[Federal Register Volume 59, Number 122 (Monday, June 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15372]


[[Page Unknown]]

[Federal Register: June 27, 1994]


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DEPARTMENT OF ENERGY
18 CFR Parts 161, 250 and 284

[Docket No. RM94-6-000 and Order No. 566]

 

Standards of Conduct and Reporting Requirements for 
Transportation and Affiliate Transactions

    Issued June 17, 1994.

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
revising its regulations governing standards of conduct and reporting 
requirements for transportation and affiliate transactions by natural 
gas pipelines. The Commission is reducing the reporting requirements 
significantly based on changes in the way pipelines allocate capacity 
after implementation of Order No. 636 and the Commission's experience 
with the reporting requirements.

EFFECTIVE DATE: The rule will become effective August 1, 1994.

ADDRESSES: Federal Energy Regulatory Commission, 825 North Capitol 
Street NE., Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT: Michael Goldenberg, Federal Energy 
Regulatory Commission, 825 North Capitol Street NE., Washington, DC 
20426, (202) 208-2294.

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 Room 3104, 941 North 
Capitol 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. To access CIPS, set your communications 
software to use 300, 1200 or 2400 bps, full duplex, no parity, 8 data 
bits, and 1 stop bit. CIPS can also be accessed at 9600 bps by dialing 
(202) 208-1781. The full text of this notice will be available on CIPS 
for 30 days from the date of issuance. The complete text on diskette in 
WordPerfect format may also be purchased from the Commission's copy 
contractor, La Dorn Systems Corporation, also located in Room 3104, 941 
North Capitol Street NE., Washington DC 20426.

Table of Contents

I. Introduction
II. Reporting Requirements
III. Background
IV. Summary of the Final Rule
V. Overview of the Standards of Conduct and Reporting Requirements
VI. Standards of Conduct
    A. Definitions
    B. Information Disclosure Requirements
    1. Standard E--Disclosure of Information Received From Non-
affiliates
    2. Standard F--Disclosure of Transportation-Related Information
    C. Standard H--Tieing Gas Subject to Take-Or-Pay Relief
    D. Standard I (New Standard H)--Affiliate Discounts 
Contemporaneously Disclosed To Similarly Situated Shippers
    1. Retention of Standard H
    2. Revision of the Standard to Eliminate Duplicative Posting 
Requirements
    3. Specific Issues
    a. Affiliate's Role in a Transportation Transaction
    b. Inclusion of Receipt Points
    c. Disclosure of Non-Affiliate Discounts
    E. Standard G & Standard K (New Standard J)--Separation of 
Operating Employees and Books of Account
VII. Tariff Requirements
    A. Shared Operating Personnel
    B. Request For Service Information
    C. Availability And Pricing Of Transportation Services
VIII. Transportation Information
    A. Capacity Allocation Log
    B. Discount Information For Affiliate and Non-Affiliate 
Transactions
IX. EBB Access and Archiving Requirements
X. Miscellaneous Issues
    A. Reporting Of Affiliate Discounts Under Part 284
    B. Relation Of The Marketing Affiliate Regulations Of This Rule 
To Tariff Requirements Addressing Similar Problems
    C. Applicability Of The Marketing Affiliate Regulations Of This 
Rule To Permanent Releases Of Capacity
    D. EBB Posting Of Information Constitutes A Filing
    E. Posting Of Pipeline Tariffs
    F. Relationship To The Commission's EBB Standards Proceeding
XI. Environmental Analysis
XII. Regulatory Flexibility Act Certification
XIII. Information Collection Requirement
XIV. Effective Date

Regulatory Text

Appendix A--Parties Filing Comments On The Notice Of Proposed 
Rulemaking
Appendix B--FERC Form No. 592

I. Introduction

    In the matter of: Before Commissioners: Elizabeth Anne Moler, 
Chair; Vicky A. Bailey, James J. Hoecker, William L. Massey, and 
Donald F. Santa, Jr.

    The Federal Energy Regulatory Commission (Commission) is amending 
its regulations governing Standards of Conduct and reporting 
requirements for transportation and affiliate transactions. The 
Commission is significantly reducing its reporting requirements based 
on changes in the way pipelines will be allocating capacity after 
implementation of Order No. 6361 and the Commission's experience 
with the reporting requirements.
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    \1\Pipeline Service Obligations and Revisions to Regulations 
Governing Self-Implementing Transportation; and Regulation of 
Natural Gas Pipelines After Partial Wellhead Decontrol, 57 FR 13267 
(Apr. 16, 1992), III FERC Stats. & Regs. Preambles  30,939 (Apr. 8, 
1992), order on reh'g, Order No. 636-A, 57 FR 36128 (Aug. 12, 1992), 
III FERC Stats. & Regs. Preambles  30,950 (Aug. 3, 1992), order on 
reh'g, Order No. 636-B, 57 FR 57911 (Dec. 8, 1992), 61 FERC  61,272 
(1992), appeal re-docketed sub nom., Atlanta Gas Light Company and 
Chattanooga Gas Company, et al. v. FERC, No. 94-1171 (D.C. Cir. May 
27, 1994).
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II. Reporting Requirements

    The Commission estimates the public reporting burden for this 
collection of information under the final rule to average 60 hours per 
respondent, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information. In lieu of 
being physically filed with the Commission on a periodic basis as a 
``response'' or ``filing'', the data will be posted on pipeline 
Electronic Bulletin Boards (EBBs), established and maintained by the 
pipeline respondents pursuant to Order No. 636, and collected under 
FERC-592, Marketing Affiliates of Interstate Pipelines to be provided 
to the Commission upon request. The annual reporting burden for some 61 
respondents under the rule is estimated to total approximately 3,500 
hours.
    Because the rule provides for fewer information items, eliminates 
regular, periodic filings, and requires certain information to be 
posted or made available upon request in text format, the burden 
estimate for FERC-592 in the Final Rule represents a burden reduction 
of about 70 hours per respondent--or a total reduction of about 4,300 
hours. The current annual reporting burden attributable to the FERC-592 
information collection is 7,881.2 hours. A copy of this final rule is 
being provided to the Office of Management and Budget (OMB).
    Interested persons may send comments regarding the burden estimates 
or any other aspect of this collection of information, including 
suggestions for further reductions of this burden, to the Federal 
Energy Regulatory Commission, 941 North Capitol Street, N.E., 
Washington, D.C. 20426 [Attention: Michael Miller, Information Services 
Division, (202) 208-1415, FAX (202) 208-2425]. Comments on the 
requirements of this rule may also be sent to the Office of Information 
and Regulatory Affairs of OMB, Washington, D.C. 20503 [Attention: Desk 
Officer for Federal Energy Regulatory Commission (202) 395-6880].

III. Background

    The Commission, in Order No. 497,2 issued a rule intended to 
prevent pipelines from providing preferential treatment to their 
marketing or brokering affiliates. The rule adopted Standards of 
Conduct (codified at Part 161 of the Commission's regulations)3 
and tariff and reporting requirements (codified in Sec. 250.16)4 
The Standards of Conduct establish the principles applicable to 
relationships between pipelines and their affiliates. In general, they 
provide that the pipeline cannot favor affiliates with information or 
transportation discounts not available to non-affiliates. The tariff 
provisions require pipelines to include in their tariffs a list of 
operating personnel shared with affiliates, the information and format 
for transportation service requests, the procedures used to resolve 
complaints, the procedures used to inform shippers about the 
availability and pricing of transportation services.
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    \2\Inquiry Into Alleged Anticompetitive Practices Related to 
Marketing Affiliates of Interstate Pipelines, Order No. 497, 53 FR 
22139 (June 14, 1988), FERC Stats. & Regs. [Regulations Preambles 
1986-1990]  30,820 (1988), order on rehearing, Order No. 497-A, 54 
FR 52781 (Dec. 22, 1989), FERC Stats. & Regs. [Regulations Preambles 
1986-1990]  30,868 (1989), order extending sunset date, Order No. 
497-B, 55 FR 53291 (Dec. 28, 1990), FERC Stats. & Regs. [Regulations 
Preambles 1986-1990]  30,908 (1990), order extending sunset date 
and amending final rule, Order No. 497-C, 57 FR 9 (Jan. 2, 1992), 
III FERC Stats. & Regs  30,934 (1991), reh'g denied, 57 FR 5815, 58 
FERC  61,139 (1992), aff'd in part and remanded in part, Tenneco 
Gas v. Federal Energy Regulatory Commission, 969 F.2d 1187 (D.C. 
Cir. 1992), order on remand, Order No. 497-D, 57 FR 58978 (Dec. 14, 
1992), III FERC Stats. & Regs.  30,958 (1992), order on reh'g and 
extending sunset date, Order No. 497-E, 59 F.R. 243 (Jan. 4, 1994), 
III FERC Stats. & Regs.  30,987 (Dec. 23, 1994), order on reh'g, 
Order No. 497-F, 59 FR 15336 (Apr. 1, 1994), 66 FERC  61,347 
(1994).
    \3\18 CFR Part 161.
    \4\18 CFR 250.16.
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    The reporting requirements require pipelines to provide information 
relating to transportation transactions with affiliates. The pipelines 
must file FERC Form No. 592, a log containing information relating to 
requests for transportation service by affiliated marketers and to 
discounts provided to affiliates. The regulations also require the 
pipelines to maintain the same information for non-affiliated shippers 
and to provide that information to the Commission upon request.
    The Commission imposed a sunset provision requiring a reevaluation 
of the requirements of the rule within one year to determine whether 
increased competition in transportation had mitigated the concerns 
about affiliate abuse. The Commission has extended the sunset provision 
on several occasions, most recently extending it until June 30, 
1994.5
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    \5\Order No. 497-E, III FERC Stats. & Regs. Preambles  30,987.
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    In Order No. 636, the Commission created a new operating 
environment for interstate pipelines and shippers by requiring 
pipelines to unbundle their sale of gas from their transportation 
service and by implementing changes in the terms and conditions for 
providing transportation service. One of the principal changes 
introduced by Order No. 636 was the initiation of capacity release 
mechanisms through which firm shippers can release their firm 
transportation capacity, including storage capacity, to others wanting 
to obtain the capacity. The Commission also required that pipelines 
establish EBBs to provide information about available firm and 
interruptible capacity on the pipeline, including the firm capacity 
available through capacity release.6
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    \6\Secs. 284.8(b)(4); 284.9(b)(4). The Commission also has 
issued Order No. 563 promulgating standards governing the methods by 
which pipelines will provide information about available capacity 
through their EBBs. Standards For Electronic Bulletin Boards 
Required Under Part 284 of the Commission's Regulations, Order No. 
563, 59 FR 516 (Jan. 5, 1994), III FERC Stats. & Regs. Preambles  
30,988 (Dec. 23, 1993), order on reh'g, Order No. 563-A, 59 FR 23624 
(May 6, 1994), III FERC Stats. & Regs. Preambles  30,994 (May 2, 
1994).
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    The Commission previously has addressed the effect of EBBs and 
capacity release on the Order No. 497 requirements. In Order No. 497-D, 
the Commission eliminated the requirement that pipelines file the Form 
No. 592 containing the affiliated transportation log with the 
Commission, requiring instead that they provide this information on 
their EBBs.7 The Commission also determined that Order No. 497 
does not apply to temporary capacity releases, because such releases 
are not a request for transportation to the pipeline.8 The 
releasing shipper, not the pipeline, controls and makes the 
determination to release capacity; the pipeline merely facilitates the 
transaction.
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    \7\Order No. 497-D, III FERC Stats. & Regs. Preambles at 30,737.
    \8\Northwest Pipeline Corporation, 65 FERC  61,007 (1993). A 
temporary capacity release occurs when the releasing shipper retains 
its rights to the capacity when the release period ends. A permanent 
release ends the releasing shipper's rights and responsibilities 
under the contract and the contract is transferred to the 
replacement shipper.
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    With the implementation of Order No. 636 on virtually all 
pipelines, the Commission reevaluated its Order No. 497 requirements in 
light of the requirements of Order No. 636 as well as the Commission's 
experience under Order No. 497. On December 23, 1993, the Commission 
issued the Notice of Proposed Rulemaking (NOPR)9 in this docket in 
which the Commission proposed significant reductions in the Order No. 
497 reporting requirements as well as the elimination of one of the 
Standards of Conduct. The Commission, however, also invited comment on 
the need for, and retention of, the requirements as a whole. The 
Commission has received 22 comments on the NOPR.10
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    \9\Standards of Conduct and Reporting Requirements for 
Transportation and Affiliate Transactions, 59 FR 268 (Jan. 4, 1994), 
IV FERC Stats. & Regs. [Proposed Regulations]  32,504 (Dec. 23, 
1993).
    \1\0Appendix A lists all those filing comments with the 
abbreviations used for each.
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IV. Summary of the Final Rule

