[Federal Register Volume 63, Number 77 (Wednesday, April 22, 1998)]
[Proposed Rules]
[Pages 19861-19864]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-10684]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 284

[Docket No. RM96-1-008]


Standards for Business Practices of Interstate Natural Gas 
Pipelines

April 16, 1998.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
proposing to amend Sec. 284.10 of its regulations governing standards 
for conducting business practices and electronic communication with 
interstate natural gas pipelines. The Commission is proposing to 
incorporate by reference, in Sec. 284.10(b)(1)(i), the standards 
relating to intra-day nominations promulgated March 12, 1998 by the Gas 
Industry Standards Board (GISB).

DATES: Comments are due May 22, 1998.

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 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 
located in the Public Reference Room at 888 First Street, N.E., 
Washington, D.C. 20426.
    The Commission Issuance Posting System (CIPS), an electronic 
bulletin board service, also provides access to the texts of formal 
documents issued by the Commission. CIPS is available at no charge to 
the user. CIPS can be accessed over the Internet by pointing your 
browser to the URL address: http://www.ferc.fed.us. Select the link to 
CIPS. The full text of this document can be obtained in ASCII or 
WordPerfect format. CIPS also 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 6.1 
format. CIPS user assistance is available at 202-208-2474.
    The Federal Energy Regulatory Commission (Commission) is proposing 
to amend Sec. 284.10 of its regulations governing standards for 
conducting business practices and electronic communications with 
interstate natural gas pipelines. The Commission is proposing to adopt 
the consensus standards, promulgated March 12, 1998, by the Gas 
Industry Standards Board (GISB) dealing with intra-day nominations and 
revisions to nomination and confirmation procedures.

I. Background

    In Order Nos. 587, 587-B, and 587-C 1 the Commission 
adopted regulations to standardize the business practices and 
communication methodologies of interstate pipelines in order to create 
a more integrated and efficient pipeline grid. In those orders, the 
Commission incorporated by reference consensus standards developed by 
GISB, a private, consensus standards developer composed of members from 
all segments of the natural gas industry.
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    \1\ 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), 
Order No. 587-B, 62 FR 5521 (Feb. 6, 1997), III FERC Stats. & Regs. 
Regulations Preambles para. 31,046 (Jan. 30, 1997), 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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    In Order No. 587, the Commission adopted a standard requiring 
pipelines to permit shippers to make at least one intra-day nomination 
per day.2 An intra-day nomination is a nomination submitted 
after the initial nomination deadline at 11:30 a.m. to change a 
shipper's scheduled quantities for the next gas day.3
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    \2\ 18 CFR 284.10(b)(1)(i) (1997), Nominations Related Standards 
1.3.10.
    \3\ 18 CFR 284.10(b)(1)(i) (1997), Nominations Related Standards 
1.2.4.
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    In Order No. 587-C, the Commission did not adopt additional 
standards approved by GISB concerning intra-day nominations, because 
the standards did not clearly outline the pipelines' obligations. The 
Commission further noted that pipelines had implemented GISB's previous 
intra-day standards in divergent ways, for instance, by establishing 
different times for submission of intra-day nominations. These 
differences prevented shippers from coordinating their intra-day 
nominations across the pipeline grid. The Commission gave GISB and the 
industry until September 1, 1997 to propose additional standards that 
would create the needed uniformity in intra-day procedures.
    On September 2, 1997, GISB filed a report detailing its progress in 
reaching consensus on the intra-day standards. While GISB reported 
making significant progress in developing the standards, it highlighted 
conflicts between its members that were inhibiting completion of the 
standards. The disagreements concerned the circumstances under which 
intra-day nominations by shippers holding firm capacity should be given 
scheduling priority over previously scheduled interruptible service.
    In Order No. 587-G, issued contemporaneously with this NOPR, the 
Commission resolved this conflict. It issued regulations requiring 
pipelines to accord an intra-day nomination submitted by a firm shipper 
scheduling priority over nominated and scheduled volumes for 
interruptible shippers. The Commission, however, deferred 
implementation of this requirement until GISB had developed, and the 
Commission had adopted, standards to implement the regulation.
    On March 23, 1998, GISB filed with the Commission intra-day 
nomination standards approved, on March 12, 1998,

