165 FERC ¶ 61,109

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

18 CFR Part 284

[Docket No. RM96-1-041; Order No. 587-Y]

Standards for Business Practices of Interstate Natural Gas Pipelines

(Issued November 15, 2018)

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final Rule.

SUMMARY: The Federal Energy Regulatory Commission is amending its regulations 

to incorporate by reference, with certain enumerated exceptions, the latest version 

(Version 3.1) 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 3.0) of those business 

practice standards. The revisions made by NAESB in this version of the standards are 

designed to clarify the processing of certain business transactions.

EFFECTIVE DATE: This rule will become effective [Insert_Date 60 DAYS FROM 

THE LATER OF THE DATE CONGRESS RECEIVES THE AGENCY NOTICE 

OR THE DATE THE RULE IS PUBLISHED IN THE FEDERAL REGISTER].

Compliance filings required by this rule are due on April 1, 2019 and compliance with 

the standards incorporated in this rule is required on and after August 1, 2019.
Docket No. RM96-1-041 ii

FOR FURTHER INFORMATION CONTACT:

Stanley Wolf (technical issues)

Office of Energy Policy and Innovation

Federal Energy Regulatory Commission

888 First Street, NE

Washington, DC 20426

(202) 502-6841

stanley.wolf@ferc.gov

Oscar F. Santillana (technical issues)

Office of Energy Market Regulation

Federal Energy Regulatory Commission

888 First Street, NE

Washington, DC 20426

(202) 502-6392

oscar.santillana@ferc.gov

Gary D. Cohen (legal issues)

Office of the General Counsel

Federal Energy Regulatory Commission

888 First Street, NE

Washington, DC 20426

(202) 502-8321

gary.cohen@ferc.gov

SUPPLEMENTARY INFORMATION:
165 FERC ¶ 61,109

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Neil Chatterjee, Chairman;

 Cheryl A. LaFleur and Richard Glick.

Standards for Business Practices of Interstate Natural 

 Gas Pipelines

Docket No. RM96-1-041

ORDER NO. 587-Y

FINAL RULE

(Issued November 15, 2018)

TABLE OF CONTENTS

Paragraph Numbers

I. Background ..................................................................................................................... 7.

II. Discussion.................................................................................................................... 11.

A. The NAESB WGQ Version 3.1 Business Practice Standards................................ 11.

B. NAESB’s Process.................................................................................................... 20.

C. Adoption of Version 3.1 of the Standards............................................................... 21.

D. Required Compliance Filings.................................................................................. 23.

III. Implementation Schedule ........................................................................................... 24.

IV. Notice of Use of Voluntary Consensus Standards..................................................... 26.

V. Incorporation by Reference ......................................................................................... 27.

VI. Information Collection Statement .............................................................................. 38.

VII. Environmental Analysis............................................................................................ 43.

VIII. Regulatory Flexibility Act....................................................................................... 44.

IX. Document Availability ............................................................................................... 47.

X. Effective Date and Congressional Notification........................................................... 50.
Docket No. RM96-1-041 - 2 -

1. In this Final Rule, the Federal Energy Regulatory Commission (Commission) 

amends its regulations at 18 CFR 284.12 to incorporate by reference, with certain 

enumerated exceptions, the latest version (Version 3.1) of business practice standards 

applicable to interstate natural gas pipelines adopted by the Wholesale Gas Quadrant 

(WGQ) of the North American Energy Standards Board (NAESB) in place of the 

currently incorporated version (Version 3.0) of those business practice standards. Under 

this Final Rule, interstate natural gas pipelines are required to file compliance filings with 

the Commission by April 1, 2019 and are required to comply with the standards 

incorporated by reference in this rule on and after August 1, 2019.

2. The implementation of these standards and regulations will promote 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).

