[Federal Register Volume 86, Number 42 (Friday, March 5, 2021)]
[Proposed Rules]
[Pages 12879-12886]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-03797]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 284

[Docket No. RM96-1-042]


Standards for Business Practices of Interstate Natural Gas 
Pipelines

AGENCY: Federal Energy Regulatory Commission, Department of Energy.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission is proposing to amend 
its regulations to incorporate by reference, with certain enumerated 
exceptions, the latest version (Version 3.2) of business practice 
standards adopted by the Wholesale Gas Quadrant of the North American 
Energy Standards Board (NAESB) applicable to natural gas pipelines in 
place of the currently incorporated version (Version 3.1) of those 
business practice standards. The revisions made by NAESB in this 
version of the standards are designed to enhance the natural gas 
industries' system and software security measures and to clarify the 
processing of certain business transactions.

DATES: Comments are due April 19, 2021.

ADDRESSES: Comments, identified by the docket number of this 
proceeding, may be filed electronically at https://www.ferc.gov/ in 
acceptable native applications and print-to-PDF, but not in scanned or 
picture format. For those unable to file electronically, comments may 
be filed by mail or may be hand delivered. Mailed comments should be 
addressed to: Federal Energy Regulatory Commission, Secretary of the 
Commission, 888 First Street NE, Washington, DC 20426. Hand-delivered 
comments should be delivered to: Federal Energy Regulatory Commission, 
12225 Wilkins Avenue, Rockville, Maryland 20852. The Comment Procedures 
Section of this document contains more detailed filing procedures. The 
Comment Procedures Section of this document contains more detailed 
filing procedures.

FOR FURTHER INFORMATION CONTACT: 
Stanley Wolf (Technical Issues), Office of Energy Policy and 
Information, Federal Energy Regulatory Commission, 888 First Street NE, 
Washington, DC 20426, (202) 502-6841
Oscar F. Santillana (Technical Issues), Office of Energy Market 
Regulation, Federal Energy Regulatory

[[Page 12880]]

Commission, 888 First Street NE, Washington, DC 20426, (202) 502-6392
Robert McLean (Legal Issues), Office of the General Counsel, Federal 
Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426

SUPPLEMENTARY INFORMATION: 

 
                                                         Paragraph No.
 
I. Background........................................                  2
II. Discussion.......................................                  5
    A. Modifications to Previous Version of Standards                  8
        1. Modifications in Response to the Sandia                     8
         Surety Assessment...........................
        2. Modifications in Response to Industry                      12
         Request.....................................
    B. Standards Proposed Not To Be Incorporated by                   18
     Reference.......................................
    C. Proposed Implementation Procedures............                 19
III. Notice of Use of Voluntary Consensus Standards..                 24
IV. Incorporation by Reference.......................                 25
V. Information Collection Statement..................                 35
VI. Environmental Analysis...........................                 42
VII. Regulatory Flexibility Act......................                 43
VIII. Comment Procedures.............................                 46
IX. Document Availability............................                 50
 

    1. The Federal Energy Regulatory Commission (Commission) proposes 
to amend its regulations at 18 CFR 284.12 to incorporate by reference, 
with certain enumerated
    2. exceptions,\1\ the latest version (Version 3.2) of business 
practice standards adopted by NAESB's WGQ applicable to natural gas 
pipelines that NAESB reported to the Commission on August 17, 2020 in 
place of the currently incorporated version (Version 3.1) of those 
business practice standards. The implementation of these standards and 
regulations will promote the additional efficiency and reliability of 
the natural gas industries' operations thereby helping the Commission 
to carry out its responsibilities under the Natural Gas Act (NGA). In 
addition, the proposed revisions are necessary to enhance the natural 
gas industries' computer security requirements.\2\
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    \1\ As explained below, we are not proposing in this proposed 
rule to incorporate by reference the optional model contracts and 
the eTariff-related standards included in the North American Energy 
Standards Board (NAESB) Wholesale Gas Quadrant (WGQ) Version 3.2 
package of business practice standards.
    \2\ As explained below, NAESB has developed and adopted, in 
conjunction with Sandia National Laboratories, a series of business 
practice standards to protect the natural gas industries' internet 
security.
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I. Background

