138 FERC ¶ 61,124 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Part 284 

[Docket No. RM96-1-037] 

Standards for Business Practices for Interstate Natural Gas Pipelines 

(February 16, 2012) 

AGENCY: Federal Energy Regulatory Commission. 

ACTION: Notice of Proposed Rulemaking. 

SUMMARY: The Federal Energy Regulatory Commission (Commission) is proposing 

to amend its regulations at 18 CFR § 284.12 to incorporate by reference the latest version 

(Version 2.0) of business practice standards adopted by the Wholesale Gas Quadrant of 

the North American Energy Standards Board (NAESB) applicable to natural gas 

pipelines.1 The Commission also proposes to provide guidance on the standards the 

Commission applies to requests for waivers or extensions of time to comply with NAESB 

Standards. These standards can be obtained from NAESB at 1301 Fannin, Suite 2350, 

Houston, TX 77002, telephone: (713) 356-0060, http://www.naesb.org, and are available 

for viewing in the Commission’s Public Reference Room. 

DATES: Comments are due [insert date 30 days after publication in the FEDERAL 

REGISTER]. 

 1

 The Commission’s proposal includes incorporation of the minor corrections and 

errata to the Version 2.0 Standards made by NAESB and reported to the Commission on 

June 28, 2011, October 11, 2011 and December 22, 2011. 
Docket No. RM96-1-037 ii

ADDRESSES: Comments, identified by docket number, may be filed in the following 

ways: 

 Electronic Filing through http://www.ferc.gov. Documents created electronically 

using word processing software should be filed in native applications or print-toPDF format and not in a scanned format. 

 Mail/Hand Delivery: Those unable to file electronically may mail or hand-deliver 

comments to: Federal Energy Regulatory Commission, Secretary of the 

Commission, 888 First Street, NE, Washington, DC 20426. 

FOR FURTHER INFORMATION CONTACT: 

Adam Bednarczyk (technical issues) 

Office of Energy Market Regulation 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

(202) 502-6444 

Tony Dobbins (technical issues) 

Office of Energy Policy and Innovation 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

(202) 502-6630 

Gary D. Cohen (legal issues) 

Office of the General Counsel 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

(202) 502-8321 

SUPPLEMENTARY INFORMATION: 
138 FERC ¶ 61,124 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Standards for Business Practices for Docket No. RM96-1-037 

 Interstate Natural Gas Pipelines 

NOTICE OF PROPOSED RULEMAKING 

(February 16, 2012) 

1. The Federal Energy Regulatory Commission (Commission) proposes to amend its 

regulations at 18 CFR 284.12 to incorporate by reference the latest version (Version 2.0) 

of business practice standards adopted by the Wholesale Gas Quadrant (WGQ) of the 

North American Energy Standards Board (NAESB) applicable to natural gas pipelines. 

The Commission also proposes to provide guidance on the standards the Commission 

applies to requests for waivers or extensions of time to comply with NAESB Standards. 

The Commission’s proposal includes incorporation of the minor corrections and errata 

made by NAESB and reported to the Commission on June 28, 2011, October 11, 2011, 

and December 22, 2011. 

I. Background

2. 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 
Docket No. RM96-1-037 - 4 - 

the Order No. 587 series of orders,2

 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 these standards will become part of the 

Commission’s regulations and compliance by interstate natural gas pipelines will become 

mandatory. 

3. On March 4, 2011, NAESB filed a report informing the Commission that it had 

adopted and ratified Version 2.0 of its business practice standards applicable to natural 

gas pipelines. The Version 2.0 Standards revised the Version 1.9 Standards to include: 

(1) standards to support gas-electric interdependency; (2) standards created for Capacity 

Release redesign due to the elimination of Electronic Data Interchange (EDI) for 

Capacity Release Upload information; (3) standards to support the Electronic Delivery 

Mechanism (EDM); (4) standards to support the Customer Security Administration 

(CSA) Process; (5) standards for pipeline postings of information regarding waste heat; 

and (6) minor technical maintenance revisions designed to more efficiently process 

wholesale natural gas transactions.

4. On June 28, 2011, NAESB filed a report informing the Commission that it had 

made modifications to the NAESB WGQ Version 1.9 and 2.0 Standards to correct 

various minor errors. The errata corrections make minor revisions to the NAESB WGQ 

 2

 This series of orders began with the Commission’s issuance of Standards for 

Business Practices of Interstate Natural Gas Pipelines, Order No. 587, FERC Stats. 

& Regs. ¶ 31,038 (1996). 
Docket No. RM96-1-037 - 5 - 

Standards and Data Elements including revisions to the: (1) Datasets for Additional 

Standards; (2) Nomination Related Datasets; (3) Flowing Gas Related Standards; 

(4) Invoicing Related Datasets; (5) EDM Related Standards; and (6) Capacity Release 

Related Standards and Datasets.

5. Further, on October 11, 2011, NAESB filed a report informing the Commission 

that it had made additional modifications to the NAESB WGQ Version 2.0 Standards to 

correct various minor errors in the Nominations Related and Capacity Release Related 

Datasets. 

6. Finally, on December 22, 2011, NAESB filed a report informing the Commission 

that it had made additional modifications to the NAESB WGQ Version 1.9 and 2.0 

Standards to correct various minor errors. The errata corrections make minor revisions to 

the NAESB WGQ Standards and Datasets including revisions to the: (1) Nominations 

Related Datasets; (2) Capacity Release Related Datasets; and (3) Quadrant Electronic 

Delivery Mechanism Related Standards.