1

 

3. The NAESB WGQ Version 3.1 package of standards contains a number of 

revisions to the NAESB Version 3.0 package of standards. As explained further below, 

NAESB adopted two substantive revisions to its Nominations Related Standards, one to 

establish a standard rounding process for elapsed-prorated-scheduled quantity 

calculations and a second to revise the specifications for the information to be included in 

a nomination request.

4. NAESB also adopted three minor revisions to the WGQ Electronic Delivery 

Mechanism (EDM) Related Standards. First, it has increased the allowable field length 

 1 15 U.S.C. 717 (2012).
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in ASCII Comma Separated Value Files to 3000 characters. Second, NAESB adopted 

new Standard 4.3.106 to allow checkboxes and radio buttons in the Transmission Service 

Providers’ (TSP) Electronic Bulletin Boards (EBB). Third, NAESB modified its 

standards to update the operating systems and web browsers that entities should support 

on behalf of users. Additionally, clarifying language was added to the Secure Sockets 

Layer (SSL)/Transport Layer Security (TLS) protocols.

5. Other changes adopted by NAESB included changes to the NAESB WGQ data 

sets and other technical implementation documentation as well as revisions to the 

Flowing Gas Related data sets and technical implementation. In addition, NAESB 

revised the Imbalance Trade data set and revised two Sender’s Option data elements. 

NAESB also adopted revisions to the Capacity Release Related data sets and technical 

implementation and revised Standard 6.3.1 (i.e., the NAESB Base Contract for Sale and 

Purchase of Natural Gas) to add language directing users to NAESB’s copyright 

disclaimer posted on the NAESB website. Identical language was added to three 

additional NAESB WGQ Contracts.

6. Lastly, NAESB adopted modifications to add a self-identification provision that 

assists end users in determining whether counterparties are commercial market 

participants as defined by the United States Commodity Futures Trading Commission.

I. Background

7. 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. RM96-1-041 - 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 and will replace the earlier version of these standards that the Commission 

previously incorporated by reference in 2015.

3

8. On September 29, 2017, NAESB filed a report informing the Commission that 

it had adopted and ratified WGQ Version 3.1 of its business practice standards applicable 

to natural gas pipelines. The NAESB report identifies all the changes made to the 

Version 3.0 Standards and summarizes the deliberations that led to the changes. It also 

identifies changes to the existing standards that were considered but not adopted due to a 

lack of consensus or other reasons.

9. On August 21, 2018, the Commission issued a Notice of Proposed Rulemaking 

proposing to amend its regulations to incorporate by reference, with certain enumerated 

 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) (cross-referenced at 76 FERC ¶ 61,042).

3 Standards for Business Practices of Interstate Natural Gas Pipelines, Order 

No. 587-W, FERC Stats. & Regs. ¶ 31,373 (2015) (Order No. 587-W) (cross-referenced 

at 153 FERC ¶ 61,061).
Docket No. RM96-1-041 - 5 -

exceptions, the NAESB WGQ Version 3.1 business practice standards (referenced above) 

applicable to natural gas pipelines.4

10. In response to the Version 3.1 NOPR, Tennessee Valley Authority (TVA) and the 

Interstate Natural Gas Association of America (INGAA) filed comments. TVA expresses

support for the Commission’s proposal to incorporate by reference NAESB’s WGQ 

Version 3.1 business practice standards. INGAA also supports the Commission’s 

proposal in the Version 3.1 NOPR, but urges the Commission to ensure that 

implementation of a Final Rule in this proceeding does not occur prior to April 1, 2019, 

after the winter heating season. INGAA states that implementation of a Final Rule in

this proceeding will require substantial time and effort from both pipelines and their 

customers to alter business systems, scheduling, and coordination processes and, thus, it 

would be best to schedule implementation to not occur during the winter heating season.

II. Discussion

A. The NAESB WGQ Version 3.1 Business Practice Standards

11. The NAESB WGQ Version 3.1 Business Practice Standards made a number of 

modifications to the earlier version of those standards that the Commission previously 

incorporated by reference in 2015 in Order No. 587-W.