    3. Since 1996, the Commission has adopted regulations to 
standardize the business practices and communication methodologies of 
interstate natural gas pipelines to create a more integrated and 
efficient pipeline grid. These regulations have been promulgated in the 
Order No. 587 series of orders,\3\ wherein the Commission has 
incorporated by reference standards for interstate natural gas pipeline 
business practices and electronic communications that were developed 
and adopted by NAESB's WGQ. Upon incorporation by reference, this 
version of the standards will replace the currently incorporated 
version (Version 3.1) of those business practice standards.
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    \3\ This series of orders began with the Commission's issuance 
of Standards for Bus. Practices of Interstate Nat. Gas Pipelines, 
Order No. 587, 61 FR 39053 (July 26, 1996), FERC Stats. & Regs. ] 
31,038 (1996) (cross-refrenced at 76 FERC ] 61,042).
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    4. On August 17, 2020, NAESB filed a report informing the 
Commission that it had adopted and ratified WGQ Version 3.2 of its 
business practice standards applicable to interstate natural gas 
pipelines. Version 3.2 of the WGQ includes business practice standards 
developed and modified in response to industry requests and directives 
from the NAESB Board of Directors. This version also includes the 
standards developed in response to the recommendations of Sandia 
National Laboratory (Sandia),\4\ which in 2019 issued a cybersecurity 
surety assessment of the NAESB standards sponsored by DOE (Sandia 
Surety Assessment),\5\ and the standards developed to enable the use of 
distributed ledger technologies when transacting the NAESB Base 
Contract for Sale and Purchase of Natural Gas.
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    \4\ Sandia is a multidisciplinary national laboratory and 
federally funded research and development center for the U.S. 
Department of Energy's (DOE) National Nuclear Security 
Administration that supports numerous federal, state, and local 
government agencies, companies, and organizations.
    \5\ In April 2017, NAESB announced that Sandia, through funding 
provided by DOE, would be performing a surety assessment of the 
NAESB standards. As determined by Sandia and DOE, the purpose of the 
surety assessment was to analyze cybersecurity elements within the 
standards, focusing on four areas: (1) The NAESB Certification 
Program for Accredited Certification Authorities, including the 
Wholesale Electric Quadrant (WEQ)-012 Public Key Infrastructure 
Business Practice Standards, the NAESB Accreditation Requirements 
for Authorized Certificate Authorities, and the Authorized 
Certification Authority Process; (2) the WEQ Open Access Same-Time 
Information Systems suite of standards; (3) the WGQ and Retail 
Markets Quadrant internet Electronic Transport (IET) and Quadrant 
Electronic Delivery Mechanism (EDM) Related Standards Manual; and 
(4) a high-level dependency analysis between the gas and electric 
markets to evaluate the different security paradigms the markets 
employ.
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    5. The NAESB report identifies all the changes made to the WGQ 
Version 3.1 Standards and summarizes the deliberations that led to the 
changes being made. It also identifies changes to the existing 
standards that were considered but not adopted due to a lack of 
consensus or other reasons.

II. Discussion

    6. In this NOPR, we propose to incorporate by reference, in our 
regulations, Version 3.2 of the NAESB WGQ consensus business practice 
standards, with certain exceptions.\6\ We propose that compliance 
filings made in accordance with a final rule be made 120 days after 
issuance of a final rule in this proceeding or on the first business 
day thereafter if falling on a weekend or holiday, with an effective 
date 180 days from the date compliance filings are due in this 
proceeding or the first business day thereafter if falling on a weekend 
or holiday. This will allow time for the Commission to process the 
compliance filings before the effective date of the new standards.
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    \6\ In the discussion below we identify the NAESB WGQ Version 
3.2 Standards that we propose not to incorporate by reference.
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    7. 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 industry participants 
representing all segments of the industry. Moreover,

[[Page 12881]]

because the industry conducts business under these standards, the 
Commission's regulations should reflect those standards that have the 
widest possible support. In section 12(d) of the National Technology 
Transfer and Advancement Act of 1995, Congress affirmatively requires 
federal agencies to use technical standards developed by voluntary 
consensus standards organizations, like NAESB, to carry out policy 
objectives or activities.
    8. We discuss below some specific aspects of NAESB's report.