    The final rule revises both the Standards of Conduct and the 
reporting requirements in a number of respects. The Commission is 
reducing the pipelines' reporting burden by eliminating maintenance and 
posting requirements relating to requests for transportation service 
and implementing in their stead limited requirements that better 
comport with pipeline operations under Order No. 636.
    In particular, the regulations are being revised to reflect the 
data used by pipelines to allocate capacity among shippers when 
available capacity is not sufficient for the pipelines to honor all 
requests for service. For those pipelines whose tariffs rely upon 
contract information to allocate capacity, the pipelines will be 
required to maintain a log (for both affiliates and non-affiliates) of 
contract dates or other relevant information that they use to allocate 
capacity. Pipelines that allocate capacity on a pro rata basis (or use 
a method that does not rely on contract data) will not have to maintain 
the log. The affiliate log must be posted on the pipelines' EBBs, while 
the full log (for both affiliates and non-affiliates) must be provided 
to the Commission, within a reasonable time, upon request according to 
the specifications and format contained in Form No. 592.\11\
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    \11\Form No. 592 is attached as Appendix B and will not be 
published in the Federal Register.
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    The Commission also is coordinating its posting requirements for 
affiliate discounts to eliminate duplicative EBB postings. Current 
Sec. 250.16 requires the pipelines to post information about affiliate 
discounts on their EBBs. Current Standard of Conduct I requires 
pipelines to make any discount offered to an affiliate 
contemporaneously available to non-affiliates. In order for the 
pipelines to fulfill this obligation, the Commission has required that 
they make a contemporaneous posting on their EBBs of information about 
affiliate discounts, so that non-affiliates will be aware of the 
discount and can request a comparable discount if they believe they are 
similarly situated.\12\ To eliminate the posting of duplicative 
information, the Commission is incorporating a contemporaneous posting 
requirement for affiliate offers into former Standard I (new Standard 
H)\13\ and is deleting the similar requirement for posting affiliate 
discounts under Sec. 250.16. In effect, the Commission is not adding a 
new reporting requirement here. It is merely moving a current EBB 
posting requirement from Sec. 250.16 to new Standard H in order to 
eliminate duplicative postings.
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    \12\Colorado Interstate Gas Company, 65 FERC 61,264 at 62,224-
25 (1993).
    \13\The new designation of Standard H will be used throughout 
the order.
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    Section 250.16 also required pipelines to maintain discount 
information for both affiliate and non-affiliate transactions and 
provide this information to the Commission upon request. The Commission 
is retaining this maintenance requirement, because information on 
affiliate and non-affiliate transactions is needed for the Commission 
to monitor affiliate transactions and compare these transactions with 
non-affiliate transactions.\14\
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    \14\The information must be provided to the Commission according 
to the specifications and format contained in Form No. 592.
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    The current reporting requirements expire on June 30, 1994. Section 
553(d) of the Administrative Procedure Act (APA)\15\ generally requires 
that a rule is to be effective not less than 30 days after publication 
in the Federal Register unless good cause is shown to shorten the time 
period. Because the final rule continues some of the reporting 
requirements from the existing rule, a gap between the termination of 
the old requirements and the implementation of the new could result in 
a loss of information. Rather than requiring the pipelines to expedite 
implementation of the new regulations to prevent a regulatory gap, the 
Commission in a contemporaneous order, in Docket No. RM87-5-016, is 
extending the current reporting requirements for only one month, until 
July 31, 1994. The regulations adopted by this order will then go into 
effect on August 1, 1994.
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    \15\5 U.S.C. 553(d).
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    The Commission will first provide an overview of the Order No. 497 
requirements and address the general comments relating to retention of 
these provisions as a whole and will then address specific comments and 
issues regarding the Standards of Conduct, tariff requirements, and 
reporting requirements.

V. Overview of the Standards of Conduct and Reporting Requirements

    In the NOPR, the Commission stated that, as part of its continuing 
assessment of the Order No. 497 regulations, it would consider comments 
on the need to retain these requirements as a whole. Many pipeline 
commenters submit that all the Order No. 497 requirements should be 
removed as unnecessary and duplicative of existing prohibitions on 
undue discrimination.\16\ They maintain that six years after 
promulgation of the regulations, no pattern of abuse has been 
demonstrated.
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    \16\AER/MRT, CNG, Columbia, El Paso, Enron Pipelines, INGAA, K N 
Energy, KGPC, National, Panhandle Eastern Pipelines, Questar, WGM, 
WNG/Northwest.
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    They further contend that the potential for pipelines to provide 
preferential treatment to their affiliates has been virtually 
eliminated by the restructuring of pipeline operations pursuant to 
Order No. 636. They maintain that the unbundling of pipeline gas sales 
from transportation service has resulted in a truly competitive market 
in which all gas sellers will be able to compete on an even basis. They 
argue that the Commission's establishment of a mechanism permitting 
firm shippers to release capacity has eliminated the pipelines' 
monopoly over transportation service, so that the pipelines' ability to 
grant significant preferences to affiliates is reduced or eliminated. 
The capacity release mechanism, they maintain, creates an open auction 
for firm capacity in which the pipeline must award capacity to the 
highest bidder and so cannot favor its affiliate.\17\ They also assert 
that the ability of pipelines to favor affiliates with important 
transportation information has been undercut by the Commission's 
requirement that the most critical transportation information be 
disclosed publicly on pipeline EBBs. Moreover, if some potential for 
abuse remains, they contend the Commission's complaint process and 
enforcement staff provides adequate means to detect and prevent such 
abuse.
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    \17\They similarly contend that, under Order No. 636 provisions, 
pipelines cannot discriminate in awarding interruptible service 
because it must be awarded to the highest bidder.
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    These commenters also contend that the limited need, if any, for 
the regulations, must be juxtaposed with the anticompetitive effects of 
the regulations. They assert the regulations run counter to the 
Commission's goal of fostering competition because they have the effect 
of inhibiting beneficial communication between pipelines and 
affiliates, thereby limiting the ability of affiliates to compete in 
the marketplace.
    If the Commission decides to retain some or all of these 
requirements, these commenters recommend that the Commission provide a 
sunset date (generally one year) on which the regulations will expire. 
They assert that a sunset provision will ensure a comprehensive 
reevaluation of the requirements after further experience with capacity 
release.
    On the other side, Hadson and Indicated Parties support the 
continuation of the requirements, with some additions. Hadson asserts 
that the new deregulated gas environment will increase competitive 
pressures on all players, thereby increasing the incentive and 
likelihood that pipelines will try to enhance the competitive position 
of their affiliates and sales marketing divisions.
    Indicated Parties argue that the Commission should add a new 
provision prohibiting pipelines from providing a discount to an 
affiliate which is a supply area interruptible shipper.\18\ They assert 
that affiliates can use a pipeline's standing offer of a transportation 
discount to undercut a transaction negotiated by a non-affiliated 
competitor and that even contemporaneous disclosure of the discount 
does not provide the non-affiliate with sufficient time to save its 
transaction.
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    \18\Indicated Parties would not prohibit supply area discounts 
if the discount offer is posted on an EBB significantly prior to gas 
flow so all shippers can avail themselves of the discount. They also 
would not prohibit individual discounts to market area shippers.
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    At this time, the Commission is not convinced that pipelines' 
incentives or ability to favor affiliates has been so significantly 
reduced by Order No. 636 that these provisions can be removed 
entirely.\19\ While the unbundling of pipeline gas sales from 
transportation service does create a more competitive gas market, 
pipelines may still have an incentive to skew transportation 
transactions and information in such a way as to benefit affiliates. 
The requirement to post information on EBBs has not eliminated the 
pipelines' ability to favor their affiliates with information. By 
virtue of their position, pipelines may still be privy to important 
information regarding transportation capacity that they are not 
required to post on their EBBs.\20\ More important, at this stage, the 
Commission does not have sufficient experience with the new capacity 
release mechanism established by Order No. 636 to evaluate whether this 
mechanism will create such a competitive market for transportation 
capacity that pipeline preferences for affiliates will no longer be of 
significance.
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    \19\The absence of any significant complaints is not necessarily 
due to the pipelines' lack of incentive or inability to favor 
affiliates. It may, instead, be due to the pipelines' adherence to 
the Order No. 497 requirements and the public scrutiny of affiliate 
transactions provided by the regulations.
    \20\For example, pipelines will be aware of their own future 
plans, such as anticipated expansions, which might be valuable 
planning information for marketers. Without the Standards of 
Conduct, the pipelines could favor their affiliates by providing 
advance notice of their plans.
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    Nonetheless, the purposes of Order No. 497 can be achieved in a 
manner that is substantially less burdensome to pipelines. The 
Standards of Conduct and reporting requirements that remain establish a 
reasonable balance between preservation of the affiliates' ability to 
compete and the prevention of undue favoritism to the affiliates.
    As discussed later, the Commission is retaining all the Standards 
of Conduct (with the exception of Standard H). These Standards 
generally require pipelines to: refrain from disclosing non-affiliate 
information to affiliates; contemporaneously disclose to the market any 
general transportation information provided to affiliates; make any 
discount offered to an affiliate contemporaneously available to 
similarly situated non-affiliates by posting the information on the 
pipelines' EBB; and maintain separation of pipeline and affiliate 
operating personnel to the maximum extent practicable. These Standards 
of Conduct do not prevent pipelines from transacting business with 
their affiliates or communicating with or providing discounts to 
affiliates; they require only that the pipelines initiate common sense 
procedures to ensure that affiliates are not provided with information 
or discounts not available to others.
    Only two reporting requirements remain: the current requirement to 
maintain discount information for affiliates and non-affiliates and a 
revised requirement that some pipelines maintain and disclose the data 
used to allocate service on their systems. These requirements are much 
reduced from those under the current regulations and are the minimum 
needed to provide sufficient information about affiliate transactions 
for the Commission and shippers to monitor and police these 
transactions.
    The Commission will not prohibit supply area discounts to 
affiliates, as Indicated Parties suggest. Preventing all supply area 
discounts would seriously impede the ability of affiliates to compete 
by denying them justifiable discounts available to non-affiliates. New 
Standard H requires pipelines to make any such discounts 
contemporaneously available to other similarly situated shippers and 
this provision strikes the appropriate balance between protection of 
non-affiliates and maintenance of competition between affiliates and 
non-affiliates.
    The Commission is not proposing a sunset provision for these 
regulations, because a firm date, such as one year, may not provide a 
sufficient period for a comprehensive evaluation of the impact of Order 
No. 636 on the affiliate regulations. The Commission, however, is 
committed to reviewing these requirements as the industry obtains more 
experience operating in the restructured environment, and, in 
particular, is interested in the effect of capacity release on pipeline 
interruptible service.

VI. Standards of Conduct

    The Commission proposed to delete only one provision from the 
Standards of Conduct (Sec. 161.3 dealing with take-or-pay issues). 
Tenneco and KGPC contend that all Standards of Conduct provisions 
should be removed because the conduct they seek to prevent is already 
precluded by the requirements, in Secs. 284.8 and 284.9, that pipelines 
must not unduly discriminate in the provision of transportation 
service. Tenneco asserts the standards actually may send the wrong 
signal by suggesting that unduly discriminatory conduct not mentioned 
in the standards is somehow considered less egregious than conduct 
specifically mentioned. Many other commenters request that the 
Commission delete or modify specific provisions.
    The Commission continues to find that retention of most of the 
Standards of Conduct are necessary to prevent affiliate abuse, as will 
be discussed below with respect to specific provisions.

A. Definitions

    Indicated Parties suggest that the Commission include a new 
definition of marketing affiliate that makes clear it applies to 
pipelines' new merchant service established under Order No. 636 and a 
revision in the definition of transportation to make clear that 
transportation includes storage. Section 284.286 provides that 
pipelines' new merchant divisions are subject to the marketing 
affiliate regulations,\21\ and, therefore no new definition is needed. 
The Commission, however, will revise both Part 161 and Sec. 250.16 to 
cross-reference Sec. 284.286.\22\ The Commission also is revising 
Sec. 284.286 to conform to the changes being made in Sec. 161.3.\23\ 
Section 284.1 of the Commission's regulations defines transportation as 
including storage,\24\ and the Commission will revise the definition of 
transportation in Sec. 161.2 to parallel the Part 284 definition.\25\
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    \21\18 CFR 284.286; Order No. 636, III FERC Stats. & Regs. 
Preambles at 30,442.
    \22\The Commission also is revising Sec. 161.1 to correspond 
with the current Part 284 regulations by deleting the unnecessary 
references to pipelines transporting gas pursuant to Subparts H and 
K of Part 284. Section 161.1 will continue to refer to pipelines 
transporting gas pursuant to Subparts B and G. Continued reference 
to Subparts H and K is redundant since both Subparts apply to 
pipelines transporting gas under Subparts B and G.
    \23\Because the revisions to Part 284 are purely ministerial, 
the Commission concludes it has good cause under the Administrative 
Procedure Act for finding that notice and public comment on these 
revisions is unnecessary and contrary to the public interest. 5 
U.S.C. 553(b).
    \24\18 CFR 284.1.
    \25\The Commission further is deleting the obsolete reference to 
pipeline interruptible sales certificates. See Arkla Energy 
Resources Company, et al., 59 FERC  61,173 (1992).
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 B. Information Disclosure Requirements