5 Notable among these 

 4 Standards for Business Practices of Interstate Natural Gas Pipelines, Notice of 

Proposed Rulemaking, 83 FR 44521 (Aug. 31, 2018), FERC Stats. & Regs. ¶ 32,728

(2018) (Version 3.1 NOPR).

5 Order No. 587-W, FERC Stats. & Regs. ¶ 31,373.
Docket No. RM96-1-041 - 6 -

modifications6 were two substantive revisions concerning the Nominations Related 

Standards, which govern shipper requests to schedule service on natural gas pipelines. 

One revision adds a new provision, Standard 1.3.82, to establish a standard rounding 

process (requiring calculations to at least the seventh decimal place) for elapsed-proratedscheduled quantity7 calculations to provide for needed numerical uniformity and 

granularity for users of these NAESB procedures. The other Nominations Related 

Standards revision was to revise the “Service Requester” element of Standard 1.3.27,8

which specifies some of the information that should be included in a nomination request, 

from a Mandatory designation to a Business Conditional9 designation. Thus, instead of 

forcing a specific upstream or downstream (unthreaded) nomination10 to be tied to a 

 6 An abbreviated description of these modifications is provided at PP 3-6 above.

7 Standard 1.2.12 of the Nominations Related Standards defines the elapsedprorated-scheduled quantity to mean:

That portion of the scheduled quantity that would have theoretically flowed up to 

the effective time of the intraday nomination being confirmed, based upon a 

cumulative uniform hourly quantity for each nomination period affected.

8 NAESB also made conforming revisions to the related data sets and documents: 

Standard 1.4.1 of the Nomination data set, Standard 1.4.5 of the Scheduled Quantity data 

set, Standard 2.4.4 of the Shipper Imbalance data set, Standard 1.4.2 of the Nomination 

Quick Response data set, Standard 2.4.1 of the Pre-Determined Allocation document, and 

Standard 2.4.3 of the Allocation document.

9 Standard 1.2.2 of the Nominations Related Standards provides that a Business 

Conditional data element is one that is based on current variations in business practice.

10 NAESB’s Nomination Data Dictionary, WGQ Version 3.1, Standard 1.4.1, 

retains from the Version 3.0 standard the field for “Model Type Data” that identifies 

which of three types of nomination structures is being used. These are: Pathed, 

Non-Pathed, and Pathed Non-Threaded. Having these three types of model type data 
Docket No. RM96-1-041 - 7 -

specific contract (using a specific threaded nomination), upstream nominations may now 

be distributed among several contracts (using a Pathed Non-Threaded nomination 

structure), which generally increases flexibility to customers.

12. NAESB also adopted three minor revisions to the WGQ EDM Related Standards, 

which establish the framework for the electronic dissemination and communication of 

information between parties in the North American Wholesale Gas marketplace. First, 

NAESB revised Standard 4.3.80 to increase the allowable field length in ASCII Comma 

Separated Value Files to 3000 characters. The revision increases the amount of 

 

allows specificity as to the details of the nomination. A pathed nomination uses one 

nomination line item to transact business and, therefore, has one transaction type. A nonpathed nomination uses two nomination line items to transact business and, therefore, has 

two transaction types. A pathed non-threaded nomination uses three nomination line 

items to transact business and, therefore, has three transaction types.