A. Modifications to Previous Version of Standards

1. Modifications in Response to the Sandia Surety Assessment
    9. NAESB revised previously incorporated standards and developed 
new standards in response to the recommendations in the Sandia Surety 
Assessment. Specifically, NAESB adopted revisions to the WGQ EDM 
Related Business Practice Standards, which establish the framework for 
the electronic dissemination and communication of information between 
parties in the North American wholesale gas marketplace, and to the WGQ 
IET Related Business Practice Standards, which define the 
implementation of various technologies necessary to communicate 
transactions and other electronic data using standard protocols for 
electronic commerce over the internet between trading partners. First, 
NAESB adopted two new standards, 4.3.109 and 10.3.28, to provide that 
trading partners should evaluate software fixes or patches for known 
vulnerabilities within 30 days and implement the fix or patch as soon 
as reasonably practicable based on the severity of the risk. Second, 
NAESB adopted two new standards, 4.3.110 and 10.3.29, to provide that 
trading partners should mutually agree to the version of the EDM and 
IET to be used. Third, the new standards specify notification and 
coordination timelines with trading partners, where applicable, to 
address vulnerable systems or software as soon as possible. Fourth, the 
Sandia Surety Assessment recommended that NAESB consider guidelines for 
configuration and logging, network traffic monitoring, alerting 
systems, and manual continuity of operations in the event of abnormal 
behavior or failure conditions within the system. In response, NAESB 
added language to new Standards 4.3.110 and 10.3.28 to include both 
specific and broad adoptions of such system security measures.
    10. Further, NAESB added language to existing Standards 4.3.60, 
4.3.61, 10.2.33, and 10.3.25 to clarify the Transport Layer Security 
protocol,\7\ which encrypts data to hide information from electronic 
observers on the internet. NAESB also deleted all references to the 
Secure Sockets Layer protocol in the standards.
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    \7\ The National Institute of Standards and Technology Special 
Pub. 800-52 requires government Transport Layer Security servers and 
clients to support Transport Layer Security Version 1.2 and 
recommends support for Transport Layer Security Version 1.3 by the 
year 2024.
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    11. Concerning identification key lengths, the Sandia Surety 
Assessment recommended that Rivest-Shamir-Adelman keys \8\ must be no 
shorter than 2048 bits, Elliptic Curve Digital Signature Algorithm keys 
\9\ must be no shorter than 224 bits, Hash \10\ algorithms should be 
from the Secure Hash Algorithm (SHA)-2 \11\ or SHA-3 families, and 
acceptable Advanced Encryption Standard key lengths range from 128, to 
192, to 256. The Sandia Surety Assessment recommended that, in general, 
implementors use the largest feasible key length consistent with 
implementation of current business processes. In response, NAESB 
deleted Standard 4.3.83 to remove legacy support references and 
maintain a minimum encryption strength of 128 bits. Further, NAESB 
revised existing Standards 10.2.34 and 10.3.15 to delete a proprietary 
Pretty Good Privacy (PGP) \12\-related hyperlink and to accommodate 
license-free OpenPGP,\13\ respectively. NAESB also adopted a new 
Standard 10.2.39 to specify that OpenPGP should be used to create 
public and private keys for privacy and digital signature applications.
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    \8\ Rivest-Shamir-Adelman is a public key infrastructure 
algorithm composed of a public component and a private component 
that is typically installed on a recognized Certificate Authority.
    \9\ Elliptic Curve Digital Signature Algorithm public keys 
generate an encrypted signature to validate data.
    \10\ A Hash is cryptology technique used for digital signatures 
in which a series of numbers that may represent, for example, a 
password, an image, a document, or an executable file is used to 
generate a cryptographic hash (i.e., a large number).
    \11\ SHA-2 is a set of cryptographic hash functions.
    \12\ PGP is a proprietary (i.e., an organization must pay to use 
it) encryption program developed to enhance the confidentiality and 
integrity of data.
    \13\ OpenPGP is an encryption standard defined by the Internet 
Engineering Task Force enabling design and implementation free of 
licensing fees. At present, the encryption method is generally 
considered the most secure.
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    12. Further, NAESB revised existing Standards 4.3.60, 4.3.84, 
10.3.4, and 10.3.16 to specify Hyper-Text Transport Protocol Secure 
(HTTPS),\14\ which is an encrypted version of Hyper-Text Transport 
Protocol (HTTP),\15\ whenever a secure communication is required to 
protect information in transit and support overall privacy needs. 
Moreover, NAESB revised existing Standards 4.3.60 and 10.3.16 to 
require multi-factor (e.g., two-factor) authentication on an individual 
basis and state that secure websites should employ individual user 
credentials.
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    \14\ HTTPS authentication encrypts username and password 
combinations as part of a Uniform Resource Locator address. To 
obtain an HTTPS connection, a web browser must contact a trusted, 
commercial Certificate Authority, such as a NAESB Authorized 
Certificate Authority, to obtain the web server's public key, and 
follow other applicable HTTPS procedures.
    \15\ HTTP is the original communications protocol of the 
internet which enables a web browser to depict text, pictures, 
shapes, live data, and click targets on a web browser. However, 
username and password combinations are not encrypted in HTTP basic 
authentication.
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2. Modifications in Response to Industry Request
    13. The following section describes standards development efforts 
undertaken by NAESB in response to industry requests or through the 
normal course of WGQ activities that resulted in modifications to the 
Nomination Related Standards, QEDM Standards, and an effort that 
impacted multiple sets of standards. NAESB made corresponding 
revisions, where appropriate, to the related data sets and technical 
implementation as part of the standards development effort.
a. Nomination Related Standards
    14. NAESB revised existing Standards 1.3.27, 1.4.1, and 1.4.2 to 
add a new data element ``Capacity Block ID'' to allow a Service 
Requester to determine which primary point rights of the contract their 
segmented nomination \16\ is using and eliminate an existing manual 
business process from the TSP to automate the business process.
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    \16\ In order for a Service Requester to have control over its 
segmented nomination(s), the Transportation Service Provider (TSP) 
will require a ``Capacity Block ID'' to be submitted with each 
nomination line item specifying a Transaction Type of ``Segmented.''
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b. Quadrant Electronic Delivery Mechanisms Related Standards
    15. NAESB developed two new standards, Standard 4.3.107 to 
establish a standard data retention period for retrieval of 
Operationally Available data from the Informational Postings website, 
and Standard 4.3.108, to establish a standard data retention period for 
retrieval of Notices for the subcategories of Critical, Non-Critical 
and Planned Service Outage from the Informational Postings website.

[[Page 12882]]

c. Revisions Impacting Multiple Standards
    16. NAESB revised multiple standards \17\ and data sets \18\ to 
remove references to the term ``gigacalories'' and add the term 
``gigajoules,'' consistent with the standard quantity for nominations, 
confirmations, and scheduling in Mexico.
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    \17\ NAESB WGQ Version 3.2 Standards 1.3.14, 1.3.15, 1.3.82, and 
3.3.3.
    \18\ NAESB WGQ Version 3.2 Standards 0.4.1 through 0.4.3, 1.4.1, 
1.4.3 through 1.4.6, 2.4.1, 2.4.6, 2.4.17, 3.4.1, 3.4.2, 5.4.24 
through 5.4.26.
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d. Other Material in NAESB's Report
    17. NAESB revised multiple data sets which impacted technical 
implementation documentation only.
    18. Further, NAESB revised its optional model contracts and 
corresponding Mexican and Canadian Addendums to reflect a standard 
digital representation of natural gas trade events. NAESB states that 
these revisions are intended to capitalize on smart contracts and 
distributed ledger technologies.

