (1992); Tenneco Gas v. FERC (affirmed in
part and remanded in part), 969 F.2d 1187 (D.C. Cir. 1992); Order
No. 497-D, order on remand and extending sunset date, FERC Stats. &
Regs. 1991-1996 para. 30,958 (December 4, 1992), 57 FR 58978
(December 14, 1992); Order No. 497-E, order on rehearing and
extending sunset date, 59 FR 243 (January 4, 1994), 65 FERC para.
61,381 (December 23, 1993); Order No. 497-F, order denying rehearing
and granting clarification, 59 FR 15336 (April 1, 1994), 66 FERC
para. 61,347 (March 24, 1994); and Order No. 497-G, order extending
sunset date, 59 FR 32884 (June 27, 1994), FERC Stats. & Regs. 1991-
1996 para. 30,996 (June 17, 1994).
\2\ Standards of Conduct and Reporting Requirements for
Transportation and Affiliate Transactions, Order No. 566, 59 FR
32885 (June 27, 1994), FERC Stats. & Regs. 1991-1996 para. 30,997
(June 17, 1994); Order No. 566-A, order on rehearing, 59 FR 52896
(October 20, 1994), 69 FERC para. 61,044 (October 14, 1994); Order
No. 566-B, order on rehearing, 59 FR 65707 (December 21, 1994), 69
FERC para. 61,334 (December 14, 1994).
\3\ 18 CFR 161.3 (1997).
\4\ 18 CFR 161.3(h)(2) and 250.16 (1997).
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The Standards of Conduct govern the relationships between pipelines
and their marketing affiliates. In general, they provide that pipelines
and their marketing affiliates must function independently of each
other. Pipelines cannot favor their marketing affiliates in providing
transportation services or in providing transportation information or
transportation discounts not available to non-affiliates.
Currently, there is no requirement in the Commission's regulations
for pipelines to report the names of their marketing affiliates or
changes in the status of marketing affiliates through, for example,
acquisitions of new affiliates, or divestitures, consolidations, or
name changes of prior affiliates. While pipelines are required to list
all of their affiliated entities, including marketing entities, in
their annual Form No. 2 filings, annual data cannot keep abreast of
changes, and the Form No. 2 does not require pipelines to identify
which entities are ``marketing'' or ``brokering''
[[Page 27527]]
affiliates as defined under section 161.2(c) of the Commission's
regulations.\5\
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\5\ 18 CFR 161.2(c) (1997).
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Despite the absence of a specific regulatory requirement to
identify marketing affiliates, several pipelines have identified the
names of their marketing affiliates in their tariffs and/or standards
of conduct and filed updates whenever there were changes in identity.
However, two pipelines recently decided to stop listing the names of
their marketing affiliates in their standards of conduct because of the
administrative burden of filing the information.\6\ As discussed below,
by requiring the affiliate information to be posted on the Internet,
pipelines will be able to provide up-to-date information with minimal
administrative burden.
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\6\ In El Paso Natural Gas Pipeline Company, 79 FERC para.
61,086 (1997) (El Paso), the pipeline stated that it had revised its
standards of conduct three times in the previous year to reflect
changes to corporate structure or names of marketing affiliates and
believed that such filings were unnecessary. The Commission ruled
that El Paso did not have to revise its standards of conduct each
time the identity of a marketing affiliate changed. More recently,
in Texas Gas Transmission Corp., 83 FERC para. 61,048 (1998) (Texas
Gas), the Commission accepted a pipeline's request to delete the
names of its marketing affiliates from its standards of conduct. In
El Paso, the pipeline stated that the names of its marketing
affiliates were publicly available through the capacity allocation
log on its electronic bulletin board. In Texas Gas, the pipeline
stated that it would post on its electronic bulletin board a list of
its marketing affiliates.