NAESB also provides the following clarification of these concepts in the 

description of the technical implementation of business processes included as part of 

Standard 1.4.1, where NAESB explains that:

[a] “Pathed” nomination is actually a “Pathed Threaded” nomination 

because (1) the physical path of the pipeline locations and service 

contract(s) is fully described in the nomination, and (2) the logical thread of 

a specific supplier entity to a specific market entity at specific pipeline 

locations for a specific quantity is also fully described. “Non-Pathed” 

nominations are actually “Non-Pathed Non-Threaded” nominations because 

(1) physical “location-to-location” paths are not described in the 

nominations, and (2) no ties of specific supply entities to specific market 

entities are established. And for “Pathed Non-Threaded” nominations, 

(1) the physical path of the pipeline locations, service contract(s), and 

quantity is fully described, and (2) no ties of specific supply entities to 

specific market entities are established. See NAESB WGQ Version 3.1 

Business Practice Standards, Nominations Related Standards, Standard 

1.4.1, at 87 (Sep. 29, 2017).
Docket No. RM96-1-041 - 8 -

information that can be conveyed, but reasonably limits it in conformity with commonly 

used software such as Excel. Second, NAESB adopted new Standard 4.3.106 to allow 

checkboxes and radio buttons in the TSPs’ EBBs to indicate “Yes” and/or “No” 

responses to data elements, which NAESB states is more convenient than the current 

drop down list. Third, NAESB revised its standards to update the operating systems and 

web browsers that entities should support to allow users to take advantage of recent 

developments in computer technology and use. Additionally, language was added to 

clarify the SSL/TLS protocols, which encrypt data to hide information from electronic 

observers on the internet. The revised standard provides guidance on the timing for 

adoption of a new version of SSL/TLS protocols – new versions of these protocols should 

be used within 9 months of the version becoming generally available. In addition, the 

revised standard clarifies that SSL is a colloquial term that encompasses both SSL and 

TLS.

13. Other changes adopted by NAESB included changes to the NAESB WGQ data 

sets and other technical implementation documentation, which provide the technical

support necessary to use the NAESB standards effectively. One such change was to add 

a new Business Conditional data element “Agent” and corresponding technical 

implementation to the Nominations related Standard 1.4.1 and the Scheduled Quantity 

Standard 1.4.5. Currently, in the data sets, the Service Requester is defined as the 

Shipper or its Agent; however, language included in the implementation guides states that 

both the Shipper and Agent will be identified. Thus, this change adds a data element 
Docket No. RM96-1-041 - 9 -

“Agent” to the data sets to allow the Service Requestor to identify both the shipper and its 

agent if it uses an agent to nominate and schedule on the pipeline.

14. NAESB also adopted revisions to the Flowing Gas Related data sets and technical 

implementation, which address quantitative issues relating generally to allocation, 

imbalances, and measurement of flowing gas. Specifically, NAESB added three 

Business Conditional data elements to the Authorization to Post Imbalances data set 

(Standard 2.4.9). The addition of the three data elements will allow a Service Requester 

to authorize specific contracts and quantities of imbalances for specified periods of time 

to be posted.

15. In addition, NAESB revised the Imbalance Trade data set (Standard 2.4.11) to 

reinstate language providing the confirming party the ability to reject a trade in the 

Imbalance Trade data set when an auto-confirm agreement with a confirming party is in 

place. NAESB states that in its WGQ Version 2.1 publication, before the Imbalance 

Trading data sets were consolidated, the Imbalance Trade Confirmation contained a 

Yes/No indicator that the confirming party could use to indicate its acceptance or 

rejection of the trade. This indicator informed a pipeline whether the confirming party 

agreed to the terms of the trade that the initiating trader had posted. When the data sets 

were consolidated, this data element was dropped because it was assumed that if a 

confirming party did not agree with the posted terms it would not confirm the trade, 

which was effective only if the pipeline did not have an auto-confirm agreement with that 

confirming party. Accordingly, to address situations where there are auto-confirm 

agreements, NAESB has now revised Standard 2.4.11 to add a new Business Conditional 
Docket No. RM96-1-041 - 10 -

data element “Imbalance Trade Response” with an “Accept/Reject” code value. This 

Accept/Reject indicator informs the pipeline whether the confirming party agrees to the 

terms of the trade that the initiating trader had posted.