[[Page 19862]]

by a consensus vote of the gas industry.4 These standards 
establish three synchronization times for shippers to coordinate their 
intra-day nominations: 6 p.m. to take effect the next gas day and 10 
a.m. and 5 p.m. to take effect on the same gas day. Under the 
standards, the 10 a.m. intra-day nomination would become effective, if 
confirmed, at 5 p.m. the same day, with any bumping notice to 
interruptible shippers given by 2 p.m. The 5 p.m. intra-day nomination 
would become effective, if confirmed, at 9 p.m. the same day. No 
bumping is allowed at the 5 p.m. nomination. The 6 p.m. intra-day 
nomination would become effective, if confirmed, at 9 a.m. the next 
morning if all parties can be scheduled, but GISB did not establish the 
time at which a bumping intra-day nomination would become effective, 
leaving that determination for the Commission. Bumping notice for the 6 
p.m. intra-day nomination would be given by 10 p.m.5

[GRAPHIC] [TIFF OMITTED] TP22AP98.002


    The standards also establish protocols for pipeline processing of 
nominations and confirmations for both regular and intra-day 
nominations.
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    \4\ The new standards are 1.1.17 through 1.1.19, 1.2.8 through 
1.2.12, 1.3.39 through 1.3.44. In addition, modifications were made 
to existing standards. Standards 1.2.7, 1.3.10, and 1.3.12 were 
deleted. Standards 1.3.2, 1.3.20, 1.3.22, and 1.3.32 were revised.
    \5\ The term ``TSP'' in the chart stands for transportation 
service provider.
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    As discussed above, the standards do not establish the time at 
which a firm intra-day nomination submitted on the day prior to gas 
flow (6 p.m.), which bumps interruptible service, would take effect. 
The standards leave that date to be determined by the Commission. The 
Commission already has resolved this issue in Order No. 587-G, adopting 
a regulation requiring that an intra-day nomination submitted on the 
day prior to gas flow will take effect at the start of the gas day, 9 
a.m. central-clock-time (CCT).6
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    \6\ 18 CFR 284.10(c)(1)(i)(B). Central clock time adjusts for 
daylight savings time.
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II. Discussion

    The Commission is proposing to adopt GISB's consensus standards. 
Adoption of these standards would provide shippers with greater 
opportunities to change their nominated quantities to better accord 
with changes in weather or other market circumstances and would improve 
the efficiency of the intra-day nomination process. The adoption of the 
GISB standards would expand from one to three the number of intra-day 
opportunities to which shippers are entitled. By creating times at 
which shippers can synchronize their intra-day nominations, these 
standards, together with the Commission's regulations adopted in Order 
No. 587-G, also would create the uniform process shippers need to 
coordinate their intra-day nominations across the pipeline grid. The 
standards governing nomination and confirmation procedures further 
should help create a more reliable nomination process in which 
pipelines will receive accurate information, so they can schedule 
nominations and intra-day nominations that their systems can 
accommodate.
    GISB approved the standards under its consensus procedures. This 
process first requires a super-majority vote of 17 out of 25 members 
with support from at least two members from each of the five industry 
segments--interstate pipelines, local distribution companies, gas 
producers, end-users, and services (including marketers and computer 
service providers). For final approval, 67% of GISB's general 
membership must ratify the standards.
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    \7\ Pub. L. No. 104-113, Sec. 12(d), 110 Stat. 775 (1996), 15 
U.S.C. 272 note (1997).
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    As the Commission found in Order No. 587, adoption of consensus 
standards is appropriate because the consensus process helps ensure the 
reasonableness of the standards by requiring that the standards draw 
support from a broad spectrum of all segments of the industry. 
Moreover, since the industry itself has to conduct business under these 
standards, the standards should reflect those business practices that 
have the widest possible

[[Page 19863]]

support. Indeed, in Sec. 12(d) of the National Technology Transfer and 
Advancement Act (NTT&AA) of 1995, Congress affirmatively requires 
federal agencies to use technical standards developed by voluntary 
consensus standards organizations, like GISB, as means to carry out 
policy objectives or activities.7
    In Order No. 587-G, the Commission has deferred implementation of 
its regulations relating to intra-day nominations, 
Sec. 284.10(c)(1)(i), until it adopts standards to implement the 
regulations. The Commission is contemplating a September 1, 1998, 
implementation date both for the standards proposed to be adopted here 
and the intra-day nomination regulations adopted in Order No. 587-G.

