[Federal Register Volume 60, Number 110 (Thursday, June 8, 1995)]
[Rules and Regulations]
[Pages 30186-30188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14012]



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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 284

[Docket No. RM95-5-001; Order No. 577-A]


Release of Firm Capacity on Interstate Natural Gas Pipelines

Issued May 31, 1995.
AGENCY: Federal Energy Regulatory Commission; Energy.

ACTION: Final rule; order granting rehearing.

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SUMMARY: The Federal Energy Regulatory Commission is amending its 
capacity release regulations, which permit shippers to release capacity 
without having to comply with the Commission's advance posting and 
[[Page 30187]] bidding requirements. The current regulation permits 
such releases for a full calendar month. The Commission is revising the 
regulation to permit exempt releases for up to 31 days in order to 
accommodate releases crossing calendar months.

EFFECTIVE DATE: The final rule becomes effective July 10, 1995.

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 19200, 14400, 12000, 9600, 7200, 4800, 2400, 1200, or 
300 bps, full duplex, no parity, 8 data bits, and 1 stop bit. The full 
text of this document will be available on CIPS for 60 days from the 
date of issuance in ASCII and WordPerfect 5.1 format. After 60 days the 
document will be archived, but still accessible. 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.

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

Order Granting Rehearing

    On May 1, 1995, Great Lakes Gas Transmission Limited Partnership 
(Great Lakes) filed a request for rehearing and clarification of Order 
No. 577, issued March 29, 1995.\1\ For the reasons discussed below, the 
Federal Energy Regulatory Commission (Commission) will grant rehearing 
and revise Sec. 284.243(h) of its regulations.

    \1\ Release of Firm Capacity on Interstate Natural Gas 
Pipelines, Order No. 577, 60 FR 16979 (Apr. 4, 1995), III FERC 
Stats. & Regs. Preambles para. 31,017 (Mar. 29, 1995).
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Background

    In Order No. 577, the Commission revised Sec. 284.243(h) of its 
capacity release regulations to promote a more effective and efficient 
capacity release mechanism as well as reduce administrative burdens. 
The prior regulations permitted shippers to release their firm capacity 
for less than one calendar month without having to comply with the 
Commission's requirements to post release offers for bidding. In Order 
No. 577, the Commission extended the advance posting and bidding 
exception to one full calendar month to comport with the industry's 
practice of making gas and capacity decisions on a calendar month basis 
and to reduce administrative burdens resulting from the use of so-
called ``29/1'' day deals to effectuate full month releases.
    Great Lakes seeks rehearing or clarification as to whether the 
Commission intended to exempt short term capacity release transactions 
spanning two calendar months from the bidding requirements. Great Lakes 
states that, in its restructuring proceeding under Order No. 636, the 
Commission required Great Lakes to permit an exception from its bidding 
requirements for short-term capacity releases of less than 30 days that 
extended over parts of two months.\2\ Great Lakes argues that in the 
March 29, 1995 order in this rulemaking docket, the Commission seemed 
to adopt a different approach to short-term releases spanning two 
calendar months.

    \2\ Great Lakes Gas Transmission Limited Partnership, 64 FERC 
para. 61,017 at 61,171 (1993).
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    Great Lakes points to the Commission's rejection of a request by a 
commenter that the regulation refer to releases of 31 days, rather than 
to a calendar month, in order to permit releases of 31 days spanning 
two calendar months (i.e., January 15 to February 15). The Commission 
found that limiting the exception to a calendar month synchronized the 
short-term exception with the industry's practice of purchasing gas and 
capacity on a monthly basis. The Commission further concluded that 
substitution of the phrase ``31 days'' was not needed to effectuate 
mid-month releases. Great Lakes points out that this procedure is not 
only inconsistent with its tariff, but is burdensome because it entails 
two postings and two separate contracts.

Discussion

    The Commission's restructuring orders were inconsistent in 
interpreting whether releases crossing calendar months were 
permissible.\3\ To ensure that this rule does not limit flexibility 
shippers already possess, the Commission will revise the language of 
the regulation to substitute ``31 days'' for ``calendar month.'' This 
will permit parties to execute releases of up to 31 days without 
complying with the Commission's advance posting and bidding 
requirements. This revision will increase shipper flexibility and also 
reduce administrative burdens by eliminating the need for one bid, two 
postings, and two contracts in order to consummate short-term releases 
across calendar months.

    \3\ Compare Northwest Pipeline Corporation, 63 FERC para. 61,124 
at 61,803 (1993); Kern River Gas Transmission Company, 62 FERC para. 
61,191 at 62,270 (1993) (no cross month releases) with Great Lakes 
Gas Transmission Limited Partnership, 64 FERC para. 61,017 at 61,171 
(1993); Columbia Gas Transmission Corporation, 64 FERC para. 61,060 
at 61,530 (1993) (permitting cross month releases).
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Effective Date

    The final rule will take effect July 10, 1995.

List of Subjects in 18 CFR Part 284

    Continental shelf, Natural gas, Reporting and recordkeeping 
requirements.

    By the Commission.
Linwood A. Watson, Jr.,
Acting Secretary.

    In consideration of the foregoing, the Commission amends Part 284, 
Chapter I, Title 18, Code of Federal Regulations, as set forth below.

PART 284--CERTAIN SALES AND TRANSPORTATION OF NATURAL GAS UNDER THE 
NATURAL GAS POLICY ACT OF 1978 AND RELATED AUTHORITIES

    1. The authority citation for Part 284 continues to read as 
follows:

    Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C 7101-7532; 43 
U.S.C 1331-1356.

    2. In Sec. 284.243, paragraph (h)(1) is revised to read as follows:


Sec. 284.243  Release of firm capacity on interstate pipelines.

* * * * *
    (h)(1) A release of capacity by a firm shipper to a replacement 
shipper for any period of 31 days or less, or for any term at the 
maximum tariff rate applicable to the release, need not comply with the 
notification and bidding requirements of paragraphs (c) through (e) of 
this section. A release under this paragraph may not exceed the maximum 
rate. Notice of a firm release under this paragraph must be provided on 
the [[Page 30188]] pipeline's electronic bulletin board as soon as 
possible, but not later than forty-eight hours, after the release 
transaction commences.
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[FR Doc. 95-14012 Filed 6-7-95; 8:45 am]
BILLING CODE 6717-01-P