16. NAESB also revised Standard 2.4.6 to add two Sender’s Option data elements,11

“Comments” and “Volume-Uncorrected” to the Measured Volume Audit Statement12 in 

order to communicate raw data on volumes in addition to the final volumes, which are 

communicated through the existing data element “Volume Corrected.” Thus, users will 

now be able to indicate what initial data they received in addition to how that data was 

ultimately corrected, and to provide comments concerning that data, which relate to what 

meter was used to measure the data.

17. NAESB also adopted revisions to the Capacity Release Related data sets and 

technical implementation. Specifically, NAESB revised Standard 5.4.24 to add a new 

Business Conditional data element, “Waive Bidder Credit Indicator” and corresponding 

code values to the Offer data set. The additional data element indicates to a Bidder 

whether the Releasing Shipper will waive, pursuant to the TSP’s tariff, the Bidder’s 

creditworthiness pre-qualification.

 11 Nominations Related Standard 1.2.2 provides that Sender’s Option means that 

this element is an option for the sender to send and, if sent, the receiver should store and 

use the contents of the data element.

12 NAESB’s business process and practices overview of the Flowing Gas Related 

Standards states that the Measured Volume Audit Statement data set is used to report gas 

measurement information in support of the allocation, imbalance, invoice and audit 

processes.
Docket No. RM96-1-041 - 11 -

18. Further, NAESB revised Standard 6.3.1 (i.e., the NAESB Base Contract for Sale 

and Purchase of Natural Gas) to add language to the disclaimer to provide a copyright 

notification and direct the reader to the NAESB Copyright Policy and Companies with 

Access to NAESB Standards under the Copyright Policy posted on the NAESB website. 

Identical language was added to three additional NAESB WGQ Contracts.

19. Lastly, NAESB adopted modifications to the cover page of Standard 6.3.1 to add a 

self-identification provision that assists end users in determining whether counterparties 

are commercial market participants as defined by the United States Commodity Futures 

Trading Commission.

B. NAESB’s Process

20. NAESB used its consensus procedures to develop and approve the Version 3.1

Standards. As the Commission found in Order No. 587, the 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, since the 

industry itself must 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),13

Congress affirmatively requires federal agencies to use technical standards developed by 

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

 13 Pub. L. No. 104-113, § 12(d), 110 Stat. 775 (1996).
Docket No. RM96-1-041 - 12 -

objectives or activities determined by the agencies unless an agency determines that the 

use of such standards would be inconsistent with applicable law or otherwise impractical.

C. Adoption of Version 3.1 of the Standards

21. In the Version 3.1 NOPR, the Commission proposed to incorporate by reference, 

in its regulations, Version 3.1 of the NAESB WGQ consensus business practice 

standards, with the exception of NAESB’s standards specifying the terms of optional 

model contracts and the eTariff-related standards.14 As explained above, all of the 

commenters supported the Commission’s proposal to incorporate by reference the 

NAESB WGQ Version 3.1 business practice standards as proposed in the Version 3.1

NOPR.

15

22. After a review of the comments filed in response to the Version 3.1 NOPR, the 

Commission amends Part 284 of its regulations to incorporate by reference the NAESB 

WGQ Version 3.1 business practice standards, with the exceptions (as explained in the 

Version 3.1 NOPR) of the optional model contracts and the eTariff-related standards.

D. Required Compliance Filings

23. To implement the standards we are incorporating by reference in this Final Rule, 

we will require each interstate natural gas pipeline to file a separate tariff record 

reflecting the changed standards by April 1, 2019, to take effect on August 1, 2019, and 

 14 Version 3.1 NOPR, FERC Stats. & Regs. ¶ 32,728 at n.1 & P16.

15 INGAA’s suggestions for the implementation dates for the Final Rule are 

discussed separately in section III below.
Docket No. RM96-1-041 - 13 -

the natural gas pipelines will be required to comply with these standards on and after 

August 1, 2019.