II. Significant Changes and Additions Contained in the Version 2.0 Standards

A. Gas-Electric Communications

7. In Order Nos. 698 and 698-A,3

 the Commission incorporated by reference the 

NAESB Wholesale Electric Quadrant (WEQ) and WGQ Gas/Electric Coordination 

Standards. These standards were adopted to ensure that pipelines have relevant planning 

 3 Standards for Business Practices for Interstate Natural Gas Pipelines; Standards 

for Business Practices for Public Utilities, Order No. 698, FERC Stats. & Regs. ¶ 31,251, 

order on clarification and reh’g, Order No. 698-A, 121 FERC ¶ 61,264 (2007). 
Docket No. RM96-1-037 - 6 - 

information to assist in maintaining the operational integrity and reliability of pipeline 

service, as well as to provide gas-fired power plant operators with information as to 

whether hourly flow deviations can be honored. The standards also required electric 

transmission operators and power plant operators to sign up to receive operational flow 

order notices from connecting pipelines as well as other critical notices. These standards 

ensured that operators of the electric grid could stay abreast of developments involving 

natural gas pipelines that can affect the reliability of electric service. The standards 

required that, upon request, a gas-fired power plant operator must provide to the 

appropriate independent electric balancing authority or electric reliability coordinator 

pertinent information regarding its service levels for gas transportation (firm or 

interruptible) and for gas supply (firm, fixed or variable quantity, or interruptible).4

8. In the NAESB WGQ Version 2.0 Standards, NAESB modified and developed 

additional standards to further enhance that coordination. NAESB made modifications to 

its WGQ Standards 4.3.28, 4.3.29, and 5.3.38 and developed new Standards 5.3.70 and 

5.3.71 to enhance the clarity of the content and format of critical, non-critical, and 

planned service outage notices issued by pipelines. These modifications were made to 

allow Transportation Service Providers the flexibility to communicate additional clarity 

beyond the currently defined notice types through the addition of 15 new notice types. 

The expansion from the current 12 notice types to 27 notice types increases the ability of 

 4

 Order No. 698, FERC Stats. & Regs. ¶ 31,251 at P 12-13. 
Docket No. RM96-1-037 - 7 - 

pipelines to detail the subject matter of the notices.5

 The expansion also allows the 

notices to be easily identified and sorted, thereby promoting easier prioritization and 

organization of these communications. Some of the notices that may be of particular 

relevance to coordination between the gas and electric industries are: operational alerts; 

over-under performance; pipeline conditions; planned service outages; storage and 

weather alerts. 

9. NAESB modified the existing gas-electric coordination WGQ Standards 0.2.1 

through 0.2.3, 0.3.11 through 0.3.15; and created a new Standard 0.2.4 to further define 

the roles and responsibilities of each participant under the Gas/Electric Operational 

Communication Standards promulgated in Order No. 698. Specifically, NAESB 

modified the WGQ Standards in order to define the terms Reliability Coordinator and 

Power Plant Gas Coordinator to replace existing terminology of Regional Transmission 

Organizations, Independent System Operators, any other appropriate independent 

transmission operators, and Power Plant Operators respectively. NAESB modified WGQ 

Standard 0.3.14 to change the parties to whom pipelines are required to provide 

notification of operational flow orders and other critical notices. Pipelines are now 

 5

 The new Version 2.0 Notice Types subjects are: Computer System Status; 

Customer Services Update; Gas Quality; Imbalance Trading; Location Change; 

Operational Alert; Over-Under Performance; Pipeline Conditions; Planned Service 

Outages; Storage; Weather Alert; Capacity Release; Cash Out (cash liquidation of 

transportation imbalances); PTR (Plant Thermal Reduction) Percentage (this is the 

amount a nomination is to be reduced due to natural gas processing); and Scheduling 

Alert (information regarding scheduled gas quantities and potential revisions and/or 

adjustments). 
Docket No. RM96-1-037 - 8 - 

required to provide Balancing Authorities and/or Reliability Coordinators, and Power 

Plant Gas Coordinators such information. 

B. Capacity Release Upload Transactions

10. In the NAESB WGQ Version 2.0 Standards, NAESB sought to modify electronic 

capacity release transaction standards to reflect NAESB’s elimination of the largely 

unused EDI requirements for Capacity Release Upload information. NAESB added two 

standards related to notices provided by Transmission Service Providers and one standard 

related to error messages. The NAESB WGQ Version 2.0 Standards also add four new 

capacity release standard datasets to replace fourteen Version 1.9 Datasets that NAESB 

deleted in an effort to restructure and simplify capacity release transactional information. 

C. Electronic Delivery Mechanism (EDM)

11. In the NAESB WGQ Version 2.0 Standards, NAESB adopted several standards to 

ensure the consistency of Transportation Service Provider website data labels as well as 

the ability to provide Informational Postings report downloads in a comma-separatedvalue (CSV) file format. These changes were undertaken to ensure that NAESB’s 

technical standards remain consistent with current technical practices. 

D. Customer Security Administration 

12. In the NAESB WGQ Version 2.0 Standards, NAESB adopted Standard 4.3.100 to 

support the CSA processes. This new standard establishes a timeline for a Transportation 

Service Provider to respond to a request from a service requester for information, such as 

user name and security privileges, regarding those parties permitted to access the 

Transportation Service Provider’s “Customer Activities” Website on the service 
Docket No. RM96-1-037 - 9 - 

requester’s behalf. The new standard also establishes the number of representatives a 

service requester can authorize to receive such information and details the related user 

management responsibilities of the service requester. 

