[Federal Register Volume 61, Number 144 (Thursday, July 25, 1996)]
[Rules and Regulations]
[Pages 38565-38567]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18899]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 61, No. 144 / Thursday, July 25, 1996 / Rules
and Regulations
[[Page 38565]]
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 154
[Docket No. RM95-3-002; Order No. 582]
Filing and Reporting Requirements for Interstate Natural Gas
Company Rate Schedules and Tariffs
Issued July 19, 1996.
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Final rule; order on clarification.
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SUMMARY: The Federal Energy Regulatory Commission is issuing an order
clarifying Order No. 582, the final rule amending part 154 of the
Commission's regulations under the Natural Gas Act. Pursuant to Order
No. 582, two working groups were established to resolve electronic
filing issues. The order on clarification makes clear that formulas
contained in an electronic filing must be manipulable; it also
clarifies that if there are no underlying software ``links'' used to
develop a spreadsheet, links need not be created for a filing.
EFFECTIVE DATE: July 19, 1996.
FOR FURTHER INFORMATION CONTACT: Richard A. White, Office of the
General Counsel, Federal Energy Regulatory Commission, 888 First
Street, N.E., Washington, DC 20426, (202) 208-0491.
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 at 888 First Street, N.E.,
Washington, DC 20426.
The Commission Issuance Posting System (CIPS), an electronic
bulletin board service, provides access to the texts of formal
documents issued by the Commission. CIPS is available at no charge to
the user and may be accessed using a personal computer with a modem by
dialing (202) 208-1397 if dialing locally or 1-800-856-3720 if dialing
long distance. To access CIPS, set your communications software to use
19200, 14400, 12000, 9600, 7200, 4800, 2400, or 1200bps, full duplex,
no parity, 8 data bits, and 1 stop bit. The full text of this document
will be available on CIPS indefinitely in ASCII and WordPerfect 5.1
format for one year. 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 the Public Reference Room at
888 First Street, N.E., Washington, DC 20426.
Before Commissioners: Elizabeth Anne Moler, Chair; Vicky A.
Bailey, James J. Hoecker, William L. Massey, and Donald F. Santa,
Jr.
Filing and Reporting Requirements for Interstate Natural Gas
Company Rate Schedules and Tariffs
Docket No. RM95-3-002
Order on Clarification
Issued July 19, 1996.
This order responds to requests for clarification of Order No. 582
1 filed by Associated Gas Distributors (AGD) and The Process Gas
Consumer Group, the America Iron and Steel Institute, and the Georgia
Industrial Group (Industrials).2
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\1\ Filing and Reporting Requirements for Interstate Natural Gas
Companies Rate Schedules and Tariffs, Order No. 582, 60 FR 52960
(October 11, 1995), II FERC Stats. & Regs. para. 19,100-19,183
(1995) (regulatory text), III FERC Stats. & Regs. para. 31,025
(1995) (preamble).
\2\ The Industrials further request that the Commission give
additional directions to the Working Group, as may be required in
light of these clarifications.
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I. Background
Order No. 582 updated procedural rules governing the form and
composition of interstate natural gas pipeline tariffs and the filing
of rates and charges for the transportation of natural gas in
interstate commerce under sections 4 and 5 of the Natural Gas Act (NGA)
and section 311 of the Natural Gas Policy Act. Among other things,
Order No. 582 directed Commission staff to convene informal conferences
with natural gas industry members to resolve outstanding electronic
filing issues. Two working groups were established--one to complete
work on Form Nos. 2, 2A and 11 and one to complete work on rate case
filings. The working groups met on December 1 and 12, 1995, February 7,
1996 and February 8, 1996.
Questions have arisen in the working groups concerning the use of
``password protection'' 3 and ``links.'' 4
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\3\ Present technology allows formulas used in preparing a rate
filing to be embedded into the electronic file such that a user may
have the software perform the calculations using alternate factors.
Spreadsheet software also commonly provides the option of assigning
password protection to a file. Such protection allows subsequent
users without the password to have ``read only'' access to the file;
that is, the subsequent user is able to read the file and view
formulas, but cannot modify or copy the file.
\4\ A link is a software feature that allows a user to insert or
adjust an item once and have the new or adjusted item automatically
inserted in other designated locations.
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II. Password Protection
AGD requests clarification that (1) in requiring pipelines to file
native spreadsheet formats with links and formulas, the Commission
intended to provide pipeline customers and other interested parties
with a useful tool to fully analyze the pipeline's filing, and (2) any
efforts by the pipelines to undermine this intent--such as the use of
password protection to limit the usefulness of electronic data--are
prohibited as inconsistent with the Commission's orders.