    Standard E provides that pipelines may not disclose to affiliates 
any information the pipeline receives from non-affiliated shippers. 
Standard F provides that pipelines must contemporaneously disclose to 
all shippers any information related to transportation that the 
pipelines provide to affiliates. In Order No. 497-E, the Commission 
revised Standard F to eliminate the requirement for contemporaneous 
disclosure of sales and marketing information the pipelines provide to 
marketing affiliates.\26\
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    \26\Order No. 497-E, III FERC Stats. & Regs. Preambles at 30,985 
& n.19.
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1. Standard E--Disclosure of Information Received From Non-affiliates
    Tenneco contends Standard E should be removed entirely. It argues 
no basis exists for prohibiting disclosure to marketing affiliates of 
information received from other shippers, while permitting that 
information to be disclosed to non-affiliates. It maintains that if a 
shipper would be harmed by pipeline disclosure of information the 
shipper provides, the same harm would result from disclosure of that 
information to another non-affiliate.
    The Commission concludes that the Standard needs to be retained to 
prevent potential affiliate abuse. The Standard recognizes that the 
pipelines have access to non-affiliate information due to the 
pipelines' control over transportation service and that the pipelines 
have an economic incentive to favor affiliates with such information 
when disclosure will benefit the affiliate. The same incentive does not 
apply to sharing of non-affiliate information with other non-
affiliates.\27\
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    \27\Tenneco's argument that harm may result from disclosure of 
non-affiliate information to other non-affiliates would not 
necessarily dictate the deletion of Standard E, as Tenneco argues. 
It could justify expanding the Standard to prohibit disclosure to 
non-affiliates as well. But the Order No. 497 regulations are 
limited to affiliates because the pipelines have an economic 
incentive to favor affiliates, which is lacking in their dealings 
with non-affiliates. Undue discrimination with respect to non-
affiliates would be covered by the general Part 284 regulations.
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    CNG contends Standard E should be modified to permit disclosure of 
sales and marketing information: only the sharing of transportation 
related information would be prohibited. CNG recognizes the Commission 
took a contrary position in Order No. 497-E, but urges the Commission 
to reexamine that conclusion.28 CNG argues that the transmission 
of sales and marketing information is unrelated to the pipeline's 
exercise of market power over transportation, which is the only 
legitimate basis for restricting disclosure. CNG also claims Standard E 
may work to the disadvantage of non-affiliated shippers. For example, 
it states that, during the recent cold weather, it received requests 
for help in locating gas supplies that, due to Standard E, it was 
unable to pass along to its marketing affiliates, which may have been 
able to assist those customers.
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    \2\8Order No. 497-E, III FERC Stats. & Regs. Preambles at 30,985 
& n.19.
---------------------------------------------------------------------------

    The Commission reaffirms its decision in Order No. 497-E to retain 
the Standard E restrictions on disclosure of all information (including 
sales and marketing information) received from non-affiliated shippers. 
Unlike sales and marketing information that the pipelines obtain from 
the public domain (and can provide to affiliates under Standard F), 
sales and marketing information obtained from non-affiliated shippers 
(Standard E information) is directly related to the pipelines' control 
over transportation service. While public domain information is 
available to all, the information pipelines obtain from their customers 
is not, and Standard E prevents the pipelines from favoring their 
affiliates by providing them with non-public information that the 
pipelines have obtained as result of providing transportation service.
    CNG contends the Standard prohibits disclosure of information to 
affiliates when such disclosure may benefit the non-affiliated shipper 
providing the information to the pipeline. The Standard is intended to 
protect a non-affiliated shipper against the disclosure of confidential 
or commercially sensitive information to marketing affiliates. If the 
non-affiliated shipper finds such disclosure to be in its interest, it 
can waive its Standard E protection.29
---------------------------------------------------------------------------

    \2\9See El Paso Natural Gas Company, et al. 67 FERC 61,016 at 
61,043 (1994).
---------------------------------------------------------------------------

2. Standard F--Disclosure of Transportation-Related Information
    Panhandle Eastern Pipelines and Tenneco contend Standard F should 
be deleted. They contend even the remaining requirement to disclose 
transportation-related information needlessly inhibits competition, 
because the pipelines are uncertain what information they need to 
publicly disclose and, therefore, may act cautiously by withholding 
beneficial, legitimate information from affiliates. They assert that 
with the advent of capacity release, the pipelines' monopoly over 
transportation has been lessened, so that the rationale for the 
regulation no longer exists. Further, they contend that all important 
information related to transportation is now required to be made 
publicly available on the pipelines' EBBs. Tenneco observes that a less 
intrusive means of preventing abuse would be for the Commission to 
specify the transportation information that could provide competitive 
advantages and require that this information be posted on the EBBS.
    The Commission will retain Standard F. By requiring contemporaneous 
disclosure of transportation information provided to affiliates, 
Standard F ensures equal treatment of non-affiliates and affiliates, 
without undue burden on the pipelines. Not all transportation related 
information may be disclosed on pipeline EBBs, yet advance knowledge of 
such transportation information could be of value to an 
affiliate.30 The Commission fails to see how capacity release 
justifies deletion of the Standard. The potential to acquire released 
capacity does not mitigate the harm to non-affiliates that could result 
from selective disclosure of important non-public transportation 
information to affiliates.
---------------------------------------------------------------------------

    \3\0For example, a pipeline's future plans to add facilities, 
such as new receipt or delivery points or additional capacity is not 
currently disclosed on EBBs, but advance knowledge of such 
transportation information could be of value to an affiliate.
---------------------------------------------------------------------------

    Further, the Commission is not in the best position to determine 
all the types of transportation information that may be of competitive 
significance. The more general requirement of Standard F to post any 
information pipelines provide to affiliates permits the market itself 
to determine whether the information is of value. The Standard, 
therefore, strikes a reasonable balance between the need to protect 
against undue favoritism to affiliates and the need to permit pipelines 
to transact business with their affiliates.
    KGPC also requests clarification of what transportation information 
must be contemporaneously disclosed. It asserts that in Order Nos. 497 
and 497-A, the Commission stated that specific transportation, sales, 
and marketing information related to the affiliate's request need not 
be disclosed. It claims that although the Standard was difficult to 
interpret even before Order No. 497-E established different 
requirements for disclosure of sales and marketing information and 
transportation information, the distinction between these categories of 
information has made the determination of what information must be 
disclosed even more complex.
    As the Commission stated in Order Nos. 497 and 497-A, pipelines 
need only contemporaneously disclose general transportation information 
provided to an affiliate; they need not disclose information related to 
the affiliate's specific transportation request.\31\ This distinction 
appears reasonably self-explanatory, and KGPC has not explained why the 
distinction is difficult to make, nor has it identified specific 
situations that cause it difficulty, so that the Commission can provide 
guidance.
---------------------------------------------------------------------------

    \31\See Order No. 497, III FERC Stats. & Regs. [1986-1990] 
Regulation Preambles] at 31,141; Order No. 497-A, III FERC Stats. & 
Regs. [1986-1990] Regulation Preambles] at 31,597.
---------------------------------------------------------------------------

    KGPC further requests clarification of the Commission's statement 
in Order No. 497-E that, even though sales and marketing information no 
longer must be disclosed under Standard F, the Commission is not barred 
from examining such questions, if relevant and necessary, in specific 
cases. KGPC requests that the Commission specify the circumstances in 
which it will consider such issues.
    In Order No. 497-E, the Commission removed the general requirement 
for pipelines to disclose sales and marketing information. However, the 
Commission still retains the right to determine in individual 
proceedings that certain pipelines must disclose sales and marketing 
information when the circumstances show such disclosure is needed to 
prevent undue discrimination.

 C. Standard H--Tieing Gas Subject to Take-Or-Pay Relief

    In the NOPR, the Commission proposed to eliminate Sec. 161.3(h) of 
the regulations which prohibits pipelines from conditioning or tieing 
an agreement to release gas subject to take-or-pay relief to the 
purchase of services from a marketing affiliate. The Commission stated 
that this provision should no longer be needed since Order No. 636 
established procedures for dealing with gas supply realignment (GSR) 
costs resulting from the reformation or termination of take-or-pay 
contracts after the unbundling of sales from transportation 
service.\32\
---------------------------------------------------------------------------

    \32\Order No. 636, III FERC Stats. & Regs. Preambles at 30,458.
---------------------------------------------------------------------------

    Hadson and Indicated Parties argue for retention of this provision. 
Hadson states that, while the size of the take-or-pay problem has been 
reduced, the Commission has approved pricing differential mechanisms 
for reducing GSR costs under which gas subject to take-or-pay contracts 
is auctioned by the pipeline or marketing affiliate on a monthly basis. 
It also states the Commission has approved reverse auctions. These 
mechanisms, it asserts, still create the potential for anticompetitive 
tieing. Indicated Parties suggest that the phrase gas supply 
realignment costs be substituted for take-or-pay costs to ensure that 
pipelines do not attempt to tie the availability of unbundled 
transportation and storage services to the purchase of specific gas 
supplies.\33\ But they do not explain why retention of this requirement 
is necessary in light of the procedures established in Order No. 636 
and the restructuring cases for dealing with GSR costs.
---------------------------------------------------------------------------

    \33\They both also contend the Commission should retain current 
Sec. 250.16(b)(2)(xiii), which requires disclosure of whether any 
gas being transported is subject to take-or-pay relief. Indicated 
Parties again suggests the substitution of gas supply realignment 
costs for take-or-pay.
---------------------------------------------------------------------------

    The Commission will delete this requirement. Hadson has not 
demonstrated how the pipeline would rig an auction or a reverse 
auction\34\ that would result in tieing of an agreement to release gas 
to the purchase of services from an affiliate. The auction or reverse 
auction involves bidding on gas contracts which is independent of any 
services provided by a marketing affiliate. Moreover, the Commission 
can better monitor potential affiliate abuse in auctions by considering 
the circumstances of the auction mechanism proposed in individual cases 
rather than by promulgating a generic standard, which may not apply to 
certain cases.\35\
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    \34\In a reverse auction, parties bid an amount that the 
pipeline must pay them to take over pipeline gas contracts with 
prices that are above the market price. The pipeline, therefore, 
accepts the lowest bid (rather than the highest as in a standard 
auction).
    \35\See Texas Eastern Transmission Corporation, 64 FERC 1,305 
at 63,310 (1993)(finding sufficient safeguards against affiliate 
abuse); Natural Gas Pipeline Company of America, 64 FERC 61,295 at 
63,104-05 (1993).
---------------------------------------------------------------------------

D. Standard I (New Standard H)--Affiliate Discounts Contemporaneously 
Disclosed To Similarly Situated Shippers

1. Retention of Standard H
    The Commission is retaining the current standard, which is being 
renumbered Standard H. Current Standard I requires pipelines making a 
transportation discount to an affiliate to make a comparable discount 
contemporaneously available to all similarly situated non-affiliates. A 
number of commenters contend this provision should be removed.
    El Paso asserts the regulation is not needed, contending pipelines 
will not make an unjustified discount to an affiliate, because the 
pipelines will lose money. It further argues that pipelines may 
actually forgo making beneficial and competitive case specific 
discounts to affiliates because of the vagueness of the term 
``similarly situated.'' It asserts pipelines may not offer their 
affiliates a discount to avoid the risk of having to unjustifiably 
reduce rates to other shippers.
    K N Energy similarly contends that pipelines may not provide a 
market-justified discount to affiliates given the extra obligations and 
heightened scrutiny created by the provision. KGPC maintains the 
requirement seriously restricts negotiations between pipelines and 
affiliates because the parties must be continuously concerned about 
whether a conversation could be construed as an offer.
    K N Energy and Tenneco contend the requirement is not needed 
because the Commission has sufficient mechanisms to monitor and prevent 
undue discrimination. They point out the pipelines are required to file 
discount reports under Part 284, which enable non-affiliates to monitor 
discounts and file complaints of undue discrimination.
    The Commission will not delete Standard H, because requiring 
pipelines to make discounts contemporaneously available to similarly 
situated non-affiliates is needed to ensure equal treatment. Standard H 
does not substantially inhibit the provision of justified discounts to 
affiliates. When pipelines offer discounts to affiliates, they must 
only be able to provide a valid explanation for why another shipper 
requesting a comparable discount is not similarly situated to the 
affiliate.
    The discount information required to be filed under Part 284 is not 
a substitute for Standard H. Standard H requires pipelines to make 
offers contemporaneously available to similarly situated shippers. In 
contrast, the Part 284 discount information is not filed until 15 days 
after the close of the billing period, which is not equivalent to the 
contemporaneous notice required under Standard H.
2. Revision of the Standard to Eliminate Duplicative Posting 
Requirements
    The Commission is revising the standard to eliminate duplicative 
postings of information about affiliate discounts. Section 250.16 
currently requires the pipelines to post information about affiliate 
discounts on their EBBs. This information includes the duration of a 
discount, the discounted rate, the maximum rate, and the quantity of 
gas scheduled at the discounted rate during the billing period for each 
delivery point. A number of commenters requested that the Commission 
reduce or eliminate the Sec. 250.16 reporting requirement.
    Former Standard I required pipelines to make discounts available to 
similarly situated non-affiliates.\36\ In Colorado Interstate Gas 
Company (CIG),\37\ the Commission sought to eliminate any potential 
ambiguity about the way in which pipelines are to determine similarly 
situated shippers under the standard. The Commission found that 
pipelines could make a determination of similarly situated only if the 
pipelines first informed non-affiliates of the terms of the affiliate 
offer so the non-affiliates would have the opportunity to request a 
comparable discount if they thought they were similarly situated.\38\ 
Since all pipelines are now required by Order No. 636 to maintain EBBs, 
the Commission provided that the pipelines needed, at a minimum, to 
provide notice of affiliate discounts by posting them on the pipelines' 
EBBs. The information to be posted is virtually identical to that 
required under Sec. 250.16, including the date of the offer, the 
discount rate, the quantity of gas scheduled to be moved at the 
discounted rate, and the delivery points in the offer. Most pipelines 
now comply with the standard by using EBB posting.
---------------------------------------------------------------------------

