[Federal Register Volume 62, Number 79 (Thursday, April 24, 1997)]
[Rules and Regulations]
[Pages 19921-19923]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-10607]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 284

[Docket No. RM96-1-006; Order No. 587-D]


Standards For Business Practices Of Interstate Natural Gas 
Pipelines

    Issued April 18, 1997.

AGENCY: Federal Energy Regulatory Commission, Energy.

ACTION: Final rule; Order denying rehearing.

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SUMMARY: The Federal Energy Regulatory Commission is denying requests 
for rehearing of the dates for complying with the requirements of Order 
No. 587-C (62 FR 10684). Order No. 587-C incorporated by reference 
standards promulgated by the Gas Industry Standards Board which require 
interstate pipelines to post information on World Wide Web homepages 
and to comply with new and revised business practices procedures. These 
business practices standards supplement standards adopted by the 
Commission in Order No. 587. (61 FR 39053, July 26, 1996).

DATES: Effective: April 18, 1997. Pipelines are to make pro forma 
tariff

[[Page 19922]]

filings to implement the business practices standards by May 1, 1997. 
Implementation of the Internet Web page standards must take place by 
August 1, 1997, and the revised and new business practices standards by 
November 1, 1997.

ADDRESSES: Federal Energy Regulatory Commission, 888 First Street, 
N.E., Washington DC, 20426.

FOR FURTHER INFORMATION CONTACT:
Michael Goldenberg, Office of the General Counsel, Federal Energy 
Regulatory Commission, 888 First Street, NE, Washington, DC 20426, 
(202) 208-2294;
Marvin Rosenberg, Office of Economic Policy, Federal Energy Regulatory 
Commission, 888 First Street, N.E., Washington, DC 20426, (202) 208-
1283;
Kay Morice, Office of Pipeline Regulation, Federal Energy Regulatory 
Commission, 888 First Street, N.E., Washington, DC 20426, (202) 208-
0507.

SUPPLEMENTARY INFORMATION: In addition to publishing the full text of 
this document in the Federal Register, the Commission provides all 
interested persons an opportunity to inspect or copy the contents of 
this document during normal business hours in Room 2A, 888 First 
Street, N.E., Washington D.C. 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 1-800-856-3920 if dialing 
long distance. To access CIPS, set your communications software to 
19200, 14400, 12000, 9600, 7200, 4800, 2400, or 1200 bps, full duplex, 
no parity, 8 data bits and 1 stop bit. The full text of this order will 
be available on CIPS in ASCII and WordPerfect 5.1 format. CIPS user 
assistance is available at 202-208-2474.
    CIPS is also available on the Internet through the Fed World 
system. Telnet software is required. To access CIPS via the Internet, 
point your browser to the URL address: http://www.fedworld.gov and 
select the ``Go to the FedWorld Telnet Site'' button. When your Telnet 
software connects you, log on to the FedWorld system, scroll down and 
select FedWorld by typing: 1 and at the command line and type: /go 
FERC. FedWorld may also be accessed by Telnet at the address 
fedworld.gov.
    Finally, the complete text on diskette in WordPerfect format may be 
purchased from the Commission's copy contractor, La Dorn Systems 
Corporation. La Dorn Systems Corporation is 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.

Order Denying Rehearing

    On April 3, 1997, the Interstate Natural Gas Association of America 
(INGAA) and Colorado Interstate Gas Company and Wyoming Interstate 
Company, Ltd., jointly (CIG/WIC), filed for rehearing of Order No. 587-
C.1 These rehearing requests focus only on the time schedule 
for implementation of the standards, not the substance of the 
standards. For the reasons discussed below, the rehearing requests are 
denied.
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    \1\ Order No. 587-C, 62 FR 10684 (Mar. 10, 1997), 78 FERC para. 
61,231 (Mar. 4, 1997).
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Background