E. Waste Heat Recovery Feasibility

13. NAESB sought to facilitate the Commission’s FY 2009 – 2014 Strategic Plan6

objective of evaluating the feasibility of installing waste heat recovery systems as a way 

to promote the efficient design and operation of jurisdictional natural gas facilities. 

NAESB WGQ Version 2.0 Standard 4.3.23 specifies the location where information 

regarding the feasibility of waste heat recovery is to be posted on the Informational 

Postings sections of pipelines’ websites. 

F. Operationally Available and Unsubscribed Capacity

14. In the NAESB WGQ Version 2.0 Standards, NAESB added several new 

Standards, 0.3.18 through 0.3.22, and replaced an existing Dataset 5.4.13 with new 

Datasets 0.4.2 and 0.4.3, to further specify the information on operationally available and 

unsubscribed capacity that pipelines disseminate. NAESB indicates that these standards 

are intended to specify the Business Practice Standards and Dataset requirements for 

reporting operationally available and unsubscribed capacity. NAESB included these new 

Business Practice Standards in a new section entitled “Operating Capacity and 

Unsubscribed” in its Business Practice Standards for Additional Standards. 

 6

 Federal Energy Regulatory Commission, Strategic Plan, FY 2009 – 2014 at 25. 

http://www.ferc.gov/about/strat-docs/FY-09-14-strat-plan-print.pdf.
Docket No. RM96-1-037 - 10 - 

G. Clean up and Miscellaneous Revisions 

15. In the NAESB WGQ Version 2.0 Standards, NAESB also continued the process of 

making minor clarifications and corrections to existing standards including: (1) revising 

the formatting, appearance, or descriptions; (2) clarifying or correcting code values to 

tables; and (3) making minor non-substantive changes. 

III. Discussion

A. Proposed Action

16. In this NOPR, the Commission proposes to incorporate by reference in its 

regulations Version 2.0 of the NAESB WGQ's consensus business practice standards,7

with certain exceptions.8

 Adoption of the Version 2.0 Standards will continue the 

 7

 In its Version 2.0 Standards, the WGQ made the following changes to its Version 

1.9 Standards: 

a. It revised Principle 4.1.32; Definitions 0.2.1, 0.2.2, 0.2.3, 5.2.1, 5.2.4, and 

5.2.5; Standards 0.3.11 through 0.3.15, 2.3.34, 4.3.16, 4.3.23, 4.3.28, 

4.3.29, 4.3.54, 5.3.1 through 5.3.14, 5.3.16, 5.3.19 through 5.3.21, 5.3.24 

through 5.3.27, 5.3.31 through 5.3.33, 5.3.38, 5.3.42, 5.3.48, 5.3.50, 5.3.51, 

5.3.60, 5.3.62, 5.3.62a, and 5.3.63 through 5.3.69; and Datasets 1.4.1 

through 1.4.6, 2.4.1, 2.4.3, 2.4.4, 2.4.6, 2.4.7, 3.4.1, 3.4.4, 5.4.14 through 

5.4.17, and 5.4.20 through 5.4.22. 

b. It added Definition 0.2.4; Standards 0.3.18 through 0.3.22, 4.3.100 through 

4.3.102, 5.3.70 through 5.3.72; and Datasets 0.4.2, 0.4.3, and 5.4.24 

through 5.4.27. 

c. It deleted Standards 5.3.17, 5.3.30, 5.3.43, and 5.3.61; and Datasets 5.4.1 

through 5.4.13, 5.4.18, and 5.4.19. 

8

 We discuss in sub-section A.1 below, those NAESB WGQ Version 2.0 

Standards that we propose not to incorporate by reference. 
Docket No. RM96-1-037 - 11 - 

process of updating and improving NAESB’s business practice standards for the benefit 

of the wholesale gas market. 

17. 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.9

 Moreover, because the industry 

has to conduct 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 (NTT&AA), Congress 

affirmatively requires federal agencies to use technical standards developed by voluntary 

consensus standards organizations, like NAESB, as a means to carry out policy objectives 

or activities.10

1. Proposal Not to Adopt Certain Standards

a. Standards Not Adopted in Previous Rulemakings

18. The Commission is continuing its past practice and is not proposing to incorporate 

by reference Standards 4.3.4 and 10.3.2, because they are inconsistent with the 

 9

 The NAESB process first requires a super-majority vote of 17 out of 25 members 

of the WGQ's Executive Committee with support from at least two members from each 

of the five industry segments – Distributors, End Users, Pipelines, Producers, and 

Services (including marketers and computer service providers). For final approval, 67 

percent of the WGQ's general membership voting must ratify the standards. 

10 Pub. L. No. 104-113, section 12(d), 110 Stat. 775 (1996), 15 U.S.C. 272, note 

(1997). 
Docket No. RM96-1-037 - 12 - 

Commission’s record retention requirement in 18 CFR 284.12(b)(3)(v).11 Also, 

consistent with past practice, we are not incorporating NAESB's interpretation of its 

standards into the Commission's regulations because, while interpretations may provide 

useful guidance, they are not determinative and we will not require pipelines to comply 

with NAESB’s interpretations.12 Likewise, consistent with prior practice we will not 

incorporate optional contracts into our regulations because the Commission does not 

require the use of these contracts.13 In addition, the Commission is not proposing to 

incorporate by reference the WEQ/WGQ eTariff Related Standards because the 

Commission has already adopted standards and protocols for electronic tariff filings 

based on the NAESB Standards.14 

b. Standards 0.3.19 and 0.3.21

19. NAESB adopted new Standards15 and Datasets16 in Version 2.0 designed to 

specify the business practices for the dissemination of operationally available and 

 11 See, e.g., Standards for Business Practices for Interstate Natural Gas Pipelines, 

Final Rule, Order No. 587-T, FERC Stats. & Regs. ¶ 31,289, at P 5 & n.9 (2009). 

