[Federal Register Volume 63, Number 141 (Thursday, July 23, 1998)]
[Rules and Regulations]
[Pages 39509-39514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19368]
[[Page 39509]]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 284
[Docket No. RM96-1-008; Order No. 587-H]
Standards for Business Practices of Interstate Natural Gas
Pipelines
Issued: July 15, 1998.
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Final Rule and Order Establishing Implementation Date.
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SUMMARY: The Federal Energy Regulatory Commission (Commission) is
amending its regulations governing standards for conducting business
practices and electronic communication with interstate natural gas
pipelines. The Commission is incorporating by reference the standards
relating to intra-day nominations promulgated March 12, 1998 by the Gas
Industry Standards Board (GISB). The Commission also is establishing
the implementation date for intra-day nomination regulations adopted in
Order No. 587-G published in the Federal Register April 23, 1998.
DATES: Effective Date: The rule is effective August 24, 1998.
Incorporation by Reference: The incorporation by reference of
certain publications listed in the rule is approved by the Director of
the Federal Register as of August 24, 1998.
Implementation Date: Pipelines are to implement the intra-day
nomination regulations adopted in this rule and in Order No. 587-G
published at 63 FR 20072 by November 2, 1998.
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., 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 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, N.E., Room 2A, Washington, D.C. 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, N.E., Washington, D.C. 20426.
Final Rule Adopting Standards for Intra-Day Nominations and Order
Establishing Implementation Date
Before Commissioners: James J. Hoecker, Chairman; Vicky A.
Bailey, William L. Massey, Linda Breathitt, and Curt Hebert, Jr.
The Federal Energy Regulatory Commission (Commission) is amending
Sec. 284.10 of its regulations to incorporate by reference the most
recent standards dealing with intra-day nominations and nomination and
scheduling procedures promulgated by the Gas Industry Standards Board
(GISB) on March 12, 1998. The Commission adopted regulations regarding
intra-day nominations in Order No. 587-G 1
(Sec. 284.10(c)(1)(i)), but deferred implementation of these
regulations until GISB had considered, and the Commission had adopted,
implementing standards. This rule adopts the necessary implementation
standards, and, therefore, Commission is establishing November 2, 1998
as the date for pipeline implementation of the requirements of this
rule and the requirements of Sec. 284.10(c)(1)(i).
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\1\ Standards For Business Practices Of Interstate Natural Gas
Pipelines, Order No. 587-G, 63 FR 20072 (Apr. 23, 1998), III FERC
Stats. & Regs. Regulations Preambles para. 31,062 (Apr. 16, 1998).
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1. Background
In Order Nos. 587, 587-B, and 587-C 2 the Commission
adopted regulations to standardize the business practices and
communication methodologies of interstate pipelines in order to create
a more integrated and efficient pipeline grid. In those orders, the
Commission incorporated by reference consensus standards developed by
GISB, a private, consensus standards developer composed of members from
all segments of the natural gas industry.
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\2\ 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).
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In Order No. 587, the Commission adopted a standard requiring
pipelines to permit shippers to make at least one intra-day nomination
per day.3 An intra-day nomination is a nomination submitted
after the initial nomination deadline at 11:30 a.m. to change a
shipper's scheduled quantities for the next gas day.4
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\3\ 18 CFR 284.10(b)(1)(i) (1997), Nominations Related Standards
1.3.10.
\4\ 18 CFR 284.10(b)(1)(i) (1997), Nominations Related Standards
1.2.4.
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In Order No. 587-C, the Commission did not adopt additional
standards approved by GISB concerning intra-day nominations, because
the standards did not clearly outline the pipelines' obligations. The
Commission further noted that pipelines had implemented GISB's previous
intra-day standards in divergent ways, for instance, by establishing
different times for submission of intra-day nominations. These
differences prevented shippers from coordinating their intra-day
nominations across the pipeline grid. The Commission gave GISB and the
industry until September 1, 1997, to propose additional standards that
would create the needed uniformity in intra-day procedures.
[[Page 39510]]
On September 2, 1997, GISB filed a report detailing its progress in
reaching consensus on the intra-day standards. While GISB reported
making significant progress in developing the standards, it highlighted
conflicts between its members that were inhibiting completion of the
standards. The disagreements concerned the circumstances under which
intra-day nominations by shippers holding firm capacity should be given
scheduling priority over previously scheduled interruptible service.
In Order No. 587-G, the Commission resolved these conflicts. It
issued a regulation requiring pipelines to accord an intra-day
nomination submitted by a firm shipper scheduling priority over
nominated and scheduled volumes for interruptible shippers.5
The Commission, however, deferred implementation of this requirement
until GISB had developed, and the Commission had adopted, standards to
implement the regulation.