    \36\Although the standard did not state the method for making 
discounts contemporaneously available to non-affiliates, the 
Commission suggested EBB posting as a means for communicating such 
information. Order No. 497-A, FERC Stats. & Regs. [Regulations 
Preambles 1986-1990] at 31,596.
    \37\65 FERC 61,264 at 62,224-25 (1993).
    \38\For example, a pipeline cannot determine on its own whether 
the non-affiliate was willing to abide by the terms and conditions 
contained in the affiliate offer. It needs to provide the non-
affiliate with notice of the terms and the opportunity to comply 
with them.
---------------------------------------------------------------------------

    The Commission has determined that the duplicative posting 
requirements for affiliate discounts are not necessary. The Commission, 
therefore, will modify Standard H to clarify that pipelines are to 
comply with the Standard by contemporaneously posting information about 
affiliate discounts on their EBBs and permitting non-affiliates to 
request such discounts if they conclude they are similarly situated. 
The Commission will then eliminate the requirement to make similar EBB 
postings under Sec. 250.16. These revisions do not add a new reporting 
requirement. They essentially eliminate duplicative postings by moving 
the affiliate discount posting requirement from Sec. 250.16 to Standard 
H.
    The elimination of the Sec. 250.16 reports will not adversely 
affect the ability of non-affiliates to monitor affiliate transactions. 
The only significant difference between the Standard H and Sec. 250.16 
EBB posting requirements is that the Sec. 250.16 reports are posted at 
the close of the billing period so they include the quantity of gas 
actually scheduled by the affiliate whereas scheduled quantity 
information could not be included in a contemporaneous posting under 
Standard H. But after-the-fact information on actual quantities 
scheduled is not needed for shippers adequately to monitor affiliate 
transactions. Non-affiliates only need to be able to determine whether 
they were denied a discount offered to an affiliate, and the 
information in the contemporaneous postings will allow them to make 
this determination. The actual quantities scheduled under a discount 
casts no light on whether the pipeline engaged in undue discrimination 
when the discount was offered.39
---------------------------------------------------------------------------

    \3\9As discussed later, pipelines still will be required, under 
Sec. 250.16, to maintain discount information for both affiliate and 
non-affiliate transactions. See text accompanying note 63, infra. 
The Commission still requires the affiliate and non-affiliate 
information, including the actual volumes shipped, to be able to 
adequately review completed affiliate and non-affiliate 
transactions.
---------------------------------------------------------------------------

    Accordingly, the Commission will incorporate into Standard H the 
requirement that a pipeline offering a discount to an affiliate (or a 
discount for a transportation transaction in which an affiliate is 
involved) must contemporaneously post the offer on its EBB and maintain 
the posting for 90 days. The posting must include the date of the 
offer, the discount rate, the quantity of gas scheduled to be moved at 
the discounted rate, the delivery points in the offer, any conditions 
underlying the offer (for example, if the discount is dependent on an 
agreement to move a certain quantity of gas or on the use of a specific 
transportation path), and the procedures by which shippers can request 
a comparable discount. The posting of the information must conform with 
the requirements applicable to pipelines' EBBs as required in 
Sec. 284.8(b)(4).40
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    \4\0The requirements for EBB access to this information are 
discussed at the text accompanying note 65, infra.
---------------------------------------------------------------------------

3. Specific Issues
a. Affiliate's Role in a Transportation Transaction
    In the NOPR, the Commission proposed to require the pipelines to 
disclose an affiliate's role in a transportation transaction when they 
are not the shipper in the transaction.41 Several pipelines object 
to this proposal, contending it creates an impossible burden since 
pipelines will not know the affiliate's role if it is not a 
shipper.42 KGPC contends that disclosure of an affiliate's role, 
when it is not a shipper, runs counter to the Commission's 
determination in Order No. 497-E to eliminate Standard F's 
contemporaneous posting requirements for non-transportation related 
information. Texas Gas states that since the pipeline generally will 
not know whether an affiliate is involved, the Commission should permit 
pipelines to obtain this information from shippers.43
---------------------------------------------------------------------------

    \4\1In the NOPR, this proposal was related to the requirements 
under Sec. 250.16. Since the Commission has moved the EBB posting 
requirement to Standard H, the Commission will address here comments 
on the NOPR that are applicable to the contemporaneous posting of 
affiliate discount offers on pipeline EBBs.
    \4\2CNG, K N Energy, KGPC, Panhandle Eastern Pipelines, WGM, 
WNG/Northwest.
    \4\3It states that most pipelines already require shippers to 
complete a request form for internal purposes and that information 
on the affiliate's role could be included on that form, even if no 
other Order No. 497 information needs to be included.
---------------------------------------------------------------------------

    The Commission's requirement to disclose discounts when an 
affiliate is involved in the transaction is merely a continuation of 
the requirement in Sec. 250.16(b)(2) of the existing regulations to 
report such transactions.44 In many instances, pipelines are aware 
of the role played by its affiliate or sales operating unit. For 
instance, when the affiliate acts as an agent in a transaction (by 
arranging for gas supplies and transportation), the pipeline may know 
of the affiliate's role even when it is not the official shipper 
because the affiliate will be making the transportation arrangements on 
behalf of its client. In response to Texas Gas's comment, the 
Commission will not require the pipelines to obtain the information 
from shippers about affiliate involvement. The pipelines need disclose 
that information only when they have knowledge of the affiliate's 
involvement in the transaction.
---------------------------------------------------------------------------

    \4\4In fact, pipelines have reported transactions in which an 
affiliate is not the shipper under the existing regulations.
---------------------------------------------------------------------------

    The Commission finds no inconsistency between the requirement to 
disclose transactions in which an affiliate is involved and its 
decision in Order No. 497-E to eliminate the contemporaneous disclosure 
requirement for sales and marketing information provided to an 
affiliate. When a pipeline is aware that its affiliate is involved in a 
transportation transaction, it may offer a selective transportation 
discount to the actual shipper in order to ensure that the shipper does 
business with the affiliate. Thus, a pipeline's provision of a 
transportation discount in a transaction in which an affiliate is 
involved can raise the same question of potential undue discrimination 
as a discount provided directly to the affiliate. Conversely, when the 
pipeline does not know of its marketing affiliate's involvement in a 
transaction, the possibility of unduly preferential behavior seems 
unlikely.
b. Inclusion of Receipt Points
    The National Registry contends that receipt point information 
should be included because discounts may sometimes depend on the point 
at which gas enters the system. The Commission, however, will not 
include receipt points because receipt point information is often 
voluminous. If in a particular case, a discount is based on the receipt 
point used, that condition would be disclosed as a condition for 
granting the discount.
c. Disclosure of Non-Affiliate Discounts
    Indicated Parties suggest that the Commission require posting of 
non-affiliate discount information on the EBB within 15 days of the 
commencement of service. KGPC also suggests that the Commission should 
replace the affiliate reporting requirements with a general requirement 
for EBB posting of all interruptible transactions.
    The Commission will not require posting of non-affiliate 
information, because information on discounts to non-affiliates is 
unrelated to the goal of the reporting requirements--to permit non-
affiliates to monitor affiliate discounts for possible discrimination. 
A non-affiliate need not have access to other non-affiliate information 
to monitor affiliate transactions; the non-affiliate can compare any 
affiliate discounts with the rate the non-affiliate pays. The non-
affiliate information will be available to the Commission upon request, 
under Sec. 250.16, should the Commission need to compare the discounts 
offered to affiliates and non-affiliates in investigating a complaint 
of discrimination.

E. Standard G & Standard K (New Standard J)--Separation of Operating 
Employees and Books of Account

    Current Standards G and K require that the operating employees of 
pipelines and affiliates function independently to the maximum extent 
practicable and that the books of account for the pipelines and 
affiliates be maintained separately. Tenneco contends these provisions 
are unnecessary after Order No. 636, because pipelines are required by 
Order No. 636 to unbundle sales from transportation service and, 
therefore, must establish separate operations and staffs. Moreover, as 
a practical matter, it contends employees making day-to-day decisions 
regarding gas transportation will not be making decisions for the 
affiliate.
    By requiring separation of operating personnel to the maximum 
extent practicable, Standard G complements the other Standards of 
Conduct by reducing the possibility that information will improperly be 
shared with an affiliate. Tenneco is correct that in Order No. 636, the 
Commission did adopt new regulations under Part 284 that, like Standard 
G, require pipelines to ensure that their unbundled sales operating 
personnel operate independently from its transportation operating 
personnel.45 But these regulations do not apply to marketing 
affiliates, and, therefore, Standard G still is needed to ensure 
adequate separation of pipeline and marketing affiliate personnel.
---------------------------------------------------------------------------

    \4\518 CFR 284.286.
---------------------------------------------------------------------------

    Standard J's requirement for separation of books of account is 
needed to permit scrutiny of costs so that affiliate costs are not 
shifted to the pipeline's rate base and recovered from the pipeline's 
transportation customers.

VII. Tariff Requirements

A. Shared Operating Personnel

    Section 250.16(b)(1)(i) requires pipelines to maintain in their 
tariffs a list of operating personnel shared by the pipelines and their 
affiliates, which, under Sec. 250.16(d)(2), they must update quarterly, 
if any changes occur. The NOPR proposed to continue this requirement. 
CNG and Panhandle Eastern Pipelines request clarification that the 
pipelines will not be required to make quarterly filings if no changes 
in shared personnel or facilities have occurred. The Commission agrees 
that a filing need only be made if changes have occurred.

B. Request For Service Information

    The Commission proposed to eliminate the requirement, in current 
Sec. 250.16(b)(1)(ii), that pipelines include in their tariffs the 
information required for a valid request for service, including the 
information required for the Form No. 592 affiliate transportation log. 
Indicated Parties suggest this provision be retained, so parties will 
know what must be included in a valid request for service. They assert 
that, as far they can determine, this requirement is not duplicated in 
other regulations and that such information is important, because a 
valid request for service is often a prerequisite for participation in 
the capacity release program.
    The Commission finds that the requirement for pipelines to include 
information needed for a valid service request is no longer related to 
affiliate abuse. Under the previous regulations, pipelines were 
required to report certain information about shippers that the 
pipelines could obtain only through the transportation request 
form.46 Under this rule, the Commission is no longer requiring 
pipelines to report these categories of information, and, therefore, a 
tariff provision requiring shippers to disclose such information is no 
longer needed. The Commission notes, however, that, under Part 284, 
pipelines must have tariff provisions that provide for equality of 
transportation service, with reasonable and non-discriminatory terms 
and conditions for acquiring such service.47 To comply with these 
requirements, the pipelines still must have tariff provisions 
describing the procedures necessary to request service and participate 
in the capacity release program.
---------------------------------------------------------------------------

    \4\6For example, for each transportation transaction reported on 
Form No. 592, pipelines were required to report the supplier of gas, 
the end-user, and whether or not the gas was subject to take-or-pay 
relief. This information would be known by the shippers, not the 
pipeline. The requirement for shippers to complete the 
transportation request form to obtain service ensured that the 
pipelines would obtain the necessary information from the shipper.
    \4\7See 18 CFR 284.8, 284.9, 284.14.
---------------------------------------------------------------------------

C. Availability And Pricing Of Transportation Services

    The Commission proposed to eliminate current Sec. 250.16(b)(1)(iv) 
that requires pipeline tariffs to include the procedures used to inform 
affiliated and non-affiliated shippers of the availability and pricing 
of transportation service and of the capacity available for 
transportation. The Commission concluded this requirement was 
superfluous in light of the Order No. 636 requirement for pipelines to 
provide equal and timely access on their EBBs to information relevant 
to the availability of service on their systems.48
---------------------------------------------------------------------------

    \4\818 CFR 284.8(b) (3), (4); 18 CFR 284.9(b) (3), (4).
---------------------------------------------------------------------------

    Indicated Parties contend that the current Order No. 636 
requirements do not require pipelines to post the procedures used to 
determine the availability of transportation services, the amount of 
capacity the pipelines have available, or the pricing of services. They 
submit that the Commission should ensure that pipeline tariffs require 
pipelines to post information on ``operationally available'' capacity 
on their EBBs and to describe the procedures used in posting the 
information, such as the timing of postings.
    The Commission concludes that the requirements of Part 284 provide 
sufficient disclosure of the necessary information about capacity on 
pipelines. Towards that end, the Commission recently issued Order No. 
563 detailing the information about capacity that the pipelines must 
disclose on their EBBs (as well as through downloadable files), 
including operationally available capacity.49 In that proceeding, 
the Commission found no need for requiring pipelines to file tariffs 
setting forth the way in which the pipelines will provide the 
information required by the rule.50
---------------------------------------------------------------------------

    \4\9Order No. 563, III FERC Stats. & Regs. Preambles at 31,007.
    \5\0Order No. 563, III FERC Stats. & Regs. Preambles at 31,004.
---------------------------------------------------------------------------