16 

III. Implementation Schedule

24. As suggested by INGAA, we have selected an implementation schedule for 

compliance with this Final Rule that delays implementation until after the winter heating 

period. We also observe that none of the comments took issue with the Commission’s 

explanation of its policies on tariff filings and on waiver requests. Thus, we are not 

modifying these policies in this Final Rule and stand by the explanation of those policies 

we made in the Version 3.1 NOPR. The Commission will require interstate natural gas 

pipelines to comply with the revised NAESB standards that we are incorporating by 

reference in this Final Rule beginning on August 1, 2019. We are adopting this 

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

standards adequate time to implement these changes. In addition, the interstate natural 

gas pipelines must file tariff records to reflect the changed standards by April 1, 2019.

25. In addition, consistent with the requirements in Order No. 587-W,17 the 

Commission is including the following compliance filing requirements to increase the 

transparency of the pipelines’ incorporation by reference of the NAESB WGQ Standards 

 16 To aid in compliance, promptly after issuance of this Final Rule, the 

Commission will post a sample tariff record on the Commission’s website that may be 

accessed at http://www.ferc.gov/docs-filing/elibrary.asp. All interstate natural gas 

pipelines are to file their tariff records in conformance with this sample tariff record.

17 Order No. 587-W, FERC Stats. & Regs. ¶ 31,373 at P 42.
Docket No. RM96-1-041 - 14 -

so that shippers and the Commission will know which tariff provision(s) implements each 

standard as well as the status of each standard.

(1) The pipelines must designate a single tariff record under which every 

NAESB standard currently incorporated by reference by the Commission is listed.18 This 

section should be a separate tariff record under the Commission’s electronic tariff filing 

requirement and should be filed electronically using the eTariff portal using the Type of 

Filing Code 580. The Commission will post on its eLibrary website (under Docket 

No. RM96-1-041) a sample tariff record, to provide filers an illustrative example to aid 

them in preparing their compliance filings;19

(2) For each standard, each pipeline must specify in the tariff record a list of all 

the NAESB standards currently incorporated by reference by the Commission:

(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) a statement identifying any standards for which the pipeline 

has been granted a waiver, extension of time, or other variance with 

respect to compliance with the standard.21

 18 See supra n.14.

19 Id.

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

nomination and capacity release timeline standards (WGQ Standards 1.3.2(i-vi) and 

5.3.2) in their tariffs. See, e.g., Standards for Business Practices of Interstate Natural 

Gas Pipelines, Order No. 587-U, FERC Stats. & Regs. ¶ 31,307, at P 39 & n.42 (2010). 

Each pipeline’s submittal is to identify 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. RM96-1-041 - 15 -

(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 states the 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 of time was granted.

IV. Notice of Use of Voluntary Consensus Standards

26. Office of Management and Budget (OMB) 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 Final Rule, the 

Commission is amending its regulations to incorporate by reference voluntary consensus 

standards developed by NAESB’s WGQ. In section 12(d) of NTT&AA, Congress 

affirmatively requires federal agencies to use technical standards developed by voluntary 

consensus standards organizations to carry out policy objectives or activities determined 

by the agencies unless use of such standards would be inconsistent with applicable law or 

otherwise impractical.22

V. Incorporation by Reference

27. The Office of the Federal Register requires agencies incorporating material by 

reference in final rules to discuss, in the preamble of the final rule, the ways that the 

materials it incorporates by reference are reasonably available to interested parties and 

 22 Pub L. No. 104-113, 12(d), 110 Stat. 775 (1996), 15 U.S.C. 272 note (1997).
Docket No. RM96-1-041 - 16 -

how interested parties can obtain the materials.

23 The regulations also require agencies to 

summarize, in the preamble of the final rule, the material it incorporates by reference.

28. The NAESB standards being incorporated by reference in this Final Rule consist 

of seven suites of NAESB WGQ Business Practice Standards that touch on a variety of 

topics and are designed to streamline the transactional processes for the wholesale 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; Invoicing Related 

Business Practice Standards; Quadrant EDM Related Business Practice Standards; 

Capacity Release Related Business Practice Standards; and Internet Electronic Transport 

Related Business Practice Standards. These can be summarized as follows.