B. Standards Proposed Not To Be Incorporated by Reference

    19. We propose to continue our past practice \19\ of not 
incorporating by reference into our regulations any optional model 
contracts because we do not require the use of these contracts and 
therefore we do not need to include them in our regulations.\20\ In 
addition, consistent with our findings in past proceedings, we are not 
proposing to incorporate by reference the Wholesale Electric Quadrant/
WGQ eTariff Related Standards because the Commission adopted and posted 
its standards and protocols for electronic tariff filings.\21\
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    \19\ See, e.g., Standards for Bus. Practices of Interstate Nat. 
Gas Pipelines, Notice of Proposed Rulemaking, 83 FR 44521 (Aug. 31, 
2018), 164 FERC ] 61,125, at P 16 (2018) (WGQ Version 3.1 NOPR).
    \20\ Id., Standards for Bus. Practices of Interstate Nat. Gas 
Pipelines, Order. No. 587-V, 77 FR 43711 (Jul. 26, 2012), 140 FERC ] 
61,036, at n.11 (2012).
    \21\ WGQ Version 3.1 NOPR, 164 FERC ] 61,125 at P 16; Elec. 
Tariff Filings, Order No. 714, 73 FR 57515 (Oct. 3, 2008), 124 FERC 
] 61,270 (2008).
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C. Proposed Implementation Procedures

    20. We propose to continue the compliance filing requirements as 
revised in Order No. 587-V.\22\ We propose that compliance filings made 
in accordance with a final rule be made 120 days after issuance of a 
final rule in this proceeding or on the first business day thereafter 
if falling on a weekend or holiday, with an effective date 180 days 
from the date compliance filings are due in this proceeding or the 
first business day thereafter if falling on a weekend or holiday. As 
the Commission found in Order No. 587-V, adoption of the revised 
compliance filing requirements increases the transparency of the 
interstate natural gas pipelines' incorporation by reference of the 
NAESB WGQ Standards so that shippers and the Commission will know which 
tariff provision(s) implements each standard as well as the status of 
each standard.\23\
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    \22\ Order No. 587-V, 140 FERC ] 61,036 at PP 36-39.
    \23\ Trans-Union Interstate Pipeline L.P., 141 FERC ] 61,167, at 
P 36 (2012) (Order No. 587-V Compliance Order).
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    21. Consistent with our practice since Order No. 587-V, each 
pipeline must designate a single tariff section under which every NAESB 
WGQ Standard incorporated by reference by the Commission is listed.\24\ 
For each standard, the pipeline must specify in the tariff section or 
tariff sheet(s) listing all the NAESB standards:
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    \24\ Id. P 36; WGQ Version 3.1 NOPR, 164 FERC ] 61,125 at P 18.
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    (a) Whether the standard is incorporated by reference;
    (b) For those standards not incorporated by reference, the tariff 
provision that complies with the standard; or
    (c) For those standards with which the pipeline does not comply, an 
explanatory statement, including an indication of whether the pipeline 
has been granted a waiver, extension of time, or other variance with 
respect to compliance with the standard.\25\
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    \25\ Shippers can use the Commission's electronic tariff system 
to locate the tariff record containing the NAESB standards, which 
will indicate the docket in which any waiver or extension of time 
was granted.
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    Likewise, consistent with past practice, we will post on our 
eLibrary website (under Docket No. RM96-1-042) a sample tariff format, 
to provide filers an illustrative example to aid them in preparing 
their compliance filings.
    22. Consistent with our policy since Order No. 587-V,\26\ we 
propose that requests for waivers that do not meet the requirements set 
forth in Order No. 587-V will not be granted. In particular, as we 
explained in Order No. 587-V, waivers are unnecessary and will not be 
granted when the standard applies only on condition the pipeline 
performs a business function and the pipeline currently does not 
perform that function.\27\
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    \26\ Order No. 587-V, 140 FERC ] 61,036.
    \27\ Order No. 587-V Compliance Order, 141 FERC ] 61,167 at PP 
4, 38.
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    23. If the pipeline is requesting a continuation of an existing 
waiver or extension of time, it must include a table in its transmittal 
letter that identifies the standard for which the Commission granted a 
waiver or extension of time, and the docket number or order citation to 
the proceeding in which the Commission granted the waiver or extension 
of time. The pipeline also must present an explanation for why such 
waiver or extension of time should remain in force with regard to the 
WGQ Version 3.2 Standards.
    24. This continues our practice of having pipelines include in 
their tariffs a common location that identifies the way in which the 
pipeline is incorporating all the NAESB WGQ Standards and the standards 
with which it is required to comply.

III. Notice of Use of Voluntary Consensus Standards

    25. Office of Management and Budget Circular A-119 (section 11) 
(February 10, 1998) provides that Federal Agencies should publish a 
request for comment in a NOPR when the agency is seeking to issue or 
revise a regulation proposing to adopt a voluntary consensus standard 
or a government-unique standard. In this NOPR, we are proposing to 
incorporate by reference voluntary consensus standards developed by the 
WGQ.

IV. Incorporation by Reference

    26. The Office of the Federal Register requires agencies proposing 
to incorporate material by reference to discuss the ways that the 
materials it incorporates by reference are reasonably available to 
interested parties and how interested parties can obtain the 
materials.\28\ The regulations also require agencies to summarize, in 
the preamble of the final rule, the material that it incorporates by 
reference. The standards we are proposing to incorporate by reference 
consist of seven suites of NAESB WGQ Business Practice Standards that 
address a variety of topics and are designed to streamline the 
transactional processes for the wholesale natural gas industry by 
promoting a more competitive and efficient market. These include the: 
WGQ Additional Business Practice Standards; WGQ Nominations Related 
Business Practice Standards; WGQ Flowing Gas Related Business Practice 
Standards; WGQ Invoicing Related Business Practice Standards; Quadrant 
Electronic Delivery Mechanism Related Business Practice Standards; 
Capacity Release Related Business Practice Standards; and Internet 
Electronic Transport Related Business Practice