    In Order Nos. 587 and 587-B,2 the Commission 
incorporated by reference 140 consensus standards developed by the Gas 
Industry Standards Board (GISB) covering certain industry business 
practices--Nominations, Flowing Gas, Invoicing, and Capacity Release--
as well as adopting protocols and procedures for exchanging these 
business transaction documents over the Internet. Implementation of 
these standards follows a staggered schedule beginning April 1, 1997 
and ending June 1, 1997.
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    \2\ Standards for Business Practices of Interstate Natural Gas 
Pipelines, Order No. 587, 61 FR 39053 (Jul. 26, 1996), III FERC 
Stats. & Regs. Regulations Preambles para. 31,038 (Jul. 17, 1996), 
reh'g denied, Order No. 587-A, 61 FR 55208 (Oct. 25, 1996), 77 FERC 
para. 61,061 (Oct. 21, 1996), Order No. 587-B, 62 FR 5521 (Feb. 6, 
1997), III FERC Stats. & Regs. Regulations Preambles para. 31,046 
(Jan. 30, 1997).
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    In Order No. 587-C, the Commission incorporated by reference 27 
GISB business practices standards that revised and supplemented the 
standards adopted in Order No. 587 as well as one new communication 
standard. GISB proposed that the communication standard be implemented 
August 1, 1997 and that pipeline tariff filings to comply with the 
business practices standards be made in a staggered schedule in May, 
June, and July of 1997, with implementation on November 1, 1997.
    GISB had proposed two new communication standards, Standards 4.3.5 
and 4.3.6, which would require pipelines to provide certain information 
on an Internet World Wide Web homepage (homepage) and to provide for 
downloads of the information in a specified file structure.3 
The Commission adopted the standard requiring posting on World Wide Web 
pages to be effective August 1, 1997, but declined to adopt the 
standard requiring file downloads in a specified electronic structure, 
because GISB had not yet specified the structure. The Commission stated 
that, if GISB adopted standards for the downloadable file formats 
quickly, the standards could still be implemented by August 1, 1997.
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    \3\ This information includes notices (critical notices, 
operation notices, system-wide notices); Order No. 566 affiliated 
marketer information (affiliate allocation log, discount postings); 
operationally available and unsubscribed capacity; Index of 
Customers; and the pipeline's tariff.
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    With respect to implementation of the 27 supplemental business 
practices standards, the Commission modified GISB's recommended 
compliance schedule by requiring all pipelines to make their pro forma 
tariff filings by May 1, 1997, rather than according to the May through 
July 1997 staggered schedule proposed by GISB. Based on the 
Commission's experience with the prior compliance filings, it concluded 
that the staggered schedule proposed by GISB would not provide 
sufficient time for the Commission to review the filings and issue two 
rounds of orders in time to meet the November 1, 1997 implementation 
date. The order stated that this change would ensure implementation by 
November 1, 1997, without creating undue burdens on the pipelines 
because so many fewer standards needed to be implemented and those 
standards do not require fundamental changes in pipeline operations.
    The Commission, however, declined to adopt three standards (dealing 
with intra-day nominations, imbalances, and operational balancing 
agreements (OBAs)) 4 because the pipelines' obligations 
under these standards were not clear, and the Commission's experience 
with the previous standards showed that adoption of imprecise standards 
can sometimes cause more harm than good. The Commission concluded that 
standards in these areas were needed and gave the industry and GISB 
until September 1, 1997 to develop standards that delineate clearly the 
pipelines' obligations in these areas.
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    \4\ Standards 1.3.32, 2.3.29, and 2.3.30.
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    INGAA seeks rehearing of the overall time-line contending that 
requiring pipelines to make tariff filings by May 1, 1997, and to 
implement the World Wide Web standards and 27 supplemental business 
practices standards by August 1, 1997 and November 1, 1997, 
respectively, is too

[[Page 19923]]

onerous. INGAA asserts the pipelines are still devoting considerable 
resources to ensure a smooth implementation of the first set of 140 
standards being implemented April thru June. INGAA maintains that the 
GISB and the Commission schedule places the industry under too much 
time pressure, especially while the pipelines are attempting to 
finalize implementation during the period of uncertainty between final 
and rehearing orders. INGAA proposes that the schedule start with pro 
forma filings no later than November 1, 1997 with implementation no 
later than June 1, 1998.
    INGAA maintains, however, that some pipelines may gain economic 
efficiency by implementing the 27 supplemental business practices 
standards early because these standards complement the first 140 
standards. Thus, it emphasizes that its proposal is for implementation 
``no later than'' the proposed dates.
    CIG/WIC maintain that the August 1, 1997, deadline for 
implementation of the downloadable file format is unrealistic since 
GISB has not developed the standards yet. CIG/WIC find similarly 
unrealistic the September 1, 1997 deadline for clarification of the 
vague standards given the complexity of the issues.