VIII. Transportation Information

    Current Sec. 250.16 requires pipelines to post a variety of 
information about affiliate transportation service requests and 
affiliate discounts on the pipelines' EBBs. The regulations also 
require the pipelines to maintain the same information for non-
affiliate transactions, so that it can be provided to the Commission 
upon request.
    In the NOPR, the Commission proposed to reduce significantly the 
information concerning shippers' requests for transportation service, 
retaining only a few elements, principally relating to the position of 
requests in the pipelines' transportation queues.51 But the 
Commission was unsure about the value of these requirements and 
requested comments on whether they should be retained. In the NOPR, the 
Commission proposed to retain the maintenance and posting requirements 
related to affiliate and non-affiliate discounts, but proposed to limit 
these requirements to interruptible transportation.
---------------------------------------------------------------------------

    \5\1The request for service items proposed to be retained were: 
the identity of the shipper requesting service, the date the request 
was received, the affiliation of the requester with the pipeline, 
the maximum daily volume of gas requested, the position of the 
request in the transportation queue, the disposition of the request, 
complaints concerning requested or provided service, and any tariff 
waivers granted in providing the requested service.
---------------------------------------------------------------------------

A. Capacity Allocation Log

    Many commenters contend all service request information should be 
deleted. WGM and WNG/Northwest contend the original basis for these 
requirements was to monitor the process of awarding contracts so that 
affiliates would not receive preferential queue positions. They 
maintain this rationale is no longer valid since queues are no longer 
used in the restructured environment. Numerous other commenters 
similarly contend that queues no longer have any effect on curtailment 
or bumping rights.52 Texas Gas also points out that Sec. 284.13 of 
the Commission's regulations requires pipelines to keep, and make 
publicly available, a log of requests for service that contains much of 
the same information as required by Sec. 250.16.53
---------------------------------------------------------------------------

    \5\2AER/MRT (should at least provide a ``not applicable'' 
designation for pipelines without queues), Columbia, KGPC, Natural 
(arguing request date revealed by proposed Sec. 250.16(c)(2) so 
queue position not needed), Panhandle Eastern Pipelines, Questar, 
Tenneco, Texas Gas, and TGPL.
    \5\3Texas Gas further argues that the information required to be 
provided about the disposition of a service request is meaningless, 
and that, even if it has some value, the information is supplied 
through other filing requirements.
---------------------------------------------------------------------------

    Panhandle Eastern Pipelines, Natural, and TGPL contend the 
requirement to post complaints parallels the Commission's requirement 
to disclose complaint procedures in the tariff and only one should be 
retained. TGPL and Natural contend that complaints are solely between 
the pipeline and the complaining party, so electronic posting serves no 
purpose. TGPL further argues that posting of complaints is too complex 
for electronic format. AER/MRT request that complaints by end-users 
should not be included since the Commission has proposed deleting the 
requirement to post the state of the ultimate end-user (former 
Sec. 250.16(b)(2)(xi)).
    AER/MRT and TGPL contend the requirement to post tariff waivers 
duplicates Standard L, which requires pipelines to maintain a log of 
tariff waivers that must be available for copying on a daily basis. 
Indicated Parties, however, requests the waiver provision be amended to 
require separate reporting of waivers granted to affiliates and sales 
marketing units.
    The Commission agrees that the data now required to be posted 
concerning service requests do not reflect the methods used by the 
pipelines to allocate capacity. As the commenters point out, Commission 
policy and pipeline tariffs require that interruptible transportation 
be allocated first on the basis of price paid when the pipeline is 
unable to provide the amount of requested service. If the rate bid 
still is not sufficient to allocate interruptible capacity, some 
pipelines rely on pro rata allocation or some other means to allocate 
capacity that does not depend on contract dates or other similar 
information. For these pipelines, the Commission agrees that posting 
contract information is not necessary because that information bears no 
relation to the capacity allocation decision.
    However, some pipelines continue to rely on contract or other 
information to break ties and determine to whom interruptible capacity 
is allocated. But even for these pipelines, the current regulations may 
not capture the appropriate information used to allocate interruptible 
capacity. The current regulations only require the pipelines to 
maintain information about the service request date, while some 
pipelines use other dates or other information for allocation of 
interruptible capacity, such as the contract execution date, the date 
gas is first shipped under a contract, rate schedule, transportation 
type, or other rankings.54 Some pipelines rely on similar contract 
information in allocating firm capacity during curtailments.
---------------------------------------------------------------------------

    \5\4For examples of the variety of information used, see ANR 
Pipeline Company, Second Rev. Vol No. 1, Original Sheet No. 118, 
General Terms and Conditions, Section 9.2 (date of agreement and 
request for service date); Koch Gateway Pipeline Company, Fifth Rev. 
Vol No. 1, Second Sub. Orig. Sheet Nos. 1806 & 1807, General Terms 
and Conditions, Section 11.4(c)(3) (request for service date and 
lowest transportation type); Natural Gas Pipeline Company of 
America, Sixth Rev. Vol. No. 1, Original Sheet No. 237, General 
Terms and Conditions, Section 5.7(c)(1)(ii) (request for service 
date); Northwest Pipeline Corporation, Third Rev. Vol No. 1, 
Original Sheet Nos. 219-221, General Terms and Conditions, Section 
12 (contract execution date, request for service date, or date gas 
first tendered, if gas not tendered within 15 days of applicable 
date); Panhandle Eastern Pipe Line Company, First Rev. Vol. No. 1, 
Original Sheet No. 243, General Terms and Conditions, Section 8.9 
(rate schedule and service request date); Tennessee Gas Pipeline 
Company, Fifth Revised Volume No. 1, Original Sheet No. 317, General 
Terms and Conditions, Section 5 (supply and market rankings).
---------------------------------------------------------------------------

    Accordingly, the Commission will revise the regulations to better 
fit the current need for contract information and to reduce the 
reporting burden on the pipelines. Those pipelines that continue to 
rely upon contract execution dates, service request dates, or other 
data to allocate firm or interruptible capacity must maintain (for both 
affiliate and non-affiliate shippers) a log of those contract dates or 
other information used to allocate capacity.55
---------------------------------------------------------------------------

    \5\5This log will consist of shipper name (including a 
designation whether the shipper is a local distribution company, an 
interstate pipeline, an intrastate pipeline, an end-user, a 
producer, or a marketer), the shipper's affiliation with the 
pipeline, contract number, and the relevant dates or other data used 
for capacity allocation. The other data, for example, may include 
rate schedule, transportation type, or other ranking criteria used 
to establish service priority.
---------------------------------------------------------------------------

    The pipelines must post on their EBBs the current relevant capacity 
allocation data for their affiliates.56 This posting is equivalent 
to the current requirement to post transportation request information, 
and will enable shippers to monitor the pipelines' allocation of 
capacity to their affiliates. The posting of the information must 
conform with the requirements applicable to pipelines' EBBs as required 
in Sec. 284.8(b)(4).57 The pipelines also must provide the full 
capacity allocation log (for affiliates and non-affiliates) to the 
Commission upon request, within a reasonable time and must make it 
available pursuant to the Commission's discovery procedures, 18 CFR, 
Part 385, Subpart D.58
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    \5\6As contracts expire or allocation data is revised, the 
pipelines should remove the outdated data from the EBB posting. The 
pipelines, however, are still required to maintain the historical 
data for three years so it can be provided to the Commission if 
needed.
    \5\7The requirements for EBB access to this information are 
discussed at the text accompanying note 65, infra.
    \5\8In the Commission's EBB standard-making proceeding in Docket 
No. RM93-4-000, the industry Working Groups proposed to develop an 
Index of Purchasers to reflect firm and interruptible contract 
information. The Commission found this proposal had significant 
merit and directed the industry to work to develop a final proposal 
by September 30, 1994. See Order No. 563-A, III FERC Stats. & Regs. 
Preambles, at 31,047. Ultimately, when the Index of Purchasers is 
developed, the contract information required here could be included 
in the Index.
---------------------------------------------------------------------------

    The Commission is deleting the requirements to post complaints and 
tariff waivers. If a complaint is not handled by the pipeline to the 
satisfaction of the complaining party, the complainant can bring the 
matter to the Commission either through the Commission's Enforcement 
Task Force hotline or the Commission's formal complaint procedures. In 
addition, if shippers have questions about tariff waivers, the ability 
to obtain such information under former Standard L (new Standard K) is 
sufficient.
    Indicated Parties support continuation of the current requirement 
to disclose the maximum daily quantity of gas to be transported under a 
contract and contend the requirement should be expanded to include the 
receipt and delivery points under the contract. The Commission, 
however, does not find that continued disclosure of this information is 
necessary. Information on maximum daily quantities under each contract 
is already available for all shippers in the initial reports that 
pipelines must file under Part 284.59 Such information does not 
appear so critical to capacity allocation that a duplicative reporting 
requirement for affiliate transactions should be imposed.60
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    \5\918 CFR 284.106.
    \6\0The same information also would be provided under the Index 
of Purchasers proposal in the EBB rulemaking proceeding. Order No. 
563-A, III FERC Stats. & Regs. Preambles, at 31,047.
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B. Discount Information for Affiliate and Non-Affiliate Transactions

    The current Sec. 250.16 regulations require pipelines to disclose 
affiliate discounts on their EBB and to maintain non-affiliate 
information, which will be provided to the Commission, upon request. As 
discussed earlier, the Commission is deleting the requirement for 
pipelines to post affiliate information on their EBBs, because the 
pipelines contemporaneously post affiliate discount information under 
Standard H.
    A number of commenters contend the Commission should eliminate the 
reporting requirements entirely. Tenneco maintains that the reporting 
requirements are not needed to monitor or prevent abuse, because 
sufficient information about the processing of transportation requests 
and rates is maintained by the pipelines and would be available if 
allegations of undue discrimination are made. It states permanent data 
collection and posting requirements should not be imposed based on 
unsubstantiated suspicions that abuses will occur in the post Order No. 
636 environment. Several commenters argue the Order No. 497 
requirements are duplicative of the requirement in Sec. 284.7(d)(5)(iv) 
that pipelines file discount information with the Commission.61 
Natural argues that since the Commission found the Part 284 reporting 
requirements to be sufficient for firm service, these requirements 
similarly should be sufficient for interruptible service. Columbia 
argues that, like the allocation of firm capacity, the allocation of 
interruptible capacity on its system takes place during the nominating/
bidding process conducted through and disclosed on its EBB, and 
therefore no separate Order No. 497 posting requirement is needed.
---------------------------------------------------------------------------

    \6\1Columbia, KGPC, Natural, Tenneco.
---------------------------------------------------------------------------

    The Commission will retain the requirement for pipelines to 
maintain discount information for affiliates and non-affiliates and 
provide that information to the Commission upon request. Information on 
discounting is needed for the Commission to monitor affiliate 
transactions, and this information is not duplicated elsewhere.62 
The information required in Sec. 250.16 is more extensive than the 
discount information required to be filed under Part 284. For example, 
the discount information under Sec. 250.16 includes the quantity of gas 
scheduled at the discount for each delivery point, which is not 
included in the Part 284 reports. The Commission requires the more 
detailed information to adequately monitor and compare affiliate and 
non-affiliate transactions.63
---------------------------------------------------------------------------

    \6\2Most pipelines do not provide public access to the details 
of their interruptible discounts on their EBBs. If Columbia believes 
that its EBB currently would provide the Commission with the 
required information about affiliate and non-affiliate discounts 
required in this rule, it may seek a waiver of the reporting 
requirements.
    \6\3See Order No. 497, FERC Stats. & Regs. [Regulations 
Preambles 1986-1990] at 31,147. For example, the actual quantity 
information can be used to determine revenues received from 
affiliate and non-affiliate transactions. Such information is needed 
to monitor transactions and is also needed to properly evaluate the 
throughput adjustments pipelines propose in rate cases to reflect 
transportation discounts.
---------------------------------------------------------------------------

    Accordingly, the Commission will continue to require pipelines to 
maintain discount information for both affiliate and non-affiliate 
transactions. They must provide this information to the Commission upon 
request, within a reasonable time, according to specifications and 
formats prescribed by the Commission in Form No. 592.64
---------------------------------------------------------------------------

    \6\4The information also must be made available under the 
Commission's discovery procedures.
---------------------------------------------------------------------------

    The Commission had proposed to eliminate the requirement for the 
pipelines to provide the discount information for firm capacity, 
stating that, under Order No. 636, much of the posting and awarding of 
firm service by the pipelines will take place on the pipelines' EBBs. 
The Commission, however, has reconsidered and will continue the current 
requirement that pipelines include firm discount information in the 
data to be made available to the Commission. First, after review of 
pipeline tariffs, the Commission is not sure that all pipelines will be 
posting the details of their sales of firm capacity on their EBBs. 
Second, including firm discounts in this data will enable Commission 
staff to process the information more easily, because all relevant 
discount information will be provided in one format.

