[Federal Register Volume 65, Number 131 (Friday, July 7, 2000)]
[Rules and Regulations]
[Pages 41873-41874]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17162]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 284

[Docket No. RM96-1-014;
Order No. 587-L]


Standards for Business Practices of Interstate Natural Gas 
Pipelines

Issued June 30, 2000.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule; Order establishing implementation date for 
imbalance trading.

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SUMMARY: The Federal Energy Regulatory Commission is establishing 
November 1, 2000, as the date by which pipelines are required to comply 
with the regulation requiring pipelines to permit shippers to offset 
imbalances on different contracts held by the shipper and to trade 
imbalances. (18 CFR 284.12(c)(2)(ii)). This regulation was adopted in 
Order No. 587-G. (63 FR 20072).

DATES: Pipelines must comply with 18 CFR 284.12(c)(2)(ii) by November 
1, 2000.

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 Markets, Tariffs, and Rates, Federal Energy 
Regulatory Commission 888 First Street, N.E., Washington, DC 20426. 
(202) 208-1283
Kay Morice, Office of Markets, Tariffs, and Rates, Federal Energy 
Regulatory Commission 888 First Street, N.E., Washington, DC 20426. 
(202) 208-0507

SUPPLEMENTARY INFORMATION:

United States of America

Federal Energy Regulatory Commission

    Before Commissioners: James J. Hoecker, Chairman; William L. 
Massey, Linda Breathitt, and Curt Hebert, Jr. Standards For Business 
Practices Of Interstate Natural Gas Pipelines.
    [Docket No. RM96-1-014]

[[Page 41874]]

Order No. 587-L

Order Establishing Implementation Date for Imbalance Trading

Issued June 30, 2000.
    In Order No. 587-G, \1\ the Commission adopted a regulation, 18 CFR 
284.12(c)(2)(ii), requiring pipelines to permit shippers to offset 
imbalances on different contracts held by the shipper and to trade 
imbalances. Through trading of imbalances, shippers would be able to 
avoid penalties, without compromising the operational reliability of 
the pipeline's system. \2\ In Order No. 587-G, the Commission deferred 
implementation of this regulation until the Gas Industry Standards 
Board (GISB) had an opportunity to develop standards related to 
imbalance trading.
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    \1\ Standards For Business Practices Of Interstate Natural Gas 
Pipelines, Order No. 587-G, 63 FR 20072 (Apr. 23, 1998), III FERC 
Stats. & Regs. Regulations Preambles para. 31,062 (Apr. 16, 1998), 
on reh'g, Order No. 587-I, 63 FR 53565 (Oct. 6, 1998), III FERC 
Stats. & Regs. Regulations Preambles para. 31,067 (Sep. 29, 1998).
    \2\ Order No. 587-G, 63 FR at 20081, III FERC Stats. & Regs. 
Regulations Preambles para. 31,062, at 30,677-80.
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    The Commission further recognized the importance of imbalance 
trading in Order No. 637. \3\ The Commission found that penalties can 
operate to distort the workings of the market and that imbalance 
trading plays an important role in the Commission's overall penalty 
policy because shippers can use imbalance trading to better manage 
their penalty exposure without jeopardizing the integrity of the 
pipeline's operations. The Commission further found that imbalance 
trading was of sufficient importance to shippers' ability to manage 
their business that pipelines would not be permitted to implement new 
imbalance services (such as park and loan services) before they 
implement imbalance trading. \4\
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    \3\ Regulation of Short-Term Natural Gas Transportation Services 
and Regulation of Interstate Natural Gas Transportation Services, 
Order No. 637, 65 FR 10156, 10198 (Feb. 25, 2000), III FERC Stats. & 
Regs. Regulations Preambles para. 31,091, at 31,308 (Feb. 9, 2000), 
Order No. 637-A, 65 FR 35705 (Jun. 5, 2000), III FERC Stats. & Regs. 
Regulations Preambles para. 31,099 (May 19, 2000).
    \4\ Order No. 637, 65 FR at 10199, III FERC Stats. & Regs. 
Regulations Preambles para. 31,091, at 31,311; Order No. 637-A, 65 
FR at 35737, III FERC Stats. & Regs. Regulations Preambles para. 
31,099, at 31,601-602.
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    On February 23, 2000, GISB filed with the Commission a report on 
its standards development progress. GISB reports that its Executive 
Committee approved standards for imbalance trading and netting and 
title transfer tracking and that these standards are awaiting the 
development of the technical standards for information requirements and 
technical mapping. On February 11, 2000, the Executive Committee also 
established an Expedited Data Development Subcommittee whose first 
charge is to complete the technical standards for imbalance trading 
promptly. \5\
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    \5\ See http://www.gisb.org/edd.htm (June 8, 2000) (announcing 
formation of Expedited Data Development Subcommittee).
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    Because of the importance of imbalance trading to the overall 
Commission policy regarding pipeline penalties, the Commission is 
establishing November 1, 2000 as the date by which pipelines are to 
comply with the requirement to provide imbalance trading to their 
shippers. Since GISB has been working since February 2000 on developing 
the technical standards, this date should provide GISB and the 
pipelines with sufficient opportunity to complete the technical 
standards and implement imbalance trading. To implement imbalance 
trading on their systems, pipelines must file revised tariff sheets not 
less than 30 days nor more than 60 days prior to November 1, 2000. \6\
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    \6\ 18 CFR 154.207.
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The Commission orders:

    Each interstate pipeline must comply with Sec. 284.12(c)(2)(ii) of 
the Commission regulations by November 1, 2000.

    By the Commission.
David P. Boergers,
Secretary.
[FR Doc. 00-17162 Filed 7-6-00; 8:45 am]
BILLING CODE 6717-01-P