[Federal Register Volume 62, Number 91 (Monday, May 12, 1997)]
[Rules and Regulations]
[Pages 25842-25844]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12398]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 284

[Docket Nos. RM96-1-005, RP97-276-000; Order No. 587-E]


Standards for Business Practices of Interstate Natural Gas 
Pipelines

Issued May 6, 1997.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule; Order denying rehearing and request for waiver.

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SUMMARY: The Federal Energy Regulatory Commission is denying requests 
for rehearing of Order No. 587-B (62 FR 5521, Feb. 6, 1997). Order No. 
587-B incorporated by reference standards promulgated by the Gas 
Industry Standards Board requiring interstate pipelines to exchange 
data necessary to conduct certain business transactions across the 
Internet according to protocols established in the standards. The 
format for the data was adopted by the Commission in Order No. 587. 61 
FR 39053 (Jul. 26, 1996). The order clarifies pipelines' obligations in 
implementing the standards.

DATES: Pipeline implementation of the Internet requirements runs from 
April 1, 1997 to June 1, 1997, according to a staggered schedule 
established in Order No. 587.

ADDRESSES: Federal Energy Regulatory Commission, 888 First Street, NE, 
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, NE, Washington, DC 20426, (202) 208-1283.
Kay Morice, Office of Pipeline Regulation, Federal Energy Regulatory 
Commission, 888 First Street, NE, 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, NE, 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, NE, Washington, DC 20426.

ORDER DENYING REHEARING AND REQUEST FOR WAIVER

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

    On March 3, 1997, Natural Gas Clearinghouse (NGC) and Ozark Gas 
Transmission System (Ozark) filed requests for rehearing of Order No. 
587-B,1 and, in the case of Ozark, an alternative request 
for a waiver. For the reasons discussed below, the requests for 
rehearing and waiver are denied.
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    \1\ Standards For Business Practices Of Interstate Natural Gas 
Pipelines, 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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Background

    In Order No. 587,2 the Commission incorporated by 
reference 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 datasets that 
detailed the data requirements needed to conduct business transactions 
in these areas. In Order No. 587-B, the Commission incorporated by 
reference GISB standards establishing the protocols and procedures for 
exchanging these files over the Internet, with implementation to follow 
a staggered schedule beginning April 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).
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    At the same time that GISB passed the standards for transacting 
business transactions over the Internet, it passed two standards, 4.3.5 
and 4.3.6, requiring pipelines to provide additional information on an 
Internet World Wide Web homepage (homepage).3 GISB 
recommended an August 1, 1997 implementation date for the two World 
Wide Web standards. GISB also approved revisions and additions to its 
business practices standards, with a recommendation for tariff filings 
beginning May 1997 and implementation in November 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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[[Page 25843]]

    The Commission did not adopt the two World Wide Web standards (or 
the supplemental business practices standards) in Order No. 587-B, 
because the proposed implementation schedule for these standards was 
not as imminent as for the standards to be implemented on April 1, 
1997. The Commission stated the World Wide Web and the supplemental 
business practices standards would be addressed in a later order. On 
March 4, 1997, the Commission issued Order No. 587-C 4 
addressing the World Wide Web standards and the revised and new 
business practices standards.
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    \4\ Order No. 587-C, 62 FR 10684 (Mar. 10, 1997), III FERC 
Stats. & Regs. Regulations Preambles para. 31,050 (Mar. 4, 1997).
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    NGC maintains the Commission erred by not adopting the World Wide 
Web standards in Order No. 587-B (Standards 4.3.5 and 4.3.6). NGC and 
Ozark claim error in the Commission's requirement that pipelines 
maintain their Electronic Bulletin Boards (EBBs) in addition to the 
Internet requirements of Order No. 587-B. In the event the Commission 
does not grant its rehearing request, Ozark requests a waiver of any 
requirements to maintain an EBB.

Public Notice, Interventions, and Protests

    Public notice of Ozark's request for waiver was issued on March 13, 
1997, with notices and motions to intervene or protests due by March 
20, 1997. No motions to intervene or protests were filed.

Discussion

A. Adoption of World Wide Web Standards

    NGC's request that the Commission adopt the standards requiring 
pipelines to provide information on World Wide Web homepages (Standards 
4.3.5 and 4.3.6) is moot. The Commission adopted Standard 4.3.6 in 
Order No. 587-C. The Commission did not adopt Standard 4.3.5 in Order 
No. 587-C, only because GISB had not completed the work needed to 
implement the standard. Standard 4.3.5 provides that documents 
maintained on a pipeline's homepage will be downloadable in a specified 
electronic structure, and GISB has not yet promulgated the electronic 
structure. The Commission, however, stated, in Order No. 587-C, that 
the ability to download information is critical for customers who do 
not want to read the information on-line or who want the information in 
computer-readable form, and urged GISB to adopt the required electronic 
structure quickly. The Commission intends to incorporate Standard 4.3.5 
when GISB develops the required download formats.