12 Standards for Business Practices and Communication Protocols for Public 

Utilities, Order No. 676-E, FERC Stats. & Regs. ¶ 31,299, at n.16 (2009). 

13 Id. 

14 See Electronic Tariff Filings, FERC Stats. & Regs. ¶ 31,276 (2008). 

15 NAESB WGQ Version 2.0 Standards 0.3.18 through 0.3.22. 

16 NAESB WGQ Version 2.0 Datasets 0.4.2 and 0.4.3 were created to replace 

deleted NAESB WGQ Version 1.9 Dataset 5.4.13 (Operationally Available and 

Unsubscribed Capacity). 
Docket No. RM96-1-037 - 13 - 

unsubscribed capacity information as required under section 284.13 of the Commission’s 

regulations. The new NAESB WGQ Standards are intended to provide industry-wide 

standardization of certain data elements required to be provided as part of the 

Commission’s reporting requirements for interstate pipelines. However, two of the 

proposed standards, WGQ Standards 0.3.19 and 0.3.21, appear to be inconsistent with the 

Commission’s posting regulations. 

20. NAESB WGQ Standard 0.3.19 states: 

Operationally Available Capacity (OAC), Operating Capacity (OPC) 

and Total Scheduled Quantity (TSQ) are associated information and 

should be reported at the same level. Transportation Service 

Providers should report OAC, OPC and TSQ at, at least one of, 

point, segment or zone level. 

21. While this standard allows the pipeline to choose whether to post Operationally 

Available Capacity, Operating Capacity, and Total Scheduled Quantity at either a point, 

segment or zone level, section 284.13(d)17 of our regulations does not permit the pipeline 

 17 18 CFR 284.13(d). Section 284.13(d) states in relevant part: 

d) Capacity and flow information. (1) An interstate pipeline 

must provide on its Internet web site and in downloadable file 

formats, in conformity with §284.12 of this part, equal and 

timely access to information relevant to the availability of all 

transportation services whenever capacity is scheduled, 

including, but not limited to, the availability of capacity at 

receipt points, on the mainline, at delivery points, and in 

storage fields, whether the capacity is available directly from 

the pipeline or through capacity release, the total design 

capacity of each point or segment on the system, the amount 

scheduled at each point or segment whenever capacity is 

scheduled, and all planned and actual service outages or 

reductions in service capacity. 
Docket No. RM96-1-037 - 14 - 

to limit the posting to a point, segment, or zone, but requires posting at all receipt and 

delivery points and on the mainline. Section 284.13(d) states that the pipeline must post 

“information relevant to the availability of all transportation services whenever capacity 

is scheduled, including, but not limited to, the availability of capacity at receipt points, on 

the mainline, at delivery points, and in storage fields.” Because the NAESB standards 

are intended to implement Commission posting requirements, we are concerned about 

inconsistencies between those standards and the regulations. We therefore are proposing 

not to incorporate by reference Standard 0.3.19 and pipelines are expected to continue to 

post information in accordance with § 284.13 of the Commission’s regulations. 

22. NAESB WGQ Standard 0.3.21 states: 

The Total Scheduled Quantity and the Operationally 

Available Capacity information should be updated by the 

Transportation Service Provider to reflect scheduling changes 

and be reported promptly following the scheduling deadline 

associated with the timely and evening nominations cycles. 

While this standard requires the posting of information only at the timely and evening 

nominations cycles, section 284.13(d) does not limit the posting to only two cycles but 

requires the posting of capacity availability and scheduled capacity “whenever capacity is 

scheduled.” This would include postings for the two intra-day cycles during the gas 

day.18

 18 NAESB Standard 1.3.2 established four nomination cycles (Timely, Evening, 

Intra-day 1, and Intra-Day 2). 
Docket No. RM96-1-037 - 15 - 

23. We therefore are proposing not to incorporate by reference Standard 0.3.21. 

While NAESB is considering a revision to Standard 0.3.21, pipelines are expected to 

continue to adhere to the regulations and post available capacity at the four intra-day 

nomination opportunities. In addition, we note that some pipelines are providing 

additional nomination opportunities (such as hourly nominations) under certain rate 

schedules. The regulation requires posting “whenever capacity is scheduled,” which 

would include posting for these additional nomination opportunities as well as posting for 

the standard four nomination periods. 

B. Proposed Implementation Procedures

24. The Commission proposes that natural gas pipelines be required to implement the 

NAESB WGQ Version 2.0 Standards in accordance with the following schedule. We 

propose to require compliance with the NAESB WGQ Version 2.0 Standards beginning 

on the first day of the month after the fourth full month following issuance of the final 

rule. So if the final rule were issued on February 17, 2012, compliance would be 

required beginning on July 1, 2012. Based on past practice, we are proposing this 

implementation schedule to give the natural gas pipelines subject to these standards 

adequate time to implement these changes. In addition, the Commission proposes that 

pipelines be required to file tariff records to reflect the changed standards at least two 

months before the implementation date. 