III. Information Collection Statement

    The following collections of information would be affected by this 
proposed rule and have been submitted to the Office of Management and 
Budget (OMB) for review under Section 3507(d) of the Paperwork 
Reduction Act of 1995, 44 U.S.C. 3507(d). The Commission solicits 
comments on the Commission's need for this information, whether the 
information will have practical utility, the accuracy of the provided 
burden estimates, ways to enhance the quality, utility, and clarity of 
the information to be collected, and any suggested methods for 
minimizing respondents' burden, including the use of automated 
information techniques. The burden estimate in Order No. 587-G includes 
the cost for pipelines to comply with the Commission's regulations 
concerning the scheduling priority of intra-day nominations. The 
following burden estimates include only the incremental costs of 
complying with GISB's new and revised standards intended to implement 
the Commission's regulations. The burden estimates are primarily 
related to start-up and will not be on-going costs.
    Estimated Annual Burden: The estimated annual burden associated 
with this NOPR is shown below.

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                                                                     Number of       Estimated                  
                 Data collection                     Number of     responses per   burden hours    Total annual 
                                                    respondents     respondent     per response        hours    
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FERC-549C.......................................              93               1              45           4,185
FERC-545........................................              93               1              47           4,371
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    The estimated number of reporting hours attributable to the 
revisions proposed herein are expected to total 8,556 hours annually.
    Information Collection Costs: The Commission seeks comments on the 
estimated cost to comply with these requirements. It has projected 
average annualized costs for all 93 respondents to be the following:

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                                                                     FERC-549C       FERC-545         Totals    
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Annualized Capital/Startup Costs................................        $220,580        $230,383        $450,963
Annualized Costs (Operations and Maintenance)...................               0               0               0
                                                                 -----------------------------------------------
    Total Annualized Costs......................................         220,580         230,383         450,963
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    OMB regulations 8 require OMB to approve certain 
information collection requirements imposed by agency rule. The 
Commission is submitting notification of the data collections affected 
by this proposed rule to OMB.

    \8\ 5 CFR 1320.11.
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Title:
    FERC-549C, Standards for Business Practices of Interstate Natural 
Gas Pipelines
    FERC-545, Gas Pipeline Rates: Rate Change (Non-Formal)

    Action: Proposed collections.
    OMB Control No.: 1902-0174, 1902-0154.
    Respondents: Business or other for profit (Interstate natural gas 
pipelines. (Not applicable to small business.))
    Frequency of Responses: One-time implementation (business 
procedures, capital/start-up).
    Necessity of the Information: This proposed rule, if implemented, 
would revise the requirements contained in 18 CFR 284.10 to further the 
process of standardizing business practices and electronic 
communications with interstate pipelines begun by the Commission in 
Order No. 587. Adoption of these regulations will provide shippers with 
increased options to change their scheduled gas quantities to reflect 
weather and other changed conditions and enable shippers to more 
efficiently transact business across multiple pipelines.
    The information collection requirements of this proposed rule will 
be reported directly to the industry users. The implementation of these 
data requirements will help the Commission carry out its 
responsibilities under the Natural Gas Act to monitor activities of the 
natural gas industry to ensure its competitiveness and to assure the 
improved efficiency of the industry's operations. The Commission's 
Office of Pipeline Regulation will use the data in rate proceedings to 
review rate and tariff changes by natural gas companies for the 
transportation of gas, for general industry oversight, and to 
supplement the documentation used during the Commission's audit 
process.
    Internal Review: The Commission has reviewed these requirements and 
made a determination that the proposed revisions are necessary to 
establish a more efficient and integrated pipeline grid. These 
requirements conform to the Commission's plan for efficient information 
collection, communication, and management within the natural gas 
industry. The Commission has assured itself, by means of its internal 
review, that there is specific, objective support for the burden 
estimates associated with the information requirement.
    Interested persons may obtain information on the reporting 
requirement by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street, N.E., Washington, D.C. 20426 [Attention: 
Michael Miller, Division of Information Services, Phone: (202) 208-
1415, fax: (202) 273-0873, email:[email protected]].
    Comments concerning the collection of information and the 
associated burden estimates, should be sent to the contact listed above 
and to the Office of Management and Budget, Office of Information and 
Regulatory Affairs, Washington, D.C. 20503 [Attention: Desk Officer for 
the Federal Energy

[[Page 19864]]

Regulatory Commission, phone: (202) 395-3087, fax: (202) 395-7285].