B. Requirements That Pipelines Continue to Maintain EBBs

    NGC and Ozark seek rehearing of the Commission's statements in 
Order No. 587-B that the Commission would not eliminate its requirement 
for pipelines to provide certain information on EBBs, while the 
Internet standards are being implemented.5 NGC and Ozark 
contend that the Commission is requiring pipelines to provide three 
methods of communication: an EBB, a file download capability through 
Electronic Data Interchange (EDI) using Valued Added Networks (VANs) 
(citing 18 CFR 284.8(b)(5)), and the new Internet communications. They 
maintain that maintaining three systems is unnecessarily costly and 
wasteful.
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    \5\ 62 FR, at 5524; III FERC Stats. & Regs. Regulations 
Preambles, at 30,169-70.
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    If its request for rehearing is denied, Ozark requests a waiver of 
the requirement to maintain an EBB and the requirement to support EDI-
based transmission of data through a VAN. It states that all of its 
current EBB functions will be available on a Web-based 
system.6
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    \6\ It states that it will still support the use of facsimile 
transmission for nominations and capacity release offers or bids.
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1. Downloads to VANs
    With the implementation of the GISB standards for Internet 
communication, the Commission regulations no longer require pipelines 
to provide file downloads to a VAN. Thus, NGC and Ozark already have 
received the relief they request.
    In Order No. 563,7 the Commission added section 
284.8(b)(5) to its regulations, which required pipelines to adhere to 
standards providing for downloads of information about capacity release 
transactions, available capacity, and system-wide notices in 
standardized EDI file formats.8 At that time, the Commission 
standards required that the information be made available to any party, 
including a VAN.9
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    \7\ 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 para. 30,988 (Dec. 23, 
1993), order on reh'g, Order No. 563-A, 59 FR 23624 (May 6, 1994), 
III FERC Stats. & Regs. Preambles para. 30,994 (May 2, 1994), reh'g 
denied, Order No. 563-B, 68 FERC para. 61,002 (1994).
    \8\ In contrast to an EBB, where the user at a keyboard 
interacts with the pipeline's computer, a file download provides for 
the transfer in computerized format of a file from the pipeline's 
computer to the user's computer. The user can use its own internal 
computer programs to manipulate the data.
    \9\ A VAN is a communications or information system providing an 
aggregation, routing, and delivery service. In effect, a VAN 
provides a user with an electronic mailbox for receiving 
information.
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    In Order No. 587, the Commission removed section 284.8(b)(5) from 
its regulations. In its place, the Commission substituted the Capacity 
Release Standards promulgated by GISB, which revised and updated the 
formats previously required by the section 284.8(b)(5) standards. The 
standards adopted in Order No. 587-B also require pipelines to provide 
these files through Internet communications. Thus, once pipelines 
implement the GISB Internet standards, they will no longer be required 
to support other methods of transmitting these files, such as to a VAN.
2. Continuation of the EBB Requirement
    NGC and Ozark also contend that the Commission should not be 
continuing to require pipelines to maintain EBBs. They argue that 
maintenance of two systems--EBBs and Internet communications--is 
wasteful and unnecessary and at odds with GISB's goal of moving away 
from proprietary EBBs to standardized Internet communications.
    NGC's and Ozark's rehearing requests evidence confusion about the 
Commission's EBB requirements that require clarification. The rehearing 
requests raise two issues that need to be considered separately. The 
first is whether a waiver is necessary for pipelines to replace their 
current dial-up EBBs with Internet communications. The second is 
whether the Commission should remove its requirement for pipelines to 
maintain EBBs and substitute the standardized communication methods 
developed by GISB. A subsidiary issue is whether, and under what 
circumstances, pipelines are permitted to eliminate their EBBs and 
replace them with standardized communication methods.
    On the first question, pipelines can now replace their dial-up EBBs 
with Internet communications, without the need for a waiver. The term 
EBB, as used in the Commission's regulations, does not refer to any 
specific technological method of communication.10 An EBB 
refers to a continuous computer connection between a pipeline's 
computer and a user's computer in which the information from the 
pipeline's computer is displayed visually on the user's computer and 
the user can enter