25. The Commission also proposes to revise the compliance filing requirements to 

increase the transparency of the pipelines’ incorporation by reference of the NAESB 
Docket No. RM96-1-037 - 16 - 

WGQ Standards so that shippers and the Commission will know which tariff provisions 

implements each standard as well as the status of each standard. 

(1) The pipelines should designate a single tariff section under which every 

NAESB standard is listed.19

(2) For each standard, the pipeline would indicate in the tariff section listing all 

the NAESB standards: 

(a) whether the standard is incorporated by reference; 

(b) for those standards not incorporated by reference, the tariff provision 

that complies with the standard;20 and 

(c) an indication as to whether the pipeline has been granted a waiver, 

extension of time, or other variance with respect to compliance with the 

standard.21 

(3) 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 indicates the 

 19 This section should be a separate tariff record under the Commission’s 

electronic tariff filing requirement and be filed electronically using the eTariff portal 

using the Type of Filing Code 580. 

20 For example, pipelines are required to include the full text of the NAESB 

nomination timeline standards (WGQ Standards 1.3.2(i-v) and 5.3.2) in their tariffs. 

Standards for Business Practices for Interstate Natural Gas Pipelines, Final Rule, Order 

No. 587-U, FERC Stats. & Regs. ¶ 31,307, at P 39 & n.42 (2010). The pipeline would 

indicate which tariff provision complies with each of these standards. 

21 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. 
Docket No. RM96-1-037 - 17 - 

standard for which a waiver or extension of time was granted, and the docket 

number or order citation to the proceeding in which the waiver or extension was 

granted. 

This approach would give Commission staff and all shippers a common location that 

identifies the way the pipeline is incorporating all the NAESB WGQ Standards and the 

standards with which it is required to comply. The Commission will post on its eLibrary 

website (under Docket No. RM96-1-037) a sample tariff format, to provide filers an 

illustrative example to aid them in preparing their compliance filings.22

C. Waivers and Extensions of Time

26. In previous compliance proceedings, there has been a marked increase in the 

number of requests for waivers or for extensions of time to comply with standards. The 

Commission’s orders on these requests have developed a set of general principles which 

the Commission intends to follow in reviewing such requests in the future.23 The 

following will help to clarify Commission policy regarding requests for waivers and 

extensions of time as well as the information that must be included with all such requests. 

(1) All waivers and extensions of time are limited to the individual set of 

NAESB standards being adopted (in this case NAESB WGQ’s Version 2.0 

 22 http://www.ferc.gov/docs-filing/elibrary.asp. 

23 See Standards for Business Practices for Interstate Natural Gas Pipelines,

compliance order, 133 FERC ¶ 61,096, at P 4 (October 28 Order), further compliance 

order, 133 FERC ¶ 61,185, at P 4 (2010) (November 30 Order); B-R Pipeline Co., 

128 FERC ¶ 61,126 (2009) (B-R Pipeline). 
Docket No. RM96-1-037 - 18 - 

Standards). Pipelines will need to seek renewal of any such waivers or extensions 

for each version of the standards the Commission adopts.24

(2) Waivers or extensions of time will not be granted for standards that merely 

describe the process by which a pipeline must perform a business function, if it 

performs that function, where the standard does not require the pipeline to perform 

the business function.25 In such a case, as long as the pipeline does not perform 

the business function, it is not required to follow the standard and hence requires 

no waiver or extension of time. If, however, the pipeline revises its tariff to 

perform the business function, the standard(s) will already be in the tariff and the 

pipeline will be required to comply with the standard(s).26

(3) If a pipeline is seeking a renewal of a waiver or extension of time request, it 

must provide a current justification for the request and must include a citation to 

 24 In B-R Pipeline, 128 FERC ¶ 61,126 at P 6, the Commission stated that “each 

time the Commission adopts new versions of [the] standards ... pipelines must request 

waiver [or extension of time] of the new standards.” 

25 October 28 Order, 133 FERC ¶ 61,096 at P 9; November 30 Order, 133 FERC 

¶ 61,185 at P 7. 

26 As an example, Standard 4.3.96 requires pipelines to provide hourly gas quality 

information “to the extent that the TSP is required to do so in its tariff or general terms 

and conditions, a settlement agreement, or by order of an applicable regulatory 

authority.” A pipeline that does not provide hourly gas quality information, therefore, 

does not require a waiver or extension of time for compliance with this standard, because 

the standard imposes no obligation on the pipeline to comply with the standard until it 

provides hourly gas quality information. See October 28 Order, 133 FERC ¶ 61,096 at 

P 9. 
Docket No. RM96-1-037 - 19 - 

an order or the docket number of the proceeding in which the initial waiver or 

extension of time was granted.27

(4) In cases in which pipelines maintain they should not be required to incur 

the costs of implementing standards shippers are not interested in utilizing, 

waivers ordinarily will not be granted. Instead, the approach to these requests will 

be to grant the pipeline an extension of time for compliance until 60 days after the 

pipeline receives a request to comply with the standard.28 Waivers are justified 

only when the pipeline can demonstrate that there is good cause not to require the 

implementation of a standard even though shippers want to use the standard. 

(5) The Commission generally will not entertain waiver or extension of time 

requests for NAESB WGQ Definitions (x.2.z Standards). The NAESB WGQ 

Definitions specify and elucidate specific terms of generally applicable business 

practices and do not require a pipeline to perform any action or incur expense to 

comply which such Definitions. 