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II. Proposed Changes to Regulations
The Commission proposes to add section 161.3(l), which would
require pipelines to post on their web sites on the Internet, the names
and addresses of their marketing affiliates and to update this
information within three business days of any change. A pipeline would
also be required to state the date the information was last updated. In
Order No. 587 et seq., the Commission began phasing out the use of
electronic bulletin boards in favor of posting information on pipeline
web sites on the Internet.\7\ The standards for Internet posting are
set out in section 284.10 of the Commission's regulations, as amended
in Order No. 587-G.\8\
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\7\ 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);
Order No. 587-B, 62 FR 5521 (Feb. 6, 1997), III FERC Stats. & Regs.
Regulations Preambles para. 31,046 (Jan. 30, 1997); Order No. 587-C,
62 FR 10684 (Mar. 10, 1997), III FERC Stats. & Regs. Regulations
Preambles para. 31,050 (Mar. 4, 1997). In Order No. 587-G, the
Commission issued regulations requiring that pipelines conduct all
transportation transactions over the Internet, rather than over
electronic bulletin boards, by June 1, 1999. 63 FR 20072 (April 23,
1998).
\8\ Id. (to be codified at 18 CFR 284.10).
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III. Discussion
The Commission believes that the new regulation is necessary to
further assist its oversight efforts as well as to enable the public to
monitor pipeline-affiliate transactions. It is important for the public
and the Commission to have an updated picture of the pipelines'
marketing affiliates to determine if pipelines are complying with the
regulatory requirements. Marketing affiliations change rapidly in
today's business climate. In El Paso and Texas Gas, the pipelines
stated that they had made three changes to the lists of their marketing
affiliates in the previous year. Moreover, the recent trend of mergers
of large pipelines makes it imperative to determine which marketing
entities are affiliated with which pipelines.9 The proposed
requirements would ensure that the Commission and the public can
identify pipelines' marketing affiliates.
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\9\ Recent examples include Natural Gas Pipeline Company of
America's merger with KN Energy, and El Paso Natural Gas Company's
merger with Tennessee Gas Pipeline Company and its affiliated
pipelines.
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To minimize the burden on pipelines and the Commission's
administrative resources, we propose that each pipeline post the names
and addresses of its marketing affiliates on the pipeline's web site on
the Internet. In this way, the burden on pipelines would be slight, as
pipelines already are required to have web sites under Order No. 587-C
and would only have to add the affiliate information.
IV. Regulatory Flexibility Act Certification
The Regulatory Flexibility Act of 1980 (RFA) 10
generally requires a description and analysis of rules that will have
significant economic impact on a substantial number of small entities.
Pursuant to section 605(b) of the RFA, the Commission hereby certifies
that the regulations proposed herein will not have a significant
adverse impact on a substantial number of small entities. The proposed
rules will benefit small entities by making it easier for small
customers to monitor pipelines' transactions with their marketing
affiliates.
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\10\ 5 U.S.C. 601-612 (1996).
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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.11 The
Commission has categorically excluded certain actions from these
requirements as not having a significant effect on the human
environment.12 This proposed rule falls within the
categorical exclusion which specifies that information gathering,
analysis, and dissemination are not major federal actions that have a
significant effect on the human environment.13 The proposed
rule also falls under the categorical exclusion for rules concerning
the sale, exchange, and transportation of natural gas that requires no
construction of facilities.14 Thus, neither an environmental
impact statement nor an environmental assessment is required.
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\11\ Order No. 486, Regulations Implementing the National
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Statutes
and Regulations, Regulations Preambles 1986-1990 para. 30,783
(1987).
\12\ 18 CFR 380.4 (1997).
\13\ 18 CFR 380.4(a)(5) (1997).
\14\ 18 CFR 380.4(a)(27) (1997).
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VI. Information Collection Statement
The following collection of information contained in this proposed
rule has been submitted to the Office of Management and Budget for
review under Section 3507(d) of the Paperwork Reduction Act of 1995, 44
U.S.C. 3507(d). Comments are solicited on the Commission's need for
this information, whether the information will have practical utility,
the accuracy of the provided burden estimates, ways to enhance the
quality, utility, and clarity of the information to be collected, and
any suggested methods for minimizing respondents' burden, including the
use of automated information techniques.