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\5\ Rehearing of Order No. 587-G is pending.
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On April 16, 1998, the Commission issued a Notice of Proposed
Rulemaking (NOPR),6 proposing to adopt standards governing
intra-day nominations adopted by a consensus of the GISB membership on
March 12, 1998.7 The proposed date for implementing these
standards was September 1, 1998.
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\6\ Standards for Business Practices of Interstate Natural Gas
Pipelines, Notice of Proposed Rulemaking, 63 FR 19861 (Apr. 22,
1998), IV FERC Stats. & Regs. Proposed Regulations para. 32,529
(Apr. 16, 1998).
\7\ The new standards are 1.1.17 through 1.1.19, 1.2.8 through
1.2.12, 1.3.39 through 1.3.44. In addition, modifications were made
to existing standards. Standards 1.2.7, 1.3.10, and 1.3.12 were
deleted. Standards 1.3.2, 1.3.20, 1.3.22, and 1.3.32 were revised.
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The standards establish three synchronization times for shippers to
coordinate their intra-day nominations: 6 p.m. to take effect the next
gas day; and 10 a.m. and 5 p.m. to take effect on the same gas day.
Under the standards, the 10 a.m. intra-day nomination would become
effective, if confirmed, at 5 p.m. the same day, with any bumping
notice to interruptible shippers given by 2 p.m. The 5 p.m. intra-day
nomination would become effective, if confirmed, at 9 p.m. the same
day. No bumping is allowed at the 5 p.m. nomination. The 6 p.m. intra-
day nomination would become effective, if confirmed, at 9 a.m. the next
morning if all parties can be scheduled and bumping notice for the 6
p.m. intra-day nomination would be given by 10 p.m. GISB, however, did
not establish the time at which a bumping intra-day nomination would
become effective, leaving that determination for the Commission. The
following chart illustrates the nomination timeline (with a blank for
the effective time of a bumping 6 p.m. nomination).8
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\8\ The term ``TSP'' in the chart stands for transportation
service provider.
[[Page 39511]]
[GRAPHIC] [TIFF OMITTED] TR23JY98.001
The standards also establish protocols for pipeline processing of
nominations and confirmations for both regular and intra-day
nominations.
As discussed above, the standards do not establish the time at
which a firm intra-day nomination submitted on the day prior to gas
flow (6 p.m.), which bumps interruptible service, would take effect.
The standards leave that time to be determined by the Commission. The
Commission already has resolved this issue in Order No. 587-G, adopting
a regulation requiring that an intra-day nomination submitted on the
day prior to gas flow will take effect at the start of the gas day, 9
a.m. central clock time (CCT).9
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\9\ 18 CFR 284.10(c)(1)(i)(B). Central clock time adjusts for
daylight savings time.
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Comments on the NOPR were filed by American Gas Association (AGA),
Enron Interstate Pipelines (Enron), Natural Gas Clearinghouse (NGC),
Natural Gas Supply Association (NGSA), ProLiance Energy, LLC
(ProLiance), TransCapacity Limited Partnership (TransCapacity), and
Williston Basin Interstate Pipeline Company (Williston Basin).
2. Discussion
The Commission is incorporating the GISB intra-day nomination
standards into its regulations. As the Commission found in Order No.
587, adoption of consensus standards is appropriate because the
consensus process helps ensure the reasonableness of the standards by
requiring that the standards draw support from a broad spectrum of all
segments of the industry.10 Moreover, since the industry
itself has to conduct business under these standards, the standards
should reflect those business practices that have the widest possible
support. Section 12(d) of the National Technology Transfer and
Advancement Act (NTT&AA) of 1995 requires federal agencies to, whenever
possible, use technical standards developed by voluntary consensus
standards
[[Page 39512]]
organizations, like GISB, to carry out policy objectives or
activities.11
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\10\ Order No. 587, 61 FR at 39057, GISB's III FERC Stats. &
Regs. Regulations Preambles at 30,059-60. GISB's consensus process
requires a super-majority vote of 17 out of 25 members with support
from at least two members from each of the five industry segments--
interstate pipelines, local distribution companies, gas producers,
end-users, and services (including marketers and computer service
providers). For final approval, 67% of GISB's general membership
must ratify the standards.
\11\ Pub. L. 104-113, section 12(d), 110 Stat. 775 (1996), 15
U.S.C. 272 note (1997).