The Industrials request clarification that Statements H, I and J be
fully accessible to the public, with spreadsheet formulas and links
intact. Also, the Industrials request clarification that the issue of
password protection (or any other form of security) was intended to be
addressed by the Working Group on Filings, not as a means to block such
public access to the data and formulas, but to ensure public
participation in rate cases while accommodating the legitimate needs of
pipelines to ensure the security of confidential data and the integrity
of the formulas.
a. Positions of Participants
The issue presented here is whether Order No. 582 requires that the
formulas contained in the electronic filing be mere readable symbols,
as in a hard
[[Page 38566]]
copy, or should be manipulable such that pipeline customers or other
interested parties may analyze such files by inserting different
factors. That is, does Order No. 582 provide for an electronic tool for
analyzing the pipeline's filing that is not provided by the hard copy.
Industrials state that password protection must be discussed in
terms of balancing the pipeline's need for security and the public's
right to utilize the spreadsheet formulas and data. Industrials argue
that only such balancing will ensure meaningful public participation in
pipeline rate cases.
Industrials argue that the password protection issue was delegated
to the Working Groups to determine how the pipeline's legitimate desire
to prevent the release of confidential data and to protect the
integrity of formulas could be accommodated in the Commission's rule
allowing full accessibility to the data and formulas. Industrials point
out that the Commission explained that the electronic filing could
always be checked against the paper copy filed by the pipeline for
security purposes to ensure that the filing's data and formulas have
not been tampered with.5
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\5\ III FERC Stats. & Regs. at 31,437.
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Industrials state that the ready electronic availability of
spreadsheet data and formulas will greatly ease the burden on
intervenors to analyze a pipeline's rate filing. Because intervenors
and protestors face a short period within which to file interventions
and protests, Industrials state that such facilitation is necessary to
allow the interventions and protests to be meaningful.6 Unless the
filed spreadsheet data is served in a manipulable version, intervenors
will still have to re-input the data and formulas themselves.
Industrials state that this task is extremely time-consuming and would
lead to continued delays in analysis and development of positions.
Industrials state that intervenors would be deprived of the opportunity
to bring matters to the attention of the Commission in their
interventions, which matters might be capable of summary disposition in
the suspension order or other fast track decision making. Further,
Industrials state, re-inputting data almost inevitably will lead to the
introduction of errors. This is expensive and redundant. Industrials
state that, unless a non-password protected version of all spreadsheet
data is served on all parties as part of the original filing, most of
the time savings and efficiency gains achieved by the Commission's
orders will be undermined.
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\6\ In light of the short time period in which the Commission
and interested parties have to review the filing, several items have
been added to speed processing of the filing and minimize additional
requests for information. III FERC Stats. & Regs. at 31,388.
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The Industrials state that, though the pipelines need to file a
fixed version of spreadsheet data that conforms to the paper copy to
ensure the accuracy of the data and integrity of the formulas, a
blanket denial of access to the data and formulas is not the solution.
Industrials state that one solution is to require the filing of two
sets of electronic spreadsheet data and formulas: One set password-
protected for security purposes, and the other, without such password
protection, available to the public for use in evaluating the filing.
Industrials state that its proposed solution balances the interests of
all parties involved.
AGD argues that if a pipeline imposes password protection on its
electronic rate filings, such files will be of value only in
understanding the logic underlying the pipeline's proposed rate design.
AGD states that such files will not allow the pipeline's customers or
other interested parties to fully analyze such files or even to copy
data.
b. Discussion
The aspect of ``protecting'' data was discussed in two sections of
Order No. 582. In the section titled ``Dissemination of Data by the
Commission,'' the Commission stated:
Password protection or other forms of security should be
discussed at the conference. However, as long as a paper copy is
available, there is a reliable way to check the accuracy of the
electronic data. Both the electronic data and the paper version of
the filing are part of the official filing and should contain the
same information.7
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\7\ III FERC Stats. & Regs. at 31,437.