IX. EBB Access and Archiving Requirements

    Under Standard H, pipelines will be posting information related to 
affiliate discount offers on their EBBs and, under Sec. 250.16(c), they 
also will be posting the affiliate contract allocation data on their 
EBBs. In the NOPR, the Commission proposed to conform the Order No. 497 
EBB posting requirements with the EBB requirements under Part 284, and 
the Commission is adopting this approach.
    The pipelines, therefore, must ensure that the affiliate 
information is displayed in a user-friendly format and that their EBB 
incorporates the same features as apply to the other aspects of the 
pipelines' EBBs.65 The protocols and procedures for accessing the 
affiliate information also must be the same as those used to access 
each pipeline's EBB. Thus, the pipelines must permit users to obtain 
the affiliate information by using the same phone number and log-on 
procedures used to access the information about available capacity on 
the pipelines' EBBs.66
---------------------------------------------------------------------------

    \6\5See Order No. 636, III FERC Stats. & Regs. Preambles at 
30,415. For example, the requirements to provide information through 
downloadable files, to provide on-line help, search functions, and 
menus, and to provide for backing-up, archiving, and retrieval of 
this material would be the same as those for the capacity 
availability information posted pursuant to Sec. 284.8(b)(4).
    \6\6For example, the Commission envisions that, in most cases, 
the Order No. 497 information would be a separate menu item that 
users could choose when they log-on to the pipeline's EBB.
---------------------------------------------------------------------------

    Columbia and Texas Gas contend that pipelines should be permitted 
to post the affiliate information in a manner consistent with their EBB 
formats and not be required to adhere to the Form No. 592 formats. 
Hadson contends the Commission should continue to require a hard copy 
filing of the Form No. 592 information with the Commission, because 
many pipelines' Order No. 497 boards are so poorly designed that 
shippers experience difficulty in accessing and abstracting useful 
information.
    Form No. 592 is not intended to dictate the mode of displaying 
information on EBBs, but to provide the requirements for providing 
information to the Commission electronically. The EBB regulations 
require the pipelines to display information in a user-friendly format 
and pipelines, therefore, are responsible for developing a user-
friendly display for the affiliate information posted on their EBBs. 
Since the Commission has established EBBs as the mode of communication 
between pipelines and their customers and the EBBs are required to be 
user-friendly, the Commission will not require hard copy filings. 
Moreover, any possible benefits from hard copy filing are outweighed by 
the filing burden on the pipelines and the administrative burden on the 
Commission of collecting and maintaining the hard copy information.
    Panhandle Eastern Pipelines contend that integrating the Order No. 
497 information into their EBB would be costly and if the Commission 
insists on merger of the boards, it suggests the Commission should 
provide 9 months within which to do so. The Commission concludes that 
integrating the marketing affiliate information required here into the 
pipelines' current EBB structure is necessary to ensure shippers can 
access the information easily without having to use an entirely 
different set of procedures and protocols to view the affiliate 
information. In fact, many pipelines already have integrated their 
affiliate information with their Order No. 636 EBBs. Pipelines that 
cannot accommodate such integration, may file a request for an 
extension of time, providing good cause for extending the compliance 
deadline.
    PG&E requests clarification about the pipelines' obligation to 
archive the information required to be posted and maintained under the 
rule. It contends the pipelines should be required to maintain the 
information for a reasonable period of time, suggesting they archive 
the data at least until their next rate case. The EBB posting of 
affiliate information must conform with the Commission's requirements 
for EBBs.
    The current regulations provide that data be maintained consistent 
with the Sec. 284.8(b)(4) requirements relating to EBBs, which includes 
a three year archiving requirement.67 Thus, all information posted 
on EBBs must be archived for three years. Similarly, the three year 
maintenance requirement will apply to the information in the log of 
contract allocation data, Sec. 250.16(c),68 and the discount data, 
Sec. 250.16(d).
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    \6\718 CFR 284.8(b)(4)(ii).
    \6\8Pipelines must maintain the log data for each contract as 
long as the data is used to allocate capacity and for three years 
after the data is no longer used for capacity allocation. For 
example, if a contract is terminated or revised, the historical data 
about that contract must be maintained for three years.
---------------------------------------------------------------------------

X. Miscellaneous Issues

A. Reporting of Affiliate Discounts Under Part 284

    Current Sec. 250.16(d)(4)(ii) permitted pipelines filing affiliate 
discount reports to exclude those transactions from the discount 
reports required to be filed under Sec. 284.7(d)(5)(iv). The Commission 
proposed to remove this provision, because, under its proposed 
regulations, pipelines would no longer file affiliate reports with the 
Commission, but would post them on their EBBs. AER/MRT contend that if 
affiliate discounts are posted on the EBB within 15 days of the 
transaction, the Part 284 discount reports still should not be 
required.
    The Commission will require pipelines to file affiliate discounts 
under Sec. 284.7(d)(5)(iv), because the Commission is deleting the 
requirement to post affiliate discounts under Sec. 250.16. Under 
Standard H, pipelines must only post offers of affiliate discounts. 
Thus, pipelines must file the affiliate discount information for the 
completed transaction under the Part 284 regulations.

B. Relation of the Marketing Affiliate Regulations of This Rule to 
Tariff Requirements Addressing Similar Problems

    El Paso requests clarification that the Commission's Order No. 497 
regulations, as codified in Part 161 and Sec. 250.16 of the 
regulations, constitute the exclusive requirements relating to 
marketing affiliates superseding any specific tariff provisions related 
to affiliate transactions. It asserts that the Commission has in the 
past imposed tariff requirements for certain transactions (such as gas 
inventory charges or interruptible sales) that were meant to address 
problems similar to those addressed in the affiliate provisions. It 
maintains that these tariff provisions should be considered inoperative 
so all pipelines will be treated equally.
    The Commission cannot make a universal determination of the 
applicability of all outstanding tariff provisions. The Commission, 
however, will carefully review pipeline filings to eliminate any such 
provisions the pipelines believe are superfluous in light of the 
marketing affiliate requirements.

C. Applicability of the Marketing Affiliate Regulations of This Rule to 
Permanent Releases of Capacity

    AER/MRT request clarification of whether a permanent release of 
capacity will trigger the reporting and maintenance requirements of the 
rule. They point to the Commission's finding that the Order No. 497 
reporting requirements do not apply to temporary capacity 
releases,69 and contend the same treatment should apply to 
permanent releases, since permanent releases, like temporary releases, 
are controlled not by the pipeline, but by the firm shipper holding 
capacity.
---------------------------------------------------------------------------

    \6\9See Northwest Pipeline Corporation, 65 FERC  61,007 (1993).
---------------------------------------------------------------------------

    The Commission does not agree that permanent releases are identical 
to temporary releases. In a temporary capacity release, the releasing 
shipper is still obligated to the pipeline under its initial contract. 
Thus, even if the releasing shipper agrees to accept a discounted rate, 
the pipeline has not agreed to the discount because the releasing 
shipper will owe the maximum rate under its contract.70 In a 
permanent capacity release, however, the releasing shipper's 
contractual obligations end, and the replacement shipper enters into a 
new contract with the pipeline. Thus, if the pipeline offers a discount 
to its affiliate it must post that discount on its EBB under Standard H 
and it must maintain the required discount information under 
Sec. 250.16.
---------------------------------------------------------------------------

    \7\0The releasing shipper is entitled to a credit to reflect the 
amount bid by the replacement shipper. Of course, if the releasing 
shipper's contract with the pipeline involved a discount, that fact 
would be disclosed when the contract was consummated.
---------------------------------------------------------------------------

D. EBB Posting of Information Constitutes a Filing

    Hadson requests clarification that, as stated in Order No. 497-E, 
the posting of Order No. 497 information on a pipeline's EBB 
constitutes a filing with the Commission for the purposes of 18 U.S.C. 
Sec. 1001, which provides criminal penalties for a knowing and willful 
misrepresentation to the government.71 The Commission reaffirms 
its position in Order No. 497-E that posting of the affiliate 
information is deemed to be a filing for purposes of 18 U.S.C. 
Sec. 1001.
---------------------------------------------------------------------------

    \7\1See Order No. 497-E, III FERC Stats. & Regs. Preambles at 
30,990.
---------------------------------------------------------------------------

E. Posting of Pipeline Tariffs

    Indicated Parties contend that the pipelines should be required to 
post their tariffs. They assert such posting would save shippers as 
well as the pipelines considerable time and money as compared with the 
current requirement that pipelines make their tariffs available for 
public inspection and send copies to shippers. The issue of posting 
pipeline tariffs is unrelated to the affiliate regulations and is not 
appropriately considered in this proceeding. The issue has been 
discussed at some of the conferences in Docket No. RM93-4-000 relating 
to standards for EBBs, and that would be a more appropriate forum to 
consider this issue.

F. Relationship to the Commission's EBB Standards Proceeding

    The National Registry contends that the issues of affiliate 
disclosure are related to issues involved in the Commission's ongoing 
proceeding, in Docket No. RM93-4-000, to develop standards for 
electronic dissemination of information about firm and interruptible 
capacity. In particular, the National Registry is concerned about the 
disclosure of information relating to the firm and interruptible 
capacity rights of shippers, and suggests that the Commission hold a 
technical conference to determine how best to provide disclosure of 
capacity rights information.
    The Commission finds that the issue of disclosure of capacity 
rights is properly considered only in the Docket No. RM93-4-000 
proceeding. As stated earlier, in Order No. 563-A, the Commission found 
merit in the development of an index of capacity rights and directed 
the industry to develop a final proposal by September 30, 1994.

XI. 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.72 The 
Commission has categorically excluded certain actions from these 
requirements as not having a significant effect on the human 
environment.73 The action taken here falls within the categorical 
exclusions provided in the Commission's regulations.74 Therefore, 
an environmental assessment is unnecessary and has not been prepared in 
this rulemaking.
---------------------------------------------------------------------------

    \7\2Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & 
Regs. Preambles 1986-1990  30,783 (1987).
    \7\318 CFR 380.4.
    \7\4See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5).
---------------------------------------------------------------------------

XII. Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act of 1980 (RFA)75 generally 
requires a description and analysis of final rules that will have 
significant economic impact on a substantial number of small entities. 
The regulations impose reporting requirements on interstate natural gas 
pipelines. Since these pipelines are not small entities, the 
regulations will not have significant economic impact on small 
entities. Thus, pursuant to section 605(b) of the RFA, the Commission 
hereby certifies that the regulations proposed herein will not have a 
significant impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \7\55 U.S.C. 601-612.
---------------------------------------------------------------------------

XIII. Information Collection Requirement

    Office of Management and Budget (OMB) regulations require approval 
of certain information collection requirements imposed by agency 
rules.76 The final rule revises and reduces the reporting 
requirements/burden under existing FERC-592, Marketing Affiliates of 
Interstate Pipelines, (OMB Control No. 1902-0157).
---------------------------------------------------------------------------

    \7\65 CFR 1320.14.
---------------------------------------------------------------------------

    The information required under FERC-592 enables the Commission to 
carry out its legislative mandate under the Natural Gas Act and Natural 
Gas Policy Act and allows the Commission to review/monitor pipeline 
transportation, sales, and storage transactions with its marketing 
affiliates to deter undue discrimination and to take appropriate 
action, where and when necessary. The information is also used by 
others to indicate whether or not there has been discrimination in 
pipeline affiliate/non-affiliate transactions.
    The Commission is submitting notification of these FERC-592 
information requirements to OMB for its review and approval. Interested 
persons may obtain further information by contacting the Federal Energy 
Regulatory Commission, 941 North Capitol Street NE., Washington, D.C. 
20426 [Attention: Michael Miller, Information Services Division, (202) 
208-1415]. Comments on the requirements of the subject final rule may 
also be sent to the Office of Information and Regulatory Affairs, 
Office of Management and Budget, Washington, D.C. 20503 [Attention: 
Desk Officer for Federal Energy Regulatory Commission].

XIV. Effective Date

    The final rule shall take effect August 1, 1994.

List of Subjects

18 CFR Part 161

    Natural gas, Reporting and recordkeeping requirements.

18 CFR Part 250

    Natural gas, Reporting and recordkeeping requirements.

18 CFR Part 284

    Continental shelf, Natural gas, Reporting and recordkeeping 
requirements.

    By the Commission. Commissioner Hoecker concurred in part and 
dissented in part with a separate statement attached.
Lois D. Cashell,
Secretary.

    In consideration of the foregoing, the Commission amends Parts 161, 
250, and 284, Chapter I, Title 18, 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. Section 161.1 is revised to read as follows:


Sec. 161.1   Applicability.

    This part applies to any interstate natural gas pipeline that 
transports gas for others pursuant to subpart A of part 157 of this 
chapter, and subparts B or G of part 284 of this chapter and is 
affiliated in any way with a natural gas marketing or brokering entity 
and conducts transportation transactions with its affiliate. The 
requirements of this part also apply to pipeline sales operating units 
to the extent provided in Sec. 284.286 of this chapter.
    3. Section 161.2 is revised to read as follows:


Sec. 161.2   Definitions.