Discussion

    INGAA's request for an extension of the deadline for compliance 
with Order No. 587-C until June 1, 1998 is denied. The schedule 
proposed by GISB reflects a consensus of the industry as to an 
appropriate schedule for implementation, and the Commission finds no 
reason to delay implementation. Standardization of business practices 
and communications needs to be a high priority for the industry, and 
postponing implementation until the summer of 1998 would unduly delay 
these efforts.
    INGAA has not identified any factors that would make implementation 
of these standards generally difficult for pipelines. There are only 27 
revised and new business practices standards, and these merely 
supplement the previous 140 standards. Similarly, the technology for 
posting information on World Wide Web pages is easily available, and 
there are only five categories of information that must be posted. The 
absence of a generically applicable implementation problem is evidenced 
by INGAA's own recognition that many pipelines would prefer to 
implement these standards earlier than INGAA's proposed schedule for 
operational reasons. Indeed, some pipelines have sought to comply with 
all or most of the 27 supplemental standards six months early by 
including them (along with the first 140) in their final compliance 
filing to become effective June 1, 1997.5
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    \5\ See Northwest Pipeline Company's compliance filing, Docket 
No. RP97-180-002 (April 1, 1997) (all 27 business practices 
standards and the World Wide Web standard); CNG Transmission 
Company's compliance filing, Docket No. RP97-181-002 (April 1, 1997) 
(22 business practices standards).
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    Further, in Order No. 587-C, the Commission provided that any 
pipelines seeking waivers of the requirements of the rule file within 
30 days of issuance.6 To date, only five pipelines have 
filed for extensions of the implementation dates and two have filed to 
extend the tariff filing date, but not the implementation 
dates.7 Handling specific problems on an individual basis is 
preferable to granting a generic extension and will result in more 
rapid progress towards the Commission's goal of reaching a standardized 
marketplace.
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    \6\ 62 FR at 10689; III FERC Stats. & Regs. Regulations 
Preambles at 30,588.
    \7\ Tennessee Gas Pipeline Company, Docket No. RP97-60-001; 
Midwestern Gas Transmission Company, Docket No. RP97-59-001; East 
Tennessee Natural Gas Company, Docket No. RP97-58-001; Williston 
Basin Interstate Pipeline Company, Docket No. RM96-1-006; Cove Point 
LNG, L.P., Docket No. RP97-162-000; Questar Pipeline Company, Docket 
No. RP97-129-000; and Overthrust Pipeline Company, Docket No. RP97-
131-000.
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    CIG/WIC's rehearing request concerning the August 1, 1997, deadline 
for pipelines to provide for downloads of data from their homepages is 
without basis. As pointed out above, the Commission did not adopt 
Standard 4.3.5 requiring pipelines to provide for file downloads; the 
Commission only expressed its intention should GISB act quickly. Until 
that standard is adopted and a deadline set, rehearing does not lie. 
The Commission, however, reiterates that the development of a file 
download capability is important and urges GISB to develop the required 
standards.
    The Commission denies CIG/WIC's request for rehearing with respect 
to the September 1, 1997 date for GISB to report on its progress in 
resolving the three vague standards. This deadline also is necessary 
for the Commission to learn within a reasonable timeframe whether the 
industry can resolve these issues on its own or whether the Commission 
needs to institute procedures to resolve these disputes. If the 
industry is unable to reach agreement on these standards, postponing 
the deadline will only lead to even further delay in implementing these 
needed standards.
    The September 1, 1997 deadline gives the industry five months to 
work on these standards, which appears adequate to consider these three 
standards. The imbalance and operational balancing agreement standards 
require only a clearer definition of when the standards 
apply.8 Although, as CIG/WIC point out, the intra-day 
nomination issue is perhaps more complex, GISB has already appointed 
its own task force to examine this issue. Resolving this standard 
quickly also is imperative, since the existing intra-day requirements 
have created a non-standardized marketplace where shippers cannot 
coordinate their intra-day nominations across pipelines.9 In 
addition, as the Commission stated in Order No. 587-C, it stands ready 
to help expedite the process by resolving intractable policy disputes 
impeding the development of standards in any areas.10
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    \8\ These standards used the phrase ``economically and 
operationally feasible'' to describe when the pipeline must enter 
into an OBA and the phrase ``substantially similar financial and 
operational implications'' to describe when pipelines must permit 
shippers to net imbalances across contracts.
    \9\ 62 FR at 10687; III FERC Stats. & Regs. Regulations 
Preambles at para. 30,586.
    \10\ 62 FR at 10686; III FERC Stats. & Regs. Regulations 
Preambles at para. 30,583.
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    The Commission orders: The requests for rehearing are denied.

    By the Commission.
Lois D. Cashell,
Secretary.
[FR Doc. 97-10607 Filed 4-23-97; 8:45 am]
BILLING CODE 6717-01-P