[[Page 12883]]

Standards. We summarize these standards below.
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    \28\ 1 CFR 51.5 (2020). See Incorporation by Reference, 79 FR 
66267 (Nov. 7, 2014).
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    27. The WGQ Additional Business Practice Standards address six 
areas: Creditworthiness; Storage Information; Gas/Electric Operational 
Communications; Operational Capacity; Unsubscribed Capacity; and 
Location Data Download.
    <bullet> The Creditworthiness related standards describe 
requirements for the exchange of information, notification, and 
communication between parties during the creditworthiness evaluation 
process.
    <bullet> The Storage Information related standards define the 
information to be provided to natural gas service requesters related to 
storage activities and/or balances.
    <bullet> The Gas/Electric Operational Communications related 
standards define communication protocols intended to improve 
coordination between the gas and electric industries in daily 
operational communications between transportation service providers and 
gas-fired power plants. The standards include requirements for 
communicating anticipated power generation fuel for the upcoming day as 
well as any operating problems that might hinder gas-fired power plants 
from receiving contractual gas quantities.
    <bullet> The Operational Capacity related standards define 
requirements of the transportation service provider related to the 
reporting and requesting of a transportation service provider's 
operational capacity, total scheduled quantity, and operationally 
available capacity.
    <bullet> The Unsubscribed Capacity related standards define 
requirements of the transportation service provider related to the 
reporting and requesting of a transportation service provider's 
available unsubscribed capacity.
    <bullet> The Location Data Download related standards define 
requirements for the use of codes assigned by the transportation 
service provider for locations and common codes for parties 
communicating electronically.
    28. The WGQ Nominations Related Business Practice Standards define 
the process by which a natural gas service requester with a natural gas 
transportation contract nominates (or requests) service from a pipeline 
or a transportation service provider for the delivery of natural gas.
    29. The WGQ Flowing Gas Related Business Practice Standards define 
the business processes related to the communication of entitlement 
rights of flowing gas at a location, of the entitlement rights on a 
contractual basis, of the management of imbalances, and of the 
measurement and gas quality information of the actual flow of gas.
    30. The WGQ Invoicing Related Business Practice Standards define 
the process for the communication of charges for services rendered 
(Invoice), communication of details about funds rendered in payment for 
services rendered (Payment Remittance), and communication of the 
financial status of a customer's account (Statement of Account).
    31. The Quadrant Electronic Delivery Mechanism Related Business 
Practice Standards define the framework for the electronic 
dissemination and communication of information between parties in the 
North American wholesale gas marketplace for Electronic Data 
Interchange/EDM transfers, batch flat file/EDM transfers, informational 
postings websites, Electronic Bulletin Boards/EDM, and interactive flat 
file/EDM.
    32. The Capacity Release Related Business Practice Standards define 
the business processes for communication of information related to the 
selling of all or any portion of a transmission service requester's 
contract rights.
    33. The Internet Electronic Transport Related Business Practice 
Standards define the implementation of various technologies necessary 
to communicate transactions and other electronic data using standard 
protocols for electronic commerce over the internet between trading 
partners.
    34. Our regulations provide that copies of the standards 
incorporated by reference may be obtained from NAESB at https://www.naesb.org// or (713) 356-0060. Copies of the standards may be 
inspected at the Federal Energy Regulatory Commission, Public Reference 
Room, 888 First Street NE, Washington, DC 20426, Phone: (202) 502-8371, 
https://www.ferc.gov/. However, at this time, the Commission has 
suspended access to the Commission's Public Reference Room due to the 
President's March 13, 2020 proclamation declaring a National Emergency 
concerning the Novel Coronavirus Disease (COVID-19).
    35. NAESB is a private consensus standards developer that develops 
voluntary wholesale and retail standards related to the energy 
industry. The procedures used by NAESB make its standards reasonably 
available to those affected by Commission regulations, which generally 
is comprised of entities that have the means to acquire the information 
they need to effectively participate in Commission proceedings. 
Participants can join NAESB, for an annual membership cost of $8,000, 
which entitles them to full participation in NAESB and enables them to 
obtain these standards at no additional cost. Non-members may obtain 
the Individual Standards Manual or Booklets for each of the seven 
Manuals by email for $250 per manual, which in the case of these 
standards would total $1,750. Non-members also may obtain the complete 
set of Standards Manuals, Booklets, and Contracts on USB flash drive 
for $2,000. NAESB also provides a free electronic read-only version of 
the standards for a three-business day period or, in the case of a 
regulatory comment period, through the end of the comment period. In 
addition, NAESB considers requests for waivers of the charges on a 
case-by-case basis depending on need.

V. Information Collection Statement

    36. The Office of Management and Budget (OMB) regulations require 
that OMB approve certain reporting, record keeping, and public 
disclosure requirements (information collection) imposed by an 
agency.\29\ Therefore, we are submitting our proposed information 
collection to OMB for review in accordance with section 3507(d) of the 
Paperwork Reduction Act of 1995. Upon approval of a collection of 
information, OMB will assign an OMB control number and an expiration 
date. Respondents subject to the filing requirements of a rule will not 
be penalized for failing to respond to these collections of information 
unless the collection of information displays a valid OMB control 
number.
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    \29\ 5 CFR 1320.11 (2020).
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    37. We solicit comments on our 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.
    38. Public Reporting Burden: The Commission's burden estimates for 
the proposals in this NOPR are for one-time implementation of the 
information collection requirements of this NOPR (including tariff 
filing, documentation of the process and procedures, and information 
technology work).
    39. The collections of information related to this NOPR fall under 
FERC-545 (Gas Pipeline Rates: Rate Change (Non-Formal)) \30\ and FERC-
549C (Standards for Business Practices of

[[Page 12884]]

Interstate Natural Gas Pipelines).\31\ The following estimates of 
reporting burden are related only to this NOPR and anticipate the costs 
to pipelines for compliance with our proposals in this NOPR. The burden 
estimates are primarily related to implementing these standards and 
regulations and will not result in ongoing costs.
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    \30\ FERC-545 covers rate change filings made by natural gas 
pipelines, including tariff changes.
    \31\ FERC-549C covers Standards for Business Practices of 
Interstate Natural Gas Pipelines.