27. To provide guidance to pipelines in filing requests for waivers or extensions of 

time, the Commission also will explain its general policy regarding waivers of the four 

general categories of NAESB standards: (1) business practice standards; 

(2) requirements to conduct business electronically using the Internet (Internet Business 

Standards); (3) Commission Internet posting requirements (Internet Posting Standards); 

 27 See Order No. 587-U, FERC Stats. & Regs. ¶ 31,307 at P 38-39. 

28 See T.W. Phillips Pipeline Corp., 137 FERC ¶ 61,104, at P 11 (2011). 
Docket No. RM96-1-037 - 20 - 

and (4) requirements to conduct computer-to-computer transactions using EDI. It is 

important for pipelines to identify clearly in their filings the specific standards from 

which they are seeking waivers or extensions of time. In particular, pipelines need to be 

clear as to whether they are requesting waivers of the Internet Requirements or the EDI 

requirements. 

(1) Waivers or Extensions of Time to Comply with Business Practice 

Standards. Waivers or extensions of time to comply with business practice 

standards will generally be denied because these standards establish the basic 

principles on which business is required to be conducted. Nonetheless, if a 

pipeline believes such a waiver or extension of time to comply is justified, it must 

detail specific reasons why it seeks the waiver or extension of time to comply with 

the standard and address alternative methods by which it could comply with the 

principle of the standard.29

(2) Waivers or Extensions of Time to Comply with the Internet Business 

Standards. Waivers or extensions of time to comply with the requirement to 

conduct business over the Internet generally will be granted based on a pipeline’s 

individual circumstances, such as the size of the pipeline, the number of shippers, 

its ability to provide electronic services, the demand for such services, and 

 29 See Carolina Gas Transmission Corp., 131 FERC ¶ 61,211, at P 4 (2010); 

MoGas Pipeline LLC, 131 FERC ¶ 61,251, at P 7 (2010); Granite State Gas 

Transmission, Inc., 132 FERC ¶ 61,262, at P 8 (2010) (requiring small pipelines to use 

manual methods of implementing index-based capacity releases). 
Docket No. RM96-1-037 - 21 - 

alternative means by which the pipeline conducts the business practice. For 

smaller pipelines, the Commission has granted waivers of the Internet Business 

Standards when such pipelines have shown that complying with such standards 

would prove unduly burdensome.30 For larger pipelines, the Commission has 

rarely granted waivers or extensions of time to comply with the Internet Business 

Standards.31 However, if a pipeline can demonstrate that shippers are not utilizing 

a standard, then the Commission will grant an extension of time to comply. Such 

an extension of time ensures that pipelines do not needlessly have to spend money 

revamping computer services that shippers do not use while, at the same time, 

ensuring that shippers have access to such services if they need them. 

(3) Waivers or Extensions of Time to Comply with Internet Posting Standards. 

The Commission rarely grants waivers or extensions of time to comply with the 

posting requirements because posting of this information is required by the 

Commission’s regulations. The cost of maintaining and posting information on an 

Internet website is not great even for smaller pipelines. 

(4) Waivers or Extensions of Time to Comply with EDI standards. The 

Commission generally will grant waivers or extensions of time to comply with the 

EDI requirements based on a pipeline’s individual circumstances, such as the size 

 30 October 28 Order, 133 FERC ¶ 61,096 at P 17-18; November 30 Order, 

133 FERC ¶ 61,185 at P 9. 

31 October 28 Order, 133 FERC ¶ 61,096 at P 17-18. 
Docket No. RM96-1-037 - 22 - 

of the pipeline, the number of shippers, its ability to provide electronic services, 

the demand for such services, and alternative means by which the pipeline 

conducts the business practice. For smaller pipelines, the Commission generally 

grants waivers of the EDI Standards when such pipelines have shown that 

complying with such standards would prove unduly burdensome.32 For larger 

pipelines on which shippers are not utilizing a standard, in lieu of an outright 

waiver, the Commission generally will grant an extension of time until such time 

as a request is made to use EDI.33 As with the EDI requirements relating to 

capacity releases,34 NAESB also can review whether certain business transactions 

still need to be available through EDI, given the lack of usage, and pipelines can 

also seek such revisions from NAESB for EDI standards whose upkeep no longer 

appears to be cost justified. 

IV. Notice of Use of Voluntary Consensus Standards

28. 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, the 

 32 See supra n.29. 

33 See supra n.30; Texas Eastern Transmission LP., 100 FERC ¶ 61,364 (2002) 

(granting an extension of time for unused EDI datasets, but requiring compliance with 

datasets for publicly available capacity release information). 

34 See supra P 10. 
Docket No. RM96-1-037 - 23 - 

Commission is proposing to incorporate by reference voluntary consensus standards 

developed by the WGQ. 

V. Information Collection Statement 

29. The following collections of information contained in this proposed rule are being 

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 following burden estimates include the costs to implement 

the WGQ’s definitions and business practice standards for interstate natural gas pipelines 

and electronic communication protocols. The burden estimates are primarily related to 

start-up to implement these standards and regulations and will not result in ongoing costs. 
Docket No. RM96-1-037 - 24 - 

Data Collection No. of 

Respondents 

No. of Responses 

Per Respondent 

Hours Per 

Response 

Total No. of 

Hours 

FERC-54535 161 1 10 1,610

FERC-549C36 161 1 22 3,542

Totals 5,152

Total Annual Hours for Collections 

(Reporting and Recordkeeping, if appropriate) = 5,152 

Information Collection Costs: The Commission seeks comments on the costs to comply 

with these requirements. It has projected the average annualized cost for all respondents 

to be the following:37

FERC-545 FERC-549C 

Annualized Capital/Startup Costs $94,990 $208,987 

Annualized Costs (Operations & 

Maintenance) 

N/A N/A 

Total Annualized Costs $94,990 $208,987 

Total Cost for all Respondents = $303,968 

 35 Data collection FERC-545 covers rate change filings made by natural gas 

pipelines, including tariff changes (OMB Control No. 1902-0154). 