IV. 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.9 The 
Commission has categorically excluded certain actions from these 
requirements as not having a significant effect on the human 
environment.10 The actions proposed to be taken here fall 
within categorical exclusions in the Commission's regulations for rules 
that are clarifying, corrective, or procedural, for information 
gathering, analysis, and dissemination, and for sales, exchange, and 
transportation of natural gas that requires no construction of 
facilities.11 Therefore, an environmental assessment is 
unnecessary and has not been prepared in this rulemaking.
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    \9\ Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & 
Regs. Preambles 1986-1990 para. 30,783 (1987).
    \10\ 18 CFR 380.4.
    \11\ See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), 380.4(a)(27).
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V. Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act of 1980 (RFA) 12 
generally requires a description and analysis of final rules that will 
have significant economic impact on a substantial number of small 
entities. The proposed regulations would impose requirements only on 
interstate pipelines, which are not small businesses, and, these 
requirements are, in fact, designed to reduce the difficulty of dealing 
with pipelines by all customers, including small businesses. 
Accordingly, pursuant to Sec. 605(b) of the RFA, the Commission hereby 
certifies that the regulations proposed herein will not have a 
significant adverse impact on a substantial number of small entities.
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    \12\ 5 U.S.C. 601-612.
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VI. Comment Procedures

    The Commission invites interested persons to submit written 
comments on the matters and issues proposed in this notice to be 
adopted, including any related matters or alternative proposals that 
commenters may wish to discuss. An original and 14 copies of comments 
must be filed with the Commission no later than May 22, 1998. Comments 
should be submitted to the Office of the Secretary, Federal Energy 
Regulatory Commission, 888 First Street, NE, Washington, DC 20426, and 
should refer to Docket No. RM96-1-008. All written comments will be 
placed in the Commission's public files and will be available for 
inspection in the Commission's Public Reference Room at 888 First 
Street, NE, Washington, DC 20426, during regular business hours.
    Additionally, comments should be submitted electronically. 
Commenters are encouraged to file comments using Internet E-Mail. 
Comments should be submitted through the Internet by E-Mail to 
[email protected] in the following format: on the subject line, 
specify Docket No. RM96-1-008; in the body of the E-Mail message, 
specify the name of the filing entity and the name, telephone number 
and E-Mail address of a contact person; and attach the comment in 
WordPerfect 6.1 or lower format or in ASCII format as an 
attachment to the E-Mail message. The Commission will send a reply to 
the E-Mail to acknowledge receipt. Questions or comments on electronic 
filing using Internet E-Mail should be directed to Marvin Rosenberg at 
202-208-1283, E-Mail address [email protected].
    Commenters also can submit comments on computer diskette in 
WordPerfect 6.1 or lower format or in ASCII format, with 
the name of the filer and Docket No. RM96-1-008 on the outside of the 
diskette.

List of Subjects in 18 CFR Part 284

    Continental shelf, Natural gas, Reporting and recordkeeping 
requirements; Incorporation by reference.

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

    In consideration of the foregoing, the Commission proposes to amend 
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 section 284.10, paragraph (b)(1)(i) is revised to read as 
follows:


Sec. 284.10  Standards for pipeline business operations and 
communications.

* * * * *
    (b) * * *
    (1) * * *
    (i) Nominations Related Standards (Version 1.2, July 31, 1997), 
with the addition of standards 1.1.17 through 1.1.19, 1.2.8 through 
1.2.12, 1.3.39 through 1.3.44 (as approved March 12, 1998), the 
modification of standards 1.3.2, 1.3.20, 1.3.22 1.3.32 (as approved 
March 12, 1998), and the deletion of standards 1.2.7, 1.3.10, and 
1.3.12;
* * * * *
[FR Doc. 98-10684 Filed 4-21-98; 8:45 am]
BILLING CODE 6717-01-P