                                                                     RM96-1-042 NOPR
                                         [Standards for Business Practices of Interstate Natural Gas Pipelines]
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                                         Number of     Annual number                                              Total annual burden      Annual costs
                                        respondents     of responses    Total number   Average burden hr.  per    hours & total annual    per respondent
                                           \32\        per respondent   of responses           response                cost \33\               ($)
                                                 (1)              (2)     (1) * (2) =  (4)....................  (3) * (4) = (5)........  (5) / (1) = (6)
                                                                                  (3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FERC-545 (one-time).................             178                1             178  10 hrs.; $1,010........  1,780 hrs.; $179,780...           $1,010
FERC-549C (one-time)................             178                1             178  100 hrs.; $10,100......  17,800 hrs.; $1,797,800          $10,100
                                     -------------------------------------------------------------------------------------------------------------------
    Total...........................  ..............  ...............             356  .......................  19,580 hrs.; $1,977,580  ...............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The one-time burden (for both the FERC-545 and FERC-549C) will take 
place in Year 1 and will be averaged over three years:
---------------------------------------------------------------------------

    \32\ The number of respondents is the number of entities in 
which a change in burden from the current standards to the proposed 
exists, not the total number of entities from the current or 
proposed standards that are applicable.
    \33\ The estimated hourly cost (salary plus benefits) provided 
in this section is based on the salary figures for May 2019 posted 
by the Bureau of Labor Statistics for the Utilities sector 
(available at https://www.bls.gov/oes/current/naics3_221000.htm) and 
scaled to reflect benefits using the relative importance of employer 
costs for employee compensation from June 2020 (available at https://www.bls.gov/news.release/ecec.nr0.htm). The hourly estimates for 
salary plus benefits are:
    Computer and Information Systems Manager (Occupation Code: 11-
3021), $101.58.
    Computer and Information Analysts (Occupation Code: 15-
1120(1221), $87.42.
    Electrical Engineer (Occupation Code: 17-2071), $70.19.
    Legal (Occupation Code: 23-0000), $142.65.
    The average hourly cost (salary plus benefits), weighting all of 
these skill sets evenly, is $100.50. We round it to $101/hour.

FERC-545: 1,780 hours / 3 = 593 hours/year over three years
FERC-549C: 17,800 hours / 3 = 5,933 hours/year over three years

    The number of responses is also averaged over three years (for both 
the FERC-545 and FERC-549C):

FERC-545: 178 responses / 3 = 59 responses/year
FERC-549C: 178 responses / 3 = 59 responses/year

    The responses and burden for Years 1-3 will total respectively as 
follows:

Year 1: 59 responses; 593 hours (FERC-545); 5,933 hours (FERC-549C)
Year 2: 59 responses; 593 hours (FERC-545); 5,933 hours (FERC-549C)
Year 3: 59 responses; 593 hours (FERC-545); 5,933 hours (FERC-549C)

    Title: FERC-545, Gas Pipeline Rates: Rates Change (Non-Formal); 
FERC-549C, Standards for Business Practices of Interstate Natural Gas 
Pipelines.
    Action: Proposed information collections.
    OMB Control Nos.: 1902-0154 (FERC-545), 1902-0174 (FERC-549C).
    Respondents: Business or other for profit (e.g., Natural Gas 
Pipelines, applicable to only a few small businesses).
    Frequency of Responses: One-time implementation (related to 
business procedures, capital/start-up).
    Necessity of Information: In response to the recommendations in the 
Sandia report, the proposals in this NOPR would, if implemented, 
upgrade current business practices and communication standards by 
updating the Quadrant EDM Related Standards and IET Related Standards 
to specifically: (1) Require the implementation of fixes or patches for 
known vulnerabilities as soon as reasonably practicable in coordination 
with other trading partners; (2) specify notification timelines to 
provide notice to trading partners of any systems or software that have 
not been updated and the potential impact of using the vulnerable 
system; (3) include both specific and broad adoptions of system 
security measures and specific notification and coordination during 
outages with affected trading partners; (4) maintain a minimum 
encryption strength of 128 bits, (5) specify that OpenPGP should be 
used to create public and private keys for privacy and digital 
signature applications; (6) specify HTTPS whenever secure communication 
is required to protect information in transit and support overall 
privacy needs; (7) use the largest feasible key length consistent with 
implementation of current business processes; (8) state that secure 
websites should employ individual user credentials; and (9) encourage 
security assessments and coordination between customers, vendors, and 
trading partners.
    40. Further, in response to industry requests or through the normal 
course of WGQ activities, the proposals in this NOPR would, if 
implemented, upgrade current business practices and communication 
standards by specifically: (1) Updating the Nominations Related 
Standards to allow a Service Requester to determine which rights of the 
contract its segmentation nomination is using; (2) updating the 
Quadrant EDM Related Standards to (i) define a NAESB standard time 
frame for information to be retained on a pipeline's Informational 
Postings website, (ii) allow for processing functions at the line item 
level on Customer Activities websites and allow for the use of icons 
and/or graphical control elements for navigation and/or processing 
functions, and (iii) make minor revisions designed to add clarity, 
update the minimum technical characteristics to account for changes in 
technology since the previous version (Version 3.1) of the WGQ 
standards, and update the minimum and suggested operating systems and 
web browsers that entities should support; (3) updating multiple sets 
of standards to remove references to the term ``gigacalories'' and add 
the term ``gigajoules'' as the standard quantity for nominations, 
confirmations, and scheduling in Mexico; and (4) revising the NAESB WGQ 
data sets or other technical implementation documentation while not 
resulting in modifications to the underlying business practice 
standards. The package of standards also includes minor corrections. 
The implementation of these data requirements will provide additional 
transparency to Informational Postings websites and will improve 
communication standards. The implementation of these standards and 
regulations will promote the additional efficiency and reliability of 
the natural gas industries' operations thereby helping the Commission 
to carry out its responsibilities under the NGA. In