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Adoption of these standards will further the Commission's policy of
adopting regulations that create a more integrated and efficient
interstate pipeline grid. The adoption of these standards will expand
from one to three the number of intra-day opportunities to which
shippers are entitled and will, therefore, provide them with greater
opportunities to change their nominated quantities to better accord
with changes in weather or other market circumstances. By creating
times at which shippers can synchronize their intra-day nominations
across pipelines, these standards, together with the Commission's
regulations adopted in Order No. 587-G, will create the uniform process
shippers need to coordinate their intra-day nominations across the
pipeline grid. The standards governing nomination and confirmation
procedures, further, should help create a more reliable nomination
process in which pipelines will receive accurate information, so they
can schedule nominations and intra-day nominations that their systems
can accommodate.
The commenters all support adoption of the GISB standards, although
some suggest modifications or clarifications. Enron requests that the
Commission extend the implementation date from September 1, 1998, until
November 1, 1998, to give those pipelines which currently do not permit
firm intra-day nominations to bump interruptible nominations sufficient
time to reprogram their computers to accommodate bumping. To permit
pipelines to implement these standards with a minimum of errors, the
Commission will defer the implementation date until November 2, 1998.
This extension still will provide shippers with the additional intra-
day flexibility accorded by the standards in time for the winter
heating season.
NGC and NGSA request clarification of revised standard 1.3.32 which
provides that:
For services that provide for intraday nominations and
scheduling, there is no limitation as to the number of intraday
nominations (line items as per GISB Standard 1.2.1) which a service
requester may submit at any one standard nomination cycle or in
total across all standard nomination cycles. Transportation Service
Providers may (for an interim period expiring on April 1, 1999)
limit Service Requesters to one transmittal of nominations per
standard intraday nomination cycle, (excluding corrections of errors
identified in the Quick Response).
They contend that the sentence permitting pipelines to limit shippers'
intra-day nominations prior to April 1, 1999, to one nomination per
intra-day nomination cycle should be interpreted to permit one intra-
day nomination per contract.
The requested clarification comports with Commission policy. Prior
to this change, Commission regulations required that the pipelines
provide shippers with only one intra-day nomination
opportunity.12 The Commission's policy has been that the
single intra-day nomination opportunity is available for each contract
between the shipper and the pipeline and that the shipper can use this
opportunity to request changes at all receipt and delivery
points.13
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\12\ Former 18 CFR 284.10(b)(1)(i) (1997), Nominations Related
Standards 1.3.10 (1997).
\13\ See Tennessee Gas Pipeline Company, 78 FERC para. 61,007,
at 61,019-20 (1997); Texas Eastern Transmission Corporation, 77 FERC
para. 61,175, at 61,649 (1996).
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NGC and NGSA further point out that the regulations provide for
pipelines to notify interruptible shippers that they are being bumped,
but that the regulations do not specify the form of notice. They
maintain that notice limited to the scheduled quantities document is
not sufficient,14 because gas producers would have to
monitor pipeline web sites until 10 p.m. at night to make sure they
receive the notice. They argue that the bumping notice should be
provided by telephone or facsimile or, at least, by Internet E-mail or
direct Internet notification to the shipper's URL address, the methods
the Commission chose for pipeline notification of operational flow
orders (OFOs) in Order No. 587-G.15
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\14\ The scheduled quantities document is a electronic
transmittal from the pipeline showing the quantity of gas scheduled.
18 CFR 284.10(b)(1)(i) (1997).
\15\ 18 CFR 284.10(c)(3)(vi).
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The Commission finds this request reasonable and will expect that,
in addition to notification through the scheduled quantities statement,
pipelines should provide direct notice of bumping using Internet E-mail
or direct notification to a shipper's Internet URL address when they
comply with the requirement in Order No. 587-G. Until that time, the
pipelines should provide notice of bumping in the same manner they
currently provide notice of OFOs.
TransCapacity and NGC submitted comments that are not germane to
this rulemaking, but instead relate to issues resolved in Order No.
587-G. TransCapacity requests that the Commission make clear that
secondary firm transportation once scheduled has priority over primary
firm intra-day nominations. As the Commission found in Order No. 587-G,
its regulations provide only that firm intra-day nominations have
priority over nominated and scheduled interruptible service. The
Commission did not revise or change current pipeline tariffs with
respect to the scheduling priority of firm primary and firm secondary
transportation.16
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\16\ Order No. 587-G, 63 FR at 20079; III FERC Stats. & Regs.
Regulations Preambles at 30,673-74.
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NGC contends that the Commission should revisit its determination
in Order No. 587-G that the 6 p.m. intra-day nomination should take
effect at 9 a.m. or, in the alternative, that shippers be given an
overnight rescheduling opportunity. These policy issues were resolved
in Order No. 587-G 17, which is pending rehearing. Such
issues are not appropriately raised with respect to the standards
adopted in this rule, which involve only the schedule for intra-day
nominations.