In the section titled ``Appropriate Format for Numeric Data,'' the
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Commission stated:
One of the stated goals of the conference was to ensure that all
spreadsheets contain the underlying formulas and links. Delimited
formats are not capable of transmitting formulas and equations. The
Commission agrees with the parties arguing for a spreadsheet format
where the formulas in the workpaper or statement are important to
the understanding of the pipeline's filing. To be useful, the data,
required in subpart D, by Statements I and J and the state tax
formulations in Statement H, must be received with the formulas
included. These formulas are necessary to understand the pipeline's
position with respect to cost allocation and rate design. In section
4 rate cases, the Commission has routinely obtained the formulas
through data requests asking that the information be in spreadsheet
form. The requirement that the initial filing be in spreadsheet
format avoids the burden of having the same data submitted once as a
tab delimited file and again, in response to a data request, in
spreadsheet form, in order to capture the formulas. Accordingly,
Statements I and J and a portion of H, containing state tax
formulations submitted pursuant to subpart D, must be filed in the
same format generated by the spreadsheet software used to create the
statement or workpaper. These spreadsheets must include all the
formulas and all links to other spreadsheets filed in the same rate
case.8
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\8\ III FERC Stats. & Regs. at 31,435.
The first passage above clearly directs staff to develop ways to
assure the accuracy of data filed electronically: to protect against
the accidental or intentional alteration of a filing. However, when the
Commission grants confidential treatment of data, the data must not be
made public and must not be in the public electronic data bases.
Methods for maintaining the confidentiality of information filed
electronically for which confidential treatment has been sought and
granted must be addressed at future meetings.
The Industrials' discussion of the need for non-password protected
files to achieve time-saving and efficiency is consistent with the
purposes of Order No. 582. The formulas are critical for Staff and
intervenors to understand the pipeline's position on cost allocation
and rate design.9 The Commission intended that spreadsheet data,
and underlying formulas and links to other spreadsheets, be accessible
to the public. In Order No. 582, the Commission agreed with parties
that having PC-compatible spreadsheet files with formulas and linkages
intact available to customers and intervenors will speed the processing
of rate cases and allow many issues to be resolved in the suspension
order.10 Requiring parties, including staff, to input all the
figures from the rate case and spend weeks and rounds of discovery to
recreate the pipeline's computations is grossly inefficient and unduly
burdensome. Receiving the rate case in a manipulable format is critical
given the 12-day period for comment and protest.
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\9\ III FERC Stats. & Regs. at 31,435.
\10\ III FERC Stats. & Regs. at 31,434-5.
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The Commission clarifies its intent to utilize the electronic
format to facilitate more efficient and speedy analyses of rate filings
by requiring that all formulas be manipulable as described herein.
III. Links
As noted above, Order No. 582 requires pipelines to submit their
filings in native spreadsheet format with links
[[Page 38567]]
and formulas. The issue has been raised as to whether a pipeline that
prepares two separate files for a Statement, without links between such
files (perhaps because the two files were prepared by different
individuals) must, nonetheless, create such links for the filing.
AGD states that by separating a filing (e.g., Statements J and K)
into multiple files, pipelines would minimize the usefulness of such
information and deprive interested parties of the ability to engage in
meaningful analysis. AGD requests clarification that pipelines cannot
avoid the requirements of Order No. 582--in particular, the requirement
that pipelines must submit rate filings in native spreadsheet format
with links and formulas--by submitting the relevant information in
separate files without links.
The Commission does not agree with AGD that the absence of such
links will deprive interested parties of the ability to engage in
meaningful analysis. Upon examination, a reviewer will be able to
locate links between two or more spreadsheets whether or not the link
is electronic. If there is no direct link between two spreadsheets
showing progressive calculations, an explanation of the relationship
between the two spreadsheets is required.11 The reviewer's
analysis will not be significantly compromised because two spreadsheets
showing progressive calculations are not linked electronically.
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\11\ Section 154.201(b)(5) requires that ``[w]here workpapers
show progressive calculations, any discontinuity between one working
paper and another must be explained.''
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A pipeline must support its rate adjustments with step-by-step
mathematical calculations accompanied by narrative explanations
sufficient to permit the Commission and interested parties to duplicate
the company's calculations.12 This may be done, in part, by
placing links in the spreadsheets or it may be done other ways. AGD has
provided insufficient reasons for limiting the pipelines' options when
complying with the regulations.
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\12\ 18 CFR 154.201(b)(2).
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If a pipeline creates a link in the preparation of its rate filing,
that link may not be severed prior to submitting the rate filing to the
Commission. The Commission strongly encourages the use of electronic
links. However, the Commission clarifies that if there are no
underlying links used to develop the spreadsheet, as in the example
above, links need not be created for the filing.
The Commission orders:
The requests for clarification of Order No. 582, the final rule
issued in this docket on September 28, 1995, are granted and denied as
discussed in the text of this order.
By the Commission.
Lois D. Cashell,
Secretary.
[FR Doc. 96-18899 Filed 7-24-96; 8:45 am]
BILLING CODE 6717-01-P