[[Page 12885]]

addition, the Commission's Office of Enforcement will use the data for 
general industry oversight.
    Internal Review: We have reviewed the requirements pertaining to 
business practices of interstate natural gas pipelines and made a 
preliminary determination that the proposed revisions are necessary to 
establish a more efficient and integrated pipeline grid. These 
requirements conform to our plan for efficient information collection, 
communication, and management within the natural gas pipeline 
industries. We determined through our internal review, that there is 
specific, objective support for the burden estimates associated with 
the information requirements.
    41. Interested persons may obtain information on the reporting 
requirements by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street NE, Washington, DC 20426 [Attention: Ellen 
Brown, Office of the Executive Director], email: 
<a href="/cdn-cgi/l/email-protection#3074514451735c555142515e535570565542531e575f46"><span class="__cf_email__" data-cfemail="da9ebbaebb99b6bfbba8bbb4b9bf9abcbfa8b9f4bdb5ac">[email protected]</span></a>, telephone: (202) 502-8663, fax: (202) 273-0873.
    42. Comments concerning the collection of information(s) and the 
associated burden estimate(s), should be sent to the contact listed 
above and to the Office of Management and Budget, Office of Information 
and Regulatory Affairs, Washington, DC 20503 [Attention: Desk Officer 
for the Federal Energy Regulatory Commission, telephone: (202) 395-
0710; fax: (202) 395-4718].

VI. Environmental Analysis

    43. 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.\34\ The 
actions that we propose to take 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 rules regarding sales, exchange, and 
transportation of natural gas that require no construction of 
facilities.\35\ Therefore, an environmental review is unnecessary and 
has not been prepared as part of this NOPR.
---------------------------------------------------------------------------

    \34\ Regulations Implementing the Nat'l Envt'l Pol'y Act, Order 
No. 486, FERC Stats. & Regs. ] 30,783 (1987).
    \35\ See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), and 380.4(a)(27) 
(2020).
---------------------------------------------------------------------------

VII. Regulatory Flexibility Act

    44. The Regulatory Flexibility Act of 1980 (RFA) \36\ generally 
requires a description and analysis of proposed rules that will have 
significant economic impact on a substantial number of small entities. 
The Commission is not required to make such analysis if proposed 
regulations would not have such an effect.
---------------------------------------------------------------------------

    \36\ 5 U.S.C. 601-612.
---------------------------------------------------------------------------

    45. Approximately 178 interstate natural gas pipelines, both large 
and small, are potential respondents subject to the requirements 
adopted by this rule. Most of the natural gas pipelines regulated by 
the Commission do not fall within the RFA's definition of a small 
entity,\37\ which is currently defined for natural gas pipelines as a 
company that, in combination with its affiliates, has total annual 
receipts of $30 million or less.\38\ For the year 2019, only 11 
companies not affiliated with larger companies had annual revenues in 
combination with its affiliates of $30 million or less and therefore 
could be considered a small entity under the RFA. This represents about 
six percent of the total universe of potential respondents that may 
have a significant burden imposed on them. We estimate that the one-
time implementation cost of the proposals in this NOPR is $1,977,580 
(or $11,110 per entity, regardless of entity size).\39\ We do not 
consider the estimated $11,110 impact per entity to be significant. 
Moreover, these requirements are designed to benefit all customers, 
including small businesses that must comply with them. Further, as 
noted above, adoption of consensus standards helps ensure the 
reasonableness of the standards by requiring that the standards draw 
support from a broad spectrum of industry participants representing all 
segments of the industry. Because of that representation and the fact 
that industry conducts business under these standards, the Commission's 
regulations should reflect those standards that have the widest 
possible support.
---------------------------------------------------------------------------

    \37\ See 5 U.S.C. 601(3) citing section 3 of the Small Business 
Act (SBA), 15 U.S.C. 623. Section 3 of the SBA defines a ``small 
business concern'' as a business which is independently owned and 
operated, and which is not dominant in its field of operation 
(2019).
    \38\ 13 CFR 121.201 (Subsector 486-Pipeline Transportation; 
North American Industry Classification System code 486210; Pipeline 
Transportation of Natural Gas) (2020). ``Annual Receipts'' are total 
income plus cost of goods sold.
    \39\ This number is derived by dividing the total cost figure by 
the number of respondents. $1,977,580/178 = $11,110.
---------------------------------------------------------------------------