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\17\ 18 CFR 284.10(c)(1)(B) (intra-day nomination prior to gas
flow will take effect at 9 a.m. CCT); Order No. 587-G, 63 FR at
20079, III FERC Stats. & Regs. Regulations Preambles at 30,673
(Commission will not require overnight rescheduling opportunity).
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3. Implementation Schedule for Intra-Day Nominations
In Order No. 587-G, the Commission deferred implementation of its
regulations relating to intra-day nominations, Sec. 284.10(c)(1)(i),
until GISB developed, and the Commission adopted, implementing
standards. This order adopts the necessary implementation standards,
and the Commission is establishing a November 2, 1998 implementation
date for the standards adopted in this order and Sec. 284.10(c)(1)(i)
of the Commission regulations. Pipelines must file revised tariff
sheets to implement these regulations not more than 60 and not less
than 30 days prior to the November 2, 1998 implementation date.
4. 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.
[[Page 39513]]
The collections of information related to the subject of this Final
Rule fall under FERC-545, Gas Pipeline Rates: Rate Change (Non-Formal)
(OMB Control No. 1902-0154) and FERC-549-C, Standards for Business
Practices of Interstate Natural Gas Pipelines (OMB Control No. 1902-
0174). The following estimates of burden are related only to this rule
and include only the costs of complying with GISB's new and revised
standards relating to intra-day nominations. The burden estimates are
primarily related to start-up and will not be on-going costs.
Public Reporting Burden: (Estimated Annual Burden).
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Number of Estimated
Data collection Number of responses per burden hours Total annual
respondents respondent per response hours
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FERC-549C....................................... 93 1 45 4,185
FERC-545........................................ 93 1 47 4,371
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The total annual hours for collection (including recordkeeping) is
estimated to be 8,556. The average annualized cost for all 93
respondents is projected to be the following:
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FERC-549C FERC-545 Totals
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Annualized Capital/Startup Costs................................ $220,252 $230,041 $450,293
Annualized Costs (Operations & Maintenance)..................... 0 0 0
Total Annualized Costs...................................... $220,252 $230,041 $450,293
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The Commission regulations adopted in this order are necessary to
further the process begun in Order No. 587 of standardizing business
practices and electronic communications with interstate pipelines.
Adoption of these regulations will provide shippers with increased
options to change their scheduled gas quantities to reflect weather and
other changed conditions and enable shippers to more efficiently
transact business across multiple pipelines.
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. This information also will
be retained for a three year period. The implementation of these data
requirements will help the Commission carry out its responsibilities
under the Natural Gas Act and conforms to the Commission's plan for
efficient information collection, communication, and management within
the natural gas industry.
Interested persons may obtain information on the reporting
requirements by contacting the Federal Energy Regulatory Commission,
888 First Street, N.E., 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].
5. 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.\18\ The Commission
has categorically excluded certain actions from these requirements as
not having a significant effect on the human environment.\19\ The
actions taken here fall 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.\20\ Therefore, an environmental assessment
is unnecessary and has not been prepared in this rulemaking.
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\18\ Order No. 486, Regulations Implementing the National
Environment Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. &
Regs. Preambles 1986-1990 para. 30,783 (1987).
\19\ 18 CFR 380.4.
\20\ See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), 380.4(a)(27).
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6. Regulatory Flexibility Act Certification
The Regulatory Flexibility Act of 1980 (RFA) \21\ 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 here 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 proposed herein will not have a significant adverse impact
on a substantial number of small entities.
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\21\ 5 U.S.C. 601-612.
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7. Effective Date
These regulations become effective August 24, 1998. The Commission
has concluded, 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 251 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.
David P. Boergers,
Acting 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 section 284.10, paragraph (b)(1)(i) is revised to read as
follows:
Sec. 284.10 Standards for Pipeline Business Operations and
Communications.
* * * * *
(b) * * *
(1) * * *
[[Page 39514]]
(i) Nominations Related Standards (Version 1.2, July 31, 1997),
with the addition of standards 1.1.17 through 1.1.19, 1.2.8 through
1.2.12, 1.3.39 through 1.3.44 (as approved March 12, 1998), the
modification of standards 1.3.2, 1.3.20, 1.3.22, 1.3.32 (as approved
March 12, 1998), and the deletion of standards 1.2.7, 1.3.10, and
1.3.12;
* * * * *
[FR Doc. 98-19368 Filed 7-22-98; 8:45 am]
BILLING CODE 6717-01-P