Estimated Annual Burden:
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No. of No. of Hours per Total annual
Data collection respondents responses response hours
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FERC-592.................................... 74 1 5 370
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Total Annual Hours for Collection (Reporting + Recordkeeping, (if
appropriate))=370.
Information Collection costs: The Commission seeks comments on the
costs to comply with these requirements. It has projected the average
annualized cost per respondent to be the following:
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Annualized Capital/Startup Costs........................... ...........
Annualized Costs (Operations & Maintenance)................ $19,492
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Total Annualized Costs............................... $19,492
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All pipelines are currently required to maintain web sites and so
the Commission estimates that the burden to post the information will
be minimal once it has been assembled.
The Office of Management and Budget's (OMB's) regulations require
OMB to approve certain information collection requirements imposed by
agency rule. The Commission is submitting notification of this proposed
rule to OMB.
Title: FERC-592, Marketing Affiliates of Interstate Pipelines.
Action: Proposed collections.
OMB Control No: 1902-0157.
Respondents: Business or other for profit, including small
business.
Frequency of Responses: On occasion.
Necessity of the information: The proposed rule revises the
requirements contained in 18 CFR 161.3. Pipelines will be required to
post their affiliates' names and addresses on the Internet, update this
information within three business days of whenever a change takes
place, and state the date the information was last updated. These
proposed revisions will not change the format of what is currently
reported to the Commission. However, the revisions of Sec. 161.3 will
require additional information that must be posted on the Internet.
The posting of affiliate information on the Internet meets the
Commission's need for access to up-to-date information to monitor self-
implementing activities of the pipelines to ensure that transportation
services are being carried out in non-discriminatory manner and can
also respond to the increased pace of changes in the energy marketplace
without unduly burdening market participants. The information is
maintained by natural gas pipeline companies involved in transactions
with marketing affiliates and their functional equivalents. The
Commission through its monitoring activities, collects and analyzes
data for use in making decisions. The monitoring activities focus on
areas affecting competition such as: preferential treatment to
affiliates; cross-subsidization and cost shifting between customers and
affiliates; fair access to information; unfair activities and
noncompliance with the Commission's regulations.
Additionally, the information is also used by nonaffiliated
shippers or others (such as state commissions) to determine whether
they have been harmed by affiliate preference and, in some cases, to
prepare evidence for formal proceedings following the filing of a
complaint.
These data are required to carry out the Commission's policies in
accordance with the general authority in Sections 311, 501, and 504 of
the Natural Gas Policy Act of 1978 (NGPA) (15 U.S.C. 3301-3432) and
Sections 4, 5, 7, 8, 10, 14, 16 and 20 of the Natural Gas Act (NGA) (15
U.S.C. 717-717w). The information required is mandatory.
Internal Review: The Commission has reviewed the requirements
pertaining to the standards of conduct for interstate natural gas
pipeline companies and their marketing affiliates or brokering
companies and determined that the proposed revisions are necessary to
ensure nondiscriminatory access to the national pipeline grid through
the investigation of complaints and allegations of abuses. Requiring
such information assists the Commission to protect customers from
excessive transportation rates and service discrimination. As pipelines
are permitted to implement more nontraditional forms of pricing and
service, the Commission will monitor the industry to ensure the
pipelines are not being preferential or unduly discriminatory, charging
unjust and unreasonable rates, or providing services that are
inadequate or undesirable.
These requirements conform to the Commission's plan for efficient
information collection, communication, and management through the
advancement of information technology 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 estimate
associated with the information requirement.