36 Data collection FERC-549C covers Standards for Business Practices of 

Interstate Natural Gas Pipelines (OMB Control No. 1902-0174). 

37 The total annualized cost for the two information collections is $303,968. This 

number is reached by multiplying the total hours to prepare a response (hours) by an 

hourly wage estimate of $59 (a composite estimate that includes legal, technical and 

support staff wages and benefits obtained from the Bureau of Labor Statistic data at 

http://bls.gov/oes/current/naics3_221000.htm and 

http://www.bls.gov/news.release/ecec.nr0.htm rates). $303,968 = $59 x 5,152. 
Docket No. RM96-1-037 - 25 - 

30. OMB regulations38 require OMB to approve certain information collection 

requirements imposed by agency rule. The Commission is submitting notification of this 

proposed rule to OMB. These information collections are mandatory requirements. 

Title: FERC-545, Gas Pipeline Rates: Rates Change (Non-Formal); 

 FERC-549C, Standards for Business Practices of Interstate Natural Gas Pipelines 

Action: Proposed collections 

OMB Control Nos.: 1902-0154, 1902-0174 

 

Respondents: Business or other for profit, (i.e., Natural Gas Pipelines, applicable to only 

a few small businesses.) Although the intraday reporting requirements will affect electric 

plant operators, the Commission is not imposing the reporting burden of adopting these 

standards on those entities. 

Frequency of Responses: One-time implementation (business procedures, capital/startup) 

Necessity of Information: The proposals in this NOPR would, if implemented, upgrade 

the Commission’s current business practices and communication standards by 

specifically: (1) adding and revising standards allowing the elimination of EDI 

requirements for Capacity Release Upload information; (2) creating and modifying 

existing information posting requirements for websites and browsers; (3) requiring 

pipelines to provide security information; (4) requiring the posting of information on 

waste heat recovery feasibility on the Internet; (5) modifying pipeline notice content and 

 38 5 CFR 1320.11. 
Docket No. RM96-1-037 - 26 - 

creating new pipeline notice types; and (6) creating standards to ensure NAESB data 

format is consistent with other data reporting via the Internet by using CSV. 

The implementation of these data requirements will provide additional transparency to 

informational posting web sites and will improve communication standards, including 

gas-electric communications. The implementation of these standards and regulations will 

promote the additional efficiency and reliability of the gas industries’ operations thereby 

helping the Commission to carry out its responsibilities under the Natural Gas Act of 

promoting the efficiency and reliability of the gas industries' operations. In addition, the 

Commission's Office of Enforcement will use the data for general industry oversight. 

Internal Review: The Commission has reviewed the requirements pertaining to business 

practices of natural gas pipelines and made a preliminary determination that the proposed 

revisions are necessary to establish more efficient coordination between the gas and 

electric industries. Requiring such information ensures both a common means of 

communication and common business practices to limit miscommunication for 

participants engaged in the sale of electric energy at wholesale and the transportation of 

natural gas. These requirements conform to the Commission's plan for efficient 

information collection, communication, and management within the natural gas pipeline 

industries. 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 

requirements. 

31. Interested persons may obtain information on the reporting requirements by 

contacting the following: Federal Energy Regulatory Commission, 888 First Street, NE, 
Docket No. RM96-1-037 - 27 - 

Washington, DC 20426 [Attention: Ellen Brown, Office of the Executive Director, 

e-mail: DataClearance@ferc.gov, phone: (202) 502-8663, fax: (202) 273-0873]. 

32. 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) 395-4638, fax: (202) 395-4718]. 

VI. Environmental Analysis

33. 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.39 The Commission has categorically excluded certain 

actions from these requirements as not having a significant effect on the human 

environment.40 The actions proposed here fall within categorical exclusions in the

Commission's regulations for rules that are clarifying, corrective, or procedural, fo

information gathering, analysis, and dissemination, and for sales, exchange, and 

transportation of natural gas that requires no construction of facilities.

r 

n 

 

41 Therefore, a

39 Order No. 486, Regulations Implementing the National Environmental Policy 

Act of 1969, FERC Stats. & Regs. ¶ 30,783 (1987). 

40 18 CFR 380.4. 

41 See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), 380.4(a)(27). 
Docket No. RM96-1-037 - 28 - 

environmental assessment is unnecessary and has not been prepared as part of this 

NOPR. 

VII. Regulatory Flexibility Act Certification

34. The Regulatory Flexibility Act of 1980 (RFA) generally requires a description 

and analysis of final rules that will have significant economic impact on a substantial 

number of small entities. The RFA mandates consideration of regulatory alternat

accomplish the stated objectives of a proposed rule and that minimize any significant 

economic impact on a substantial number of small entities. The Small Business 

Administration’s (SBA) Office of Size Standards develops the numerical definition of a 

42

ives that 

.

44 

ost 

 

small business.43 The SBA has established a size standard for pipelines transporting 

natural gas, stating that a firm is small if its annual receipts are less than $7 million

35. The regulations proposed here impose requirements only on interstate pipelines,

the majority of which are not small businesses. Most companies regulated by the

Commission do not fall within the RFA’s definition of a small entity. Approximately

161 entities would be potential respondents subject to data collection FERC-545 

reporting requirements and also be subject to data collection FERC 549-C reporting 

requirements. Nearly all of these entities are large entities. For the year 2010 (the m

recent year for which information is available), only seven companies not affiliated with 

42 5 U.S.C. 601-612. 