    46. Accordingly, pursuant to section 605(b) of the RFA,\40\ the 
regulations proposed herein should not have a significant economic 
impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \40\ 5 U.S.C. 605(b).
---------------------------------------------------------------------------

VIII. Comment Procedures

    47. We invite interested persons to submit 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. 
Comments are due April 19, 2021. Comments must refer to Docket No. 
RM96-1-042, and must include the commenter's name, the organization 
they represent (if applicable), and their address in their comments.
    48. We encourage comments to be filed electronically via the 
eFiling link on the Commission's website at https://www.ferc.gov/. We 
accept most standard word processing formats. Documents created 
electronically using word processing software should be filed in native 
applications or print-to-PDF format and not in a scanned format. 
Commenters filing electronically do not need to make a paper filing.
    49. Commenters that are not able to file comments electronically 
may mail or hand-deliver an original of their comments. Mailed comments 
should be addressed to: Federal Energy Regulatory Commission, Secretary 
of the Commission, 888 First Street NE, Washington, DC 20426. Hand-
delivered comments should be delivered to: Federal Energy Regulatory 
Commission, 12225 Wilkins Avenue, Rockville, Maryland 20852.
    50. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

IX. Document Availability

    51. In addition to publishing the full text of this document in the 
Federal Register, we provide all interested persons an opportunity to 
view and/or print the contents of this document via the internet 
through the Commission's Home Page (https://www.ferc.gov/). At this 
time, we have suspended access to the Commission's Public Reference 
Room due to the President's March 13, 2020 proclamation declaring a 
National Emergency concerning the Novel Coronavirus Disease (COVID-19).
    52. From the Commission's Home Page on the internet, this 
information is available on eLibrary. The full text of this document is 
available on eLibrary in PDF and Microsoft Word format for viewing, 
printing, and/or downloading.

[[Page 12886]]

To access this document in eLibrary, type the docket number excluding 
the last three digits of this document in the docket number field.
    53. User assistance is available for eLibrary and our website 
during normal business hours from the Commission's Online Support at 
(202) 502-6652 (toll free at 1-866-208-3676) or email at 
<a href="/cdn-cgi/l/email-protection#fb9d9e899894959792959e888e8b8b94898fbb9d9e8998d59c948d"><span class="__cf_email__" data-cfemail="f79192859498999b9e999284828787988583b791928594d9909881">[email protected]</span></a>, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
<a href="/cdn-cgi/l/email-protection#671712050b0e04491502010215020904021508080a270102150449000811"><span class="__cf_email__" data-cfemail="2d5d584f41444e035f484b485f48434e485f4242406d4b485f4e034a425b">[email protected]</span></a>.

List of Subjects in 18 CFR Part 284

    Natural gas.

    By direction of the Commission.

    Issued: February 18, 2021.
Kimberly D. Bose,
Secretary.

    In consideration of the foregoing, we propose to amend part 284, 
chapter I, title 18, Code of Federal Regulations, as follows.

PART 284--CERTAIN SALES AND TRANSPORTATION OF NATURAL GAS UNDER THE 
NATURAL GAS POLICY ACT OF 1978 AND RELATED AUTHORITIES

0
1. The authority citation for part 284 continues to read as follows:

    Authority:  15 U.S.C. 717-717z, 3301-3432; 42 U.S.C. 7101-7352; 
43 U.S.C. 1331-1356.

0
2. In Sec.  284.12, revise paragraphs (a)(1) and (2) to read as 
follows:


Sec.  284.12   Standards for pipeline business operations and 
communications.

    (a) Incorporation by reference of NAESB standards. (1) An 
interstate pipeline that transports gas under subparts B or G of this 
part must comply with the business practices and electronic 
communications standards as promulgated by the North American Energy 
Standards Board, as incorporated by reference in paragraphs (a)(1)(i) 
through (vii) of this section.
    (i) Additional Standards (Version 3.2, August 15, 2020);
    (ii) Nominations Related Standards (Version 3.2, August 15, 2020);
    (iii) Flowing Gas Related Standards (Version 3.2, August 15, 2020);
    (iv) Invoicing Related Standards (Version 3.2, August 15, 2020);
    (v) Quadrant Electronic Delivery Mechanism Related Standards 
(Version 3.2, August 15, 2020);
    (vi) Capacity Release Related Standards (Version 3.2, August 15, 
2020); and
    (vii) internet Electronic Transport Related Standards (Version 3.2, 
August 15, 2020).
    (2) This incorporation by reference was approved by the Director of 
the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 
51. Copies of these standards may be obtained from the North American 
Energy Standards Board, 801 Travis Street, Suite 1675, Houston, TX 
77002, Phone: (713) 356-0060. NAESB's website is at https://www.naesb.org/. Copies may be inspected at the Federal Energy 
Regulatory Commission, Public Reference Room, 888 First Street NE, 
Washington, DC 20426, Phone: (202) 502-8371, https://www.ferc.gov/, or 
at the National Archives and Records Administration (NARA). For 
information on the availability of this material at NARA, email 
<a href="/cdn-cgi/l/email-protection#16707372647371387a7371777a567877647738717960"><span class="__cf_email__" data-cfemail="9cfaf9f8eef9fbb2f0f9fbfdf0dcf2fdeefdb2fbf3ea">[email protected]</span></a>, or go to: https://www.archives.gov/federal-register/cfr/ibr-locations.html.

[FR Doc. 2021-03797 Filed 3-4-21; 8:45 am]
BILLING CODE 6717-01-P


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