    (a) Affiliate, when used in reference to any person in this part 
and Sec. 250.16 of this chapter means another person which controls, is 
controlled by, or is under common control with, such person.
    (b) Control (including the terms ``controlling,'' ``controlled 
by,'' and ``under common control with'') as used in this part and 
Sec. 250.16 of this chapter, includes, but is not limited to, the 
possession, directly or indirectly and whether acting alone or in 
conjunction with others, of the authority to direct or cause the 
direction of the management or policies of a company. A voting interest 
of 10 percent or more creates a rebuttable presumption of control.
    (c) Marketing or brokering as used in this part and Sec. 250.16 of 
this chapter means:
    (1) A first sale of natural gas as that term is defined in 
Sec. 270.203 of this chapter, or a sale of natural gas in interstate 
commerce for resale by a seller that is not an interstate pipeline, 
except when:
    (i) The first seller is selling gas solely from its own production; 
or
    (ii) The first seller is selling gas solely from its own gathering 
or processing facilities.
    (2) An off-system sale by an intrastate natural gas pipeline or a 
sale under Sec. 311(b) of the Natural Gas Policy Act as codified in 
Sec. 284.142 of this chapter; or
    (3) An off-system sale by a local distribution company or a sale 
under Sec. 284.224 of this chapter.
    (d) Potential shippers, as used in this part and Sec. 250.16 of 
this chapter, means all current transportation and sales customers of 
an interstate natural gas pipeline, and all persons who have pending 
requests for transportation service or for information regarding 
transportation service on that pipeline.
    (e) Transportation, as used in this part and Sec. 250.16 of this 
chapter, includes storage, exchange, backhaul, displacement, or other 
methods of transportation.
    4. In Sec. 161.3, paragraph (h) is removed, paragraphs (i) through 
(l) are redesignated (h) through (k), and redesignated paragraphs (h) 
and (i) are revised to read as follows:


Sec. 161.3  Standards of conduct.

* * * * *
    (h) If a pipeline offers a transportation discount to a marketing 
affiliate, or offers a discount for a transportation transaction in 
which an affiliate is involved, the pipeline must, contemporaneously 
with the offer:
    (1) Post a notice of the offer on its Electronic Bulletin Board, 
operated pursuant to Sec. 284.8(b)(4) of this chapter, for a period of 
90 days, providing the date of the offer, the discount rate, the 
quantity of gas scheduled to be moved at the discounted rate, the 
delivery points in the offer, any conditions or requirements applicable 
to the offer, and the procedures by which a non-affiliated shipper can 
request a comparable offer. The posting must conform with the 
requirements of Sec. 284.8(b)(4) of this chapter and the pipeline's 
tariff requirements relating to Electronic Bulletin Boards. Access to 
the information must be provided using the same protocols and 
procedures used for the pipeline's Electronic Bulletin Board.
    (2) Provide a comparable discount to all similarly situated non-
affiliated shippers requesting one.
    (i) It must file with the Commission procedures that will enable 
shippers and the Commission to determine how the pipeline is complying 
with the standards in this section.
* * * * *

PART 250--FORMS

    1. The authority citation for Part 250 continues to read as 
follows:

    Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352.

    2. Sec. 250.16 is revised to read as follows:


Sec. 250.16  Format of compliance plan for transportation services and 
affiliate transactions.

    (a) Who must comply. An interstate natural gas pipeline that 
transports natural gas for others pursuant to Subparts B or G of Part 
284 of this chapter and is affiliated, as that term is defined in 
Sec. 161.2 of this chapter, in any way with a natural gas marketing or 
brokering entity and conducts transportation transactions with its 
affiliate must comply with the requirements of this section. The 
requirements of this section also apply to pipeline sales operating 
units to the extent provided in Sec. 284.286 of this chapter.
    (b) Tariff requirements. An interstate pipeline must maintain 
tariff provisions containing the following:
    (1) A complete list of operating personnel and facilities shared by 
the interstate natural gas pipeline and its marketing or brokering 
affiliates, which the pipeline must update and refile with the 
Commission on a quarterly basis to reflect changes occurring during the 
quarter;
    (2) The procedures used to address and resolve complaints by 
shippers and potential shippers including a provision that the pipeline 
will respond within 48 hours and in writing within 30 days to such 
complaints.
    (c) Log of data used to allocate capacity. (1) An interstate 
pipeline that relies upon contract information or other data to 
allocate capacity must maintain a log showing, for each transportation 
contract (both for marketing affiliates and non-affiliates) on its 
system: the shipper's name (including a designation whether the shipper 
is a local distribution company, an interstate pipeline, an intrastate 
pipeline, an end-user, a producer, a marketer, or a pipeline sales 
operating unit); the shipper's affiliation with the pipeline; the 
contract number; and the applicable dates or other information used to 
allocate capacity under its tariff. The log data relating to each 
contract must be maintained as long as the contract is used to allocate 
capacity and for three years after the contract data is no longer used 
for capacity allocation.
    (2) The current log of allocation data for marketing affiliates 
must be posted on the pipeline's Electronic Bulletin Board, operated 
pursuant to Sec. 284.8(b)(4) of this chapter. The posting must conform 
with the requirements of Sec. 284.8(b)(4) of this chapter and the 
pipeline's tariff requirements relating to Electronic Bulletin Boards. 
Access to the information must be provided using the same protocols and 
procedures used for the pipeline's Electronic Bulletin Board.
    (3) The log of affiliate and non-affiliate information must be 
provided to the Commission upon request and must be made available to 
the public under Subpart D of Part 385 of this chapter. When requested 
by the Commission, the information must be provided, within a 
reasonable time, according to the specifications and format contained 
in Form No. 592, which can be obtained at the Federal Energy Regulatory 
Commission, Public Reference and Files Maintenance Branch, 941 North 
Capitol St., N.E., Washington, DC 20426.
    (d) Transportation Discount Information. (1) A pipeline that 
provides transportation service at a discounted rate must maintain, for 
each billing period, the following information: the name of the shipper 
being provided the discount (including a designation whether the 
shipper is a local distribution company, an interstate pipeline, an 
intrastate pipeline, an end-user, a producer, a marketer, or a pipeline 
sales operating unit); the affiliate relationship between the pipeline 
and the shipper; the affiliate's role in the transportation transaction 
(i.e., shipper, marketer, supplier, seller); the duration of the 
discount; the maximum rate or fee; the rate or fee actually charged 
during the billing period; and the quantity of gas scheduled at the 
discounted rate during the billing period for each delivery point. The 
discount information with respect to each transaction must be 
maintained for three years from the date the transaction commences.
    (2) The discount information must be made available to the 
Commission upon request and to the public under Subpart D of Part 385 
of this chapter. When requested by the Commission, the information must 
be provided, within a reasonable time, according to the specifications 
and format contained in Form No. 592, which can be obtained at the 
Federal Energy Regulatory Commission, Public Reference and Files 
Maintenance Branch, 941 North Capitol Street, NE., Washington, DC 
20426.
    (e) Penalty for failure to comply. (1) Any person who transports 
gas for others pursuant to Subparts B or G of Part 284 of this chapter 
and who knowingly violates the requirements of Sec. 161.3, Sec. 250.16, 
or Sec. 284.13 of this chapter will be subject, pursuant to sections 
311(c), 501, and 504(b)(6) of the Natural Gas Policy Act of 1978, to a 
civil penalty, which the Commission may assess, of not more than $5,000 
for any one violation.
    (2) For purposes of this paragraph, in the case of a continuing 
violation, each day of the violation will constitute a separate 
violation.

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. 284.286, paragraph (c) is revised to read as follows:


Sec. 284.286  Standards of conduct for unbundled sales services.

* * * * *
    (c) The pipeline must comply with Secs. 161.3 (a), (b), (d), and 
(k) of this chapter and comply with Secs. 161.3 (c), (e), (f), (g), and 
(h) of this chapter by considering its unbundled sales operating 
employees as an operational unit which is the functional equivalent of 
a marketing affiliate.
* * * * *
    Note--The following appendix will not appear in the Code of 
Federal Regulations. 

Appendix A--Parties Filing Comments on the Notice of Proposed Rulemaking
                         [Docket No. RM94-6-000]                        
------------------------------------------------------------------------
                Commenter                          Abbreviation         
------------------------------------------------------------------------
ANR Pipeline Company and Colorado         ANR/CIG.                      
 Interstate Gas Company.                                                
Arkla Energy Resources Company and        AER/MRT.                      
 Mississippi River Transmission                                         
 Corporation.                                                           
Columbia Gas Transmission Corporation     Columbia.                     
 and Columbia Gulf Transmission Company.                                
CNG Transmission Corporation............  CNG (filed one day late).     
El Paso Natural Gas Company.............  El Paso.                      
Enron Interstate Pipelines (Northern      Enron pipelines.              
 Natural Gas Company, Transwestern                                      
 Pipeline Company, and Florida Gas                                      
 Transmission Company).                                                 
Exxon Corporation.......................  Exxon.                        
Hadson Gas Systems, Inc.................  Hadson.                       
Indicated Parties\77\...................  Indicated parties.            
Interstate Natural Gas Association of     INGAA.                        
 America.                                                               
K N Energy, Inc.........................  K N Energy.                   
Koch Gateway Pipeline Company...........  KGPC.                         
National Fuel Gas Supply Corporation....  National.                     
National Registry of Capacity Rights....  National Registry.            
Natural Gas Pipeline Company of America.  Natural.                      
Pacific Gas and Electric Company........  PG&E.                         
Panhandle Eastern Pipe Line Company,      Panhandle Eastern Pipelines.  
 Texas Eastern Transmission Corporation,                                
 Trunkline Gas Company, and Algonquin                                   
 Gas Transmission Company.                                              
Questar Pipeline Company................  Questar.                      
Tenneco Gas.............................  Tenneco.                      
Texas Gas Transmission Corporation......  Texas Gas.                    
Transcontinental Gas Pipe Line            TGPL.                         
 Corporation.                                                           
Williams Gas Marketing Company..........  WGM.                          
Williams Natural Gas Company and          WNG/Northwest.                
 Northwest Pipeline Corporation.                                        
------------------------------------------------------------------------
\77\Conoco, Inc., Amoco Production Company, Anadarko Petroleum          
  Corporation, Marathon Oil Company, Mobil Natural Gas, Inc., Natural   
  Gas Clearinghouse, Pennzoil Exploration and Production Company,       
  Pennzoil Petroleum Company, Pennzoil Gas Marketing Company, Phillips  
  Petroleum Company, and Union Pacific Fuels, Inc.                      

    Note--The following appendix will not appear in the Code of 
Federal Regulations.

Apendix B

Docket No. RM94-6-000

Form Approved
OMB No. 1902-0157

FERC Form No. 592

Marketing Affiliates of Interstate Pipelines

Record Formats
(Revised June 17, 1994)

    Public reporting burden for this collection of information is 
estimated to average 58 hours per year per respondent, including the 
time for reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and 
reviewing the collection of information. Send comments regarding 
this burden estimate or any other aspect of this collection of 
information, including suggestions for reducing the burden, to each 
of the following:

Michael Miller, Federal Energy Regulatory Commission, 825 North 
Capitol Street NE., Washington, DC 20426;
Office of Information and Regulatory Affairs, Office of Management 
and Budget, Washington, DC 20503, Attention: Desk Officer for the 
Federal Energy Regulatory Commission

Table of Contents

General Information

I Purpose
II Who must Comply
III How to Comply
IV Where to Submit

General Instructions

Schedules: Marketing Affiliates of Interstate Pipelines

(1) Discounted Transportation (Storage) Transaction Record
(2) Capacity Allocation Log Record
(3) The Footnotes Record

General Information

I. Purpose

    The information required is to support the monitoring of 
activities of pipeline marketing affiliates (which includes holders 
of Subpart J of Part 284 blanket sales certificates) so as to deter 
undue discrimination by pipeline companies in favor of marketing 
affiliates, and to prevent any harassment of non-affiliates.

II. Who Must Comply

    An interstate natural gas pipeline that:
     Transports natural gas for others, as that term is 
defined in 18 CFR Sec. 161.2, pursuant to Subparts B or G of Part 
284 of 18 CFR Chapter I and
     Is affiliated, as that term is defined in Sec. 161.2 of 
this chapter, in any way with a natural gas marketing or brokering 
entity and
     Conducts transportation transactions with its affiliate

must maintain the requisite information for transportation service 
as specified in the FERC Form 592 and in the manner prescribed 
herein. The requirements of this part also apply to pipeline sales 
operating units to the extent provided in Sec. 284.286 of this 
chapter.

III. How to Comply

    An interstate pipeline must maintain the required information 
for both firm and interruptible transportation service, and for both 
pipeline affiliates and nonaffiliates, in a computer file(s) 
conforming to the file formats specified in the FERC Form 592. 
Pipelines may submit the FERC Form 592 computer file(s) on 9-track 
tape reel(s), 18-track tape cartridge(s), or on computer 
diskette(s). In addition, the Commission may request that the 
pipeline provide one paper copy of the information submitted in the 
computer file(s) so as to assist Commission staff in interpreting 
the computer file(s).

IV. Where to Submit

    (1) Upon request by the Commission, submissions should be 
addressed to: Office of the Secretary, Federal Energy Regulatory 
Commission, 825 N. Capitol Street NE., Washington, DC 20426.
    (2) Hand deliveries can be made to: Office of the Secretary, 
Federal Energy Regulatory Commission, Room 3110, 825 N. Capitol 
Street NE., Washington, DC 20426.