43 13 CFR 121.101. 

44 13 CFR 121.201, subsection 486. 
Docket No. RM96-1-037 - 29 - 

larger companies had annual revenues of less than $7 million, which is about three 

percent of the total universe of potential respondents. Moreover, these requirements

designed to benefit all customers, including small businesses. The Commission estimates 

that the one-time implementation cost of these standards is $303,968, or $1,888 pe

company.

 are 

r 

entation and the fact that industry conducts business under these standards, the 

§ 605(b) of the RFA, the regulations proposed herein 

s. 

45 The Commission does not consider the estimated $1,888 impact per entity to 

be significant. 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 repres

Commission’s regulations should reflect those standards that have the widest possible 

support. 

36. Accordingly, pursuant to

should not have a significant economic impact on a substantial number of small entitie

VIII. Comment Procedures

37. The Commission invites interested persons to submit written comments on the 

NAESB business practice standards proposed for incorporation by reference in this 

NOPR, as well as any related matters or alternative proposals that commenters may wish

to discuss. Comments are due [insert date 30 days from publication in the FEDERA

REGISTER]. Comments must refer to Docket No. RM96-1

L 

-037, and must include the 

 45 This number is derived by dividing the total cost figure by the number of 

respondents. $303,968/161 = $1,888. 
Docket No. RM96-1-037 - 30 - 

commenter’s name, the organization they represent, if applicable, and their address. 

Comments may be filed either in electronic or paper format. 

38. The Commission encourages comments to be filed electronically via the eFiling 

link on the Commission's web site at http://www.ferc.gov. The Commission accepts 

most standard word processing formats. Documents created electronically using wo

process

rd 

ing software should be filed in native applications or print-to-PDF format and not 

nically must send an 

 remotely as described in the Document Availability section 

posal are not required to serve copies of their comments 

in a scanned format. Commenters filing electronically do not need to make a paper

filing. 

39. Commenters that are not able to file comments electro

original of their comments to: Federal Energy Regulatory Commission, Secretary of the 

Commission, 888 First Street NE, Washington, DC 20426. 

40. All comments will be placed in the Commission's public files and may be viewed, 

printed, or downloaded

below. Commenters on this pro

on other commenters. 

IX. Document Availability

41. In addition to publishing the full text of this document in the Federal Regis

Commission provides all interested persons an opportunity to view and/or print the 

contents of this document via the Internet through the Commission's Home Page 

( ) and

ter, the 

http://www.ferc.gov in the Commission's Public Reference Room during normal 

business hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street, NE, Room 2A, 

Washington DC 20426. 
Docket No. RM96-1-037 - 31 - 

42. From the Commission's Home Page on the Internet, this information is avai

on eLibrary. The full text of this document is available on eLibrary in PDF and 

Microsoft Word format for viewing, pr

lable 

inting, and/or downloading. To access this 

at ferconlinesupport@ferc.gov, or the Public Reference 

 502-8659. E-mail the Public Reference Room at 

CFR part 284

document in eLibrary, type the docket number excluding the last three digits of this 

document in the docket number field. 

43. User assistance is available for eLibrary and the Commission’s website during 

normal business hours from the Commission’s Online Support at (202) 502-6652 (toll 

free at 1-866-208-3676) or email 

Room at (202) 502-8371, TTY (202)

public.referenceroom@ferc.gov. 

List of subjects in 18 

n by reference, Natural gas, Reporting and record keeping requirements. 

y the Commission. 

S E A L ) 

Nathaniel J. Davis, Sr., 

Deputy Secretary. 

Incorporatio

B

( 
Docket No. RM96-1-037 - 32 - 

In consideration of the foregoing, the Commission proposes 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 

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. 7101-7352; 43 U.S.C. 

1331-1356. 

2. Section 284.12 is amended by revising paragraph (a) (1) to read as follows: 

Section 284.12 Standards for pipeline business operations and communications. 

 (a) * * * 

 (1) * * * 

 (i) Additional Standards (General Standards, Creditworthiness 

Standards, Gas/Electric Operational Communications Standards and Operating Capacity 

and Unsubscribed Standards) (Version 2.0, November 30, 2010) with the exception of 

Standards 0.3.19 and 0.3.21; 

 (ii) Nominations Related Standards (Version 2.0, November 30, 2010, Minor 

Corrections Applied Through December 2, 2011); 

 (iii) Flowing Gas Related Standards (Version 2.0, November 30, 2010, Minor 

Corrections Applied through June 3, 2011); 

 (iv) Invoicing Related Standards (Version 2.0, November 30, 2010, Minor 

Corrections Applied Through June 3, 2011); 

 (v) Quadrant Electronic Delivery Mechanism Related Standards 
Docket No. RM96-1-037 - 33 - 

(Version 2.0, November 30, 2010, Minor Corrections Applied Through December 2, 

2011) with the exception of Standard 4.3.4; 

 (vi) Capacity Release Related Standards (Version 2.0, November 30, 2010, Minor 

Corrections Applied Through January 5, 2012); and 

 (vii) Internet Electronic Transport Related Standards (Version 2.0, November 30, 

2010, Minor Corrections Applied January 2, 2011) with the exception of Standard 10.3.2. 

* * * * *