[[Page 25844]]

data to the pipeline's computer.11 When the EBB requirement 
was first imposed in Order No. 636, the technology was to use direct 
telephone modem connections to dial-up a pipeline EBB. The dial-up 
system was non-standardized, with each pipeline requiring the use of 
different software packages and log-on procedures to access the 
pipelines' computers. As technology has changed, however, pipelines can 
now provide the same interactive service using more current and 
standardized technological methods that are consistent with the GISB 
standards, such as an Internet or Web-based system. Using an Internet-
based system removes many of the idiosyncracies in log-on procedures 
that plagued the dial-up systems, since each user can access each 
pipeline's World Wide Web site using the same Internet connection and 
Web browser. Thus, pipelines are not prohibited by Commission 
regulations from using a Web-based EBB in place of a dial-up EBB.
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    \10\ See Section 284.10(a).
    \11\ See Standards For Electronic Bulletin Boards Required Under 
Part 284 Of The Commission's Regulations, Order No. 563, 59 FR 516 
(Jan. 5, 1994) FERC Stats. & Regs. Regulation Preambles [Jan. 1991-
June 1996], para. 30,988, at 31,001 n.10 (Dec. 23, 1993).
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    However, even moving pipeline EBBs to the Internet may not 
necessarily create the open and standardized communication system that 
is required. For instance, standards may need to delineate the minimum 
Web browser and encryption levels that are needed to access pipeline 
Web sites, the basic organization of the Web site, and the format in 
which data will be presented. Moreover, as happened with the 
standardization of business transactions, communication efficiency may 
require that standards be developed to specify specific file formats 
for the exchange of business information.
    GISB too has recognized that there is further need to standardize 
all EBB functions and information within a reasonable amount of 
time.12 But, at the present time, the standardization effort 
is not complete. Standards still have not been developed to cover all 
the information the Commission requires to be posted on 
EBBs.13 Although GISB has standardized much of these data, a 
few still remain. For instance, the GISB standards do not provide 
standards for submitting offers to release capacity and bids via the 
Internet, nor do they provide standards for downloading the Index of 
Customers in the specified format. Nor have standards been developed to 
cover the myriad other information and business transactions (not 
covered by the Commission regulations) that many pipelines provide 
using EBBs.14 As GISB has recognized, until the 
standardization effort is complete, pipelines should not be forced to 
discontinue their proprietary EBB systems.15
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    \12\ Electronic Delivery Mechanism Standard 4.3.6.
    \13\ Commission regulations require the use of EBBs only for 
limited purposes: to provide equal and timely access to information 
relevant to the availability of transportation service, including 
the provision of a capacity release system involving a posting and 
bidding mechanism to facilitate capacity reallocations (Sections 
284.8(b)(3) and 284.9(b)(3); Pipeline Service Obligations and 
Revisions to Regulations Governing Self-Implementing Transportation; 
and Regulation of Natural Gas Pipelines After Partial Wellhead 
Decontrol, [Regs. Preambles Jan. 1991-June 1996] FERC Stats. & Regs. 
para. 30,939, at 30,415 (1992)); information about pipeline 
affiliate transactions (sections 161.3(h) and 250.16(c)); and an 
index of customers (section 284.106). Section 284.10 of the 
Commission's regulations establishes certain features that pipeline 
EBBs, whether required by the regulations or the pipeline's tariff, 
must support.
    \14\ This process was begun in Order Nos. 587, 587-B, and 587-C, 
in which the Commission approved GISB standards requiring pipelines 
to transact some of these business transactions (nominations, 
flowing gas, invoicing, and capacity release) using standardized 
file formats that would be exchanged according to the Internet 
protocols established by GISB. However, these standards do not cover 
all of the information and transactions currently performed on 
pipeline EBBs.
    \15\ Electronic Delivery Mechanism Standard 4.3.6.
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    Maintenance of existing systems during the transition to 
standardized communications should not result in significant added 
costs or burden. Pipelines, however, should not expend significant 
resources to expand or enhance the functionality of proprietary 
systems. These resources and efforts would be better spent on 
completing the process of developing standardized systems as quickly as 
possible.
    Given the importance of developing standardized communications, the 
Commission expects GISB and the industry to move forward rapidly to 
complete the standardization process so that the Commission can 
substitute standardized communication modalities for the requirement 
for pipelines to maintain EBBs. The Commission requests a report by 
GISB, and by others who may wish to comment, by September 1, 1997 on 
the extent of their progress and the contemplated completion date.
    In the meantime, as discussed above, the Commission regulations do 
not require pipelines to use EBBs to conduct the business transactions 
standardized in Order No. 587. Thus, pipelines can file tariff 
revisions under section 4 of the Natural Gas Act when they are ready to 
discontinue using EBBs to provide these services and, instead, rely 
upon the standardized methodologies.
    In its waiver request, Ozark did not make clear whether it is 
intending to substitute GISB's Internet server model for its EBB to 
conduct the relevant business transactions or whether every one of the 
business transactions and communication now provided using its EBB will 
be provided using the Internet communications. As discussed above, the 
Commission's regulations do not require such transactions to be 
provided on an EBB, so no waiver of the regulations is needed. However, 
if Ozark previously provided such services on an EBB, it cannot 
dispense with those services through a filing to comply with Order No. 
587, but will need to make a section 4 filing.
    The Commission orders:
    (A) The requests for rehearing are denied.
    (B) Ozark's request for waiver is denied.

    By the Commission.
Lois D. Cashell,
Secretary.
[FR Doc. 97-12398 Filed 5-9-97; 8:45 am]
BILLING CODE 6717-01-P