Interested persons may obtain information on the reporting
requirements by contacting the following: Federal Energy Regulatory
Commission, 88 First Street, NE, Washington, DC 20426 [Attention:
Michael Miller, Division of Information Services, Phone: (202) 208-
1415, fax: (202) 273-0873, email:michael.miller@ferc.fed.us]
For submitting comments concerning the collection of information(s)
and the associated burden estimate(s), please send your comments to the
contact listed above and to the Office of Management and Budget, Office
of Information and Regulatory Affairs, Washington, DC 20503 [Attention:
Desk Officer for the Federal Energy Regulatory Commission, phone: (202)
395-3087, fax: (202) 395-7285]
VII. Comment Procedures
The Commission invites interested persons to submit written
comments or other information concerning this proposed rulemaking. All
comments in response to this notice must be filed with the Office of
the Secretary, Federal Energy Regulatory Commission, 888 First Street,
NE., Washington, DC 20426, and should refer to Docket No. RM98-7-000.
An original and fourteen (14) copies of such comments should be filed
with the Commission on or before June 18, 1998. All comments will be
placed in the Commission's public files and will be available for
inspection in the Commission's public reference room at 888 First
Street, NE, Washington, DC, 20426, during business hours. Additionally,
comments can be viewed and printed remotely via the Internet through
FERC's Homepage using the RIMS link or the Energy Information Online
icon. User assistance is available at 202-208-2222, or by E-mail to
[email protected]
List of Subjects in 18 CFR Part 161
Natural gas, Reporting and recordkeeping requirements.
By direction of the Commission. Commissioner Massey concurred
with a separate statement attached.
Linwood A. Watson, Jr.,
Acting Secretary.
In consideration of the foregoing, the Commission proposes to amend
Part 161, Chapter I, Title 18 of the Code of Federal Regulations, as
set forth below.
PART 161--STANDARDS OF CONDUCT FOR INTERSTATE PIPELINES WITH
MARKETING AFFILIATES
1. The authority citation for Part 161 continues to read as
follows:
Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352.
2. In Section 161.3, paragraph (l) is added to read as follows:
Sec. 161.3 Standards of conduct.
* * * * *
[[Page 27529]]
(1) A pipeline must post the names and addresses of its marketing
affiliates on its web site on the public Internet and update the
information within three business days of any change. A pipeline must
also state the date the information was last updated. Postings must
conform with the requirements of Sec. 284.10 of this chapter.
(Issued May 13, 1998)
MASSEY, Commissioner, concurring:
The general proposal in today's Notice of Proposed Rulemaking has
my full support. A requirement that pipelines report on their Internet
websites the names of their marketing affiliates or changes in the
status of their marketing affiliates is necessary to provide the
Commission and the industry with information that may otherwise be
unavailable in today's rapidly changing market environment.
The proposal raises one question, however, which I believe should
be pursued further. Is the proposed requirement that pipelines update
information about their affiliates within three business days of a
change in status sufficient to meet the needs of the Commission and the
industry at large?
I would prefer a requirement for reporting within 24 hours, and
want to make three points related to this issue. First, the NOPR offers
no justification for the three day time period. Second, it is widely
known that with today's technology, updating information of this nature
on a pipeline website is not burdensome. Therefore, the ability to add
vital information in a shorter time frame would not be problematic.
Finally, the Commission has required companies in the other industries
we regulate to make similar updates in a 24-hour time period. For
example, the Commission's regulations require electric transmission
providers to report to the Commission and on the OASIS each emergency
that results in any deviation from the Commission's standards of
conduct within 24 hours of the deviation.\1\ Pipelines are required to
post discounts given to their affiliates within 24 hours of the time at
which gas first flows.\2\ Hydroelectric power licensees have agreed to
reporting deviations from state water quality standards within 24
hours.\3\ As the industry contemplates the Commission's proposal, I
would welcome comment on this issue.
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\1\ 18 CFR 37.4(a)(2) (1997).
\2\ 18 CFR 161.3(h)(2) (1997).
\3\ Wisconsin Electric Power Company, 80 FERC para. 62,215
(1997).
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William L. Massey,
Commissioner.
[FR Doc. 98-13293 Filed 5-18-98; 8:45 am]
BILLING CODE 6717-01-P