General Instructions

    1. The notation f(m,n) will be used to denote a numeric string 
of length ``m'' including a decimal (``.'') with ``n'' digits 
following the decimal.
    2. In preparing the required flat file, the following 
conventions must be followed:
    (A) All volumetric data should be stated in MMbtu's (rounded to 
the nearest MMbtu), except where noted.
    (B) All rates should be stated in cents per MMbtu fixed decimal 
numbers, format f(10,2). For example, $1.5264/MMbtu should be stated 
as 152.64.
    (C) Negative values should be reported with a ``-'' sign 
preceding the first nonzero digit reported.
    (D) Commas must not be included in any numeric field.
    (E) All dates should be reported as six digit numerics (month, 
day, year), unless otherwise indicated.
    3. The sequence number is the sequential number assigned to a 
record as it is recorded on a schedule/record. The sequence number 
is incremented as additional records are added to a schedule/record 
and will be between 1 and 999,999, inclusive. (Note: the sequence 
number should be right justified, zero filled.)
    4. The reference number is the alphanumeric string formed by 
concatenation of the Schedule ID, sequence number, and beginning 
character position of the item footnoted. E.g., a respondent's 
Company ID reported in the Discounted Transportation (Storage) 
Transaction Record would have reference number ``D000001008'' formed 
by joining (concatenating) the schedule ID ``D'', the sequence 
number ``000001'', and the beginning character position of the item 
``008''.
    5. Record any footnote relative to any recorded item in the 
``Footnotes Record'', schedule ID `F'. Each footnote should be cross 
referenced to the schedule and record (line) it pertains to by the 
appropriate reference number (see above).
    6. Source of Codes.
    (A) Pipeline Company ID--Use the code for the pipeline as 
contained in the Buyer Seller Code List, U.S. Department of Energy's 
publication DOE/EIA-0176. A code may be obtained by calling EIA at 
(202) 254-5435.
    (B) Contract ID--The respondent's own designation for the 
contract or agreement covering the transaction being reported. This 
identifier will either be assigned by the respondent or the party 
providing a service to the respondent.
    7. A pipeline blanket sales operating unit is any entity 
operating under a Subpart J of Part 284 blanket sales certificate, 
and is considered the functional equivalent of a marketing 
affiliate.
    8. Delivery Point ID--The point at which the pipeline company 
delivers the natural gas to a designated end user, local 
distribution company, etc. as specified by the transportation 
service requested. The respondent will provide a unique 20-byte 
alphanumeric identifier for each delivery point on his pipeline 
system. This delivery point ID will be the alphanumeric label/name 
which the respondent uses in conducting his daily business, (or a 
unique abbreviation thereof if the company identifier is more than 
20 characters in length.)
    9. Maximum Rate for Transportation Service--The maximum rate 
contained in the respondent's currently effective tariff for the 
rate schedule under which the transportation service is being 
conducted.
    10. Discounted Rate for Transportation Service--A rate that is 
less than the maximum rate on file with the Commission.

Schedules

Marketing Affiliates of Interstate Pipelines

Definitions of Items and File Layout for the Marketing Affiliates of 
Interstate Pipelines FERC Form No. 592

    This form will consist of three record formats:

1. Discounted Transportation (Storage) Transaction Record
2. Capacity Allocation Log Record
3. Footnotes Record

                             Discounted Transportation (Storage) Transaction Record                             
    [Instructions: This record is maintained for each delivery point actually used during the billing period    
               recorded. Only transportation transactions actually discounted should be recorded]               
----------------------------------------------------------------------------------------------------------------
 Item                                       Character                                                           
 No.                  Item                  position      Data type                      Comments               
----------------------------------------------------------------------------------------------------------------
1....  Schedule ID........................      1      Character.......  Enter `D'.                             
2....  Sequence number....................    2-7      Numeric.........  Right justified, zero filled, see      
                                                                          general instruction 3.                
3....  Company ID.........................   8-13      Numeric.........  Reporting pipeline code, from buyer/   
                                                                          seller code list, see general         
                                                                          instruction 6(A).                     
4....  Contract ID........................  14-21      Character.......  See general instruction 6(B).          
5....  Shipper............................  22-61      Character.......  Name of the shipper receiving service. 
6....  Pipeline affiliation with shipper..     62      Character.......  Code=Y, respondent affiliated with     
                                                                          shipper;                              
                                                                         Code=N, respondent not affiliated with 
                                                                          shipper.                              
7....  Shipper type.......................     63      Character.......  Code=1, LDC/distributor;               
                                                                         Code=2, interstate pipeline;           
                                                                         Code=3, intrastate pipeline;           
                                                                         Code=4, end user;                      
                                                                         Code=5, producer;                      
                                                                         Code=6, marketer;                      
                                                                         Code=7, pipeline sales operating unit; 
                                                                         Code=8, other, (specify in footnote).  
8....  Affiliate name.....................  64-103     Character.......  name of the pipeline affiliate involved
                                                                          in the transportation/storage service 
                                                                          being provided; if more than one      
                                                                          affiliate is involved in the service, 
                                                                          provide name(s) in a footnote         
9....  Role of affiliate..................    104      Character.......  Affiliates role in the transportation/ 
                                                                          storage service is:                   
                                                                         Code=1, shipper;                       
                                                                         Code=2, marketer;                      
                                                                         Code=3, supplier;                      
                                                                         Code=4, seller;                        
                                                                         Code=5, buyer;                         
                                                                         Code=6, agent;                         
                                                                         Code=7, end user;                      
                                                                         Code=8, no affiliate involved          
                                                                         Code=9, other, (identify role in a     
                                                                          footnote).                            
10...  Is affiliate a pipeline blanket        105      Character.......  Code=Y, yes;                           
        sales operating unit of the                                      Code=N, no.                            
        Respondent?.                                                                                            
11...  Type of service....................  106-107    Character.......  Code=FT, firm transportation;          
                                                                         Code=IT, interruptible transportation; 
                                                                         Code=SC, storage capacity;             
                                                                         Code=SI, storage injection;            
                                                                         Code=SW, storage; withdrawal.          
12...  Delivery point ID..................  108-127    Character.......  See general instruction 8              
13...  Billing period start date..........  128-133    Numeric.........  (mmddyy) month, day, and year for start
                                                                          of billing period                     
14...  Billing period end date............  134-139    Numeric.........  (mmddyy) month, day, and year for end  
                                                                          of billing period                     
15...  Duration of discount...............  140-141    Numeric.........  number of days in the billing period   
                                                                          the discount was provided             
16...  Maximum rate for transportation      142-151    Numeric.........  (cents/MMbtu); maximum effective rate/ 
        service.                                                          fee currently on file with the        
                                                                          Commission for the service provided;  
                                                                          format f(10,2); e.g., 35.62 cents is  
                                                                          reported as ``35.62''; see general    
                                                                          instruction 9.                        
17...  Discounted rate for transportation   152-161    Numeric.........  (cents/MMbtu); actual rate/fee         
        service.                                                          collected for the transportation      
                                                                          service rendered; format f(10,2);     
                                                                          e.g., 32.15 cents is reported as      
                                                                          ``32.15''; do not report a negative   
                                                                          value; see general instruction 10.    
18...  Volume transported.................  162-172    Numeric.........  (MMbtu); volume of gas transported at  
                                                                          the discounted rate.                  
19...  Footnote...........................    173      Character.......  Code=Y, footnote is provided for this  
                                                                          record;                               
                                                                         Code=N, no footnote provided.          
----------------------------------------------------------------------------------------------------------------


                                         Capacity Allocation Log Record                                         
----------------------------------------------------------------------------------------------------------------
 Item                                       Character                                                           
 No.                  Item                  position      Data type                     Comments                
----------------------------------------------------------------------------------------------------------------
1....  Schedule ID........................      1      Character.......  Enter `C'.                             
2....  Sequence Number....................    2-7      Numeric.........  Right justified, zero filled, see      
                                                                          general instruction 3.                
3....  Company ID.........................   8-13      Numeric.........  Reporting pipeline code, from buyer/   
                                                                          seller code list, see general         
                                                                          instruction 6(A).                     
4....  Contract ID........................  14-21      Character.......  See general instruction 6(B).          
5....  Shipper............................  22-61      Character.......  Name of the shipper receiving service. 
6....  Pipeline affiliation with shipper..     62      Character.......  Code=Y, respondent affiliated with     
                                                                          shipper;                              
                                                                         Code=N, respondent not affiliated with 
                                                                          shipper.                              
7....  Shipper type.......................     63      Character.......  Code=1, LDC/distributor;               
                                                                         Code=2, interstate pipeline;           
                                                                         Code=3, intrastate pipeline;           
                                                                         Code=4, end user;                      
                                                                         Code=5, producer;                      
                                                                         Code=6, marketer;                      
                                                                         Code=7, pipeline sales operating unit; 
                                                                         Code=8, other, (specify in footnote).  
8....  Type of service....................  64-65      Character.......  Code=FT, firm transportation;          
                                                                         Code=IT, interruptible transportation; 
                                                                         Code=SC, storage capacity'             
                                                                         Code=SI, storage injection;            
                                                                         Code=SW, storage withdrawal.           
9....  Text...............................  66-197     Character.......  Enter the applicable dates or other    
                                                                          information used to allocate capacity.
10...  Footnote...........................    198      Character.......  Code=Y, footnote is provided for this  
                                                                          record;                               
                                                                         Code=N, no footnote provided.          
----------------------------------------------------------------------------------------------------------------


                                              The Footnotes Record                                              
----------------------------------------------------------------------------------------------------------------
 Item                                       Character                                                           
 No.                  Item                  position      Date type                     Comments                
----------------------------------------------------------------------------------------------------------------
1....  Schedule ID........................      1      Character.......  Enter `F'.                             
2....  Sequence Number....................    2-7      Numeric.........  Right justified, zero filled, see      
                                                                          general instruction 3.                
3....  Company ID.........................   8-13      Numeric.........  Reporting pipeline code, from buyer/   
                                                                          seller code list, see general         
                                                                          instruction 6(A).                     
4....  Reference Number...................  14-23      Numeric.........  Reference number for record being      
                                                                          footnoted. See general instruction 4. 
5....  Footnote Text......................  24-155     Character.......                                         
----------------------------------------------------------------------------------------------------------------

Standards of Conduct and Reporting Requirements for Transportation and 
Affiliate Transactions--Docket No. RM94-6-000

(Issued June 17, 1994)

Hoecker, Commissioner, concurring in part and dissenting in part:

    Today I concur that the time has come to cut the regulatory 
burden associated with the marketing affiliate rules, particularly 
the filing and record maintenance requirements tentatively adopted 
six years ago to ensure an equitable transition to competition among 
independent and pipeline-affiliated marketers. My colleagues and I 
disagree only in part and that disagreement is surely a matter of 
degree, not principle.
    I support the retention of the modestly revised Standards of 
Conduct applicable to pipeline relationships with marketing 
affiliates because, under these circumstances, they impose a useful 
and relatively light-handed transactional discipline on these 
relationships and help guarantee fair play and equal information in 
the marketplace.
    I nevertheless think the retention of the reporting and records 
maintenance requirements in revised FERC Form No. 592 is excessive 
and unnecessary.1 I am inclined to think it demonstrates an 
unhappy tendency to which we all occasionally fall prey in a 
bureaucratic culture: assumptions and requirements, once adopted, 
tend to perpetuate themselves beyond their useful lives. As Vice 
President Gore's National Performance Review observes:
---------------------------------------------------------------------------

    \1\FERC Form No. 592 is codified in section 250.16 of the 
Commission's regulations. If this form were eliminated, I believe 
certain of the other requirements contained in section 250.16 (such 
as the requirement to include specified information in the tariff) 
could be transferred to the Standards of Conduct to allow for 
complete recision of section 250.16.
---------------------------------------------------------------------------

    The federal government does at least one thing well: It 
generates red tape. But not one inch of that red tape appears by 
accident. In fact, the government creates it all with the best of 
intentions. It is time now to put aside our reverence for those good 
intentions and examine what they have created--a system that makes 
it hard for our civil servants to do what we pay them for, and 
frustrates taxpayers who rightfully expect their money's 
worth.2
---------------------------------------------------------------------------

    \2\Creating a Government that Works Better & Costs Less, Report 
of the National Performance Review, 1993, p. 11.
---------------------------------------------------------------------------

    This might strike my readers as rhetorical overkill as applied 
to this case, given the best of intentions that underlies today's 
decision to retain the reporting requirements and FERC Form No. 592. 
After all, the rule claims (somewhat inexplicably) that on average 
they will require only 60 workhours from each company per year. Yet, 
the continuation of these recordkeeping requirements is not, in my 
estimation, supported by any strong evidence of need. I find no 
significant numbers or patterns of complaints alleging that 
pipelines have favored affiliates. There is virtually no evidence of 
industry interest in these data. In fact, in one of the few 
pleadings in this case that offers more than opinion, a major 
pipeline system indicates that its Order No. 497 log was accessed 
only an average of 2-3 times monthly since 1990, with a significant 
portion of those calls (up to 50 percent at times) coming from 
Commission staff. The rule was not designed to generate discounting 
data for rate cases. Nor was it formulated as a device to obviate 
discovery in rare complaint cases. The need for these data is, 
therefore, highly conjectural.
    In the final analysis, it is clear that the majority wants to 
retain this small part of the Code of Federal Regulations ``just in 
case.'' And, by eliminating the sunset date, it is likely that FERC 
Form No. 592 will linger in regulatory perpetuity. In my opinion, 
the cost (however small) to the industry and ultimately to 
ratepayers of continuing any part of this recordkeeping requirement 
is greater than any probable benefit.
    Therefore, I dissent from that aspect of the rule that continues 
FERC Form No. 592.
James J. Hoecker,
Commissioner.
[FR Doc. 94-15372 Filed 6-24-94; 8:45 am]
BILLING CODE 6717-01-P