29. The WGQ Additional Business Practice Standards address six areas: 

Creditworthiness, Storage Information, Gas/Electric Operational Communications, 

Operational Capacity, Unsubscribed Capacity, and Location Data Download.

• The Creditworthiness related standards describe requirements for the exchange of 

information, notification, and communication between parties during the 

creditworthiness evaluation process.

• The Storage Information related standards define the information to be provided to 

natural gas service requesters related to storage activities and/or balances.

 23 1 CFR 51.5. See Incorporation by Reference, 79 FR 66267 (Nov. 7, 2014).
Docket No. RM96-1-041 - 17 -

• 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.

• 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.

• The Unsubscribed Capacity related standards define requirements of the 

transportation service provider related to reporting and requesting a transportation 

service provider’s available unsubscribed capacity.

• 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.

30. 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.
Docket No. RM96-1-041 - 18 -

31. 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.

32. The 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).

33. 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 (EDI)/EDM transfers, batch flat file/EDM transfers, 

informational postings web sites, EBB/EDM and interactive flat file/EDM.

34. 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.

35. 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.
Docket No. RM96-1-041 - 19 -

36. Our regulations provide that copies of the NAESB standards incorporated by 

reference may be obtained from NAESB, whose offices are located at 801 Travis Street, 

Suite 1675, Houston, TX 77002, Phone: (713) 356–0060. NAESB’s website can be 

accessed at https://www.naesb.org//. Copies of the NAESB standards may be inspected 

at the Federal Energy Regulatory Commission, Public Reference and Files Maintenance 

Branch, 888 First Street, NE, Washington, DC 20426, Phone: (202) 502–8371, 

http://www.ferc.gov.

24

37. NAESB is a private, consensus standards developer that develops voluntary 

wholesale and retail standards related to the energy industry. The procedures utilized by 

NAESB make its standards reasonably available to those affected by the Commission 

regulations.25 Participants can join NAESB, for an annual membership cost of $7,000, 

which entitles them to full participation in NAESB and enables them to obtain 

these standards at no additional cost.26 Non-members may obtain the Individual 

Standards Manual or Booklet for each of the seven manuals or booklets by email for 

 24 18 CFR 284.12.

25 As a private, consensus standards developer, NAESB needs the funds obtained 

from its membership fees and sales of its Individual Standards Manual or Booklet to 

finance the organization. The parties affected by these Commission regulations generally 

are highly sophisticated and have the means to acquire the information they need to 

effectively participate in Commission proceedings.

26NAESB Membership Application, https://www.naesb.org/pdf4/naesbapp.pdf.
Docket No. RM96-1-041 - 20 -

$250 per manual or booklet, which in the case of these standards would total $1,750.27 

Non-members also may obtain the complete set of Business Practice Standards 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.28 In addition, NAESB considers requests for 

waivers of the charges on a case-by-case basis based on need.

VI. Information Collection Statement

38. The collections of information for this Final Rule are being submitted to OMB for 

review under section 3507(d) of the Paperwork Reduction Act of 199529 and OMB’s 

implementing regulations.30 OMB must approve information collection requirements 

imposed by agency rules. The burden estimates for this Final Rule are for one-time 

implementation of the information collection requirements of this Final Rule (including 

tariff filing, documentation of the process and procedures, and IT work), and ongoing 

burden.

 27 NAESB Materials Order Form, https://www.naesb.org//pdf/ordrform.pdf.

28 Procedures for non-members to evaluate work products before purchasing are 

available at https://www.naesb.org/misc/NAESB_Nonmember_Evaluation.pdf. See 

Incorporation by Reference, 79 FR at 66271, n.51 & 53 (Nov. 7, 2014) (citing to 

NAESB’s procedure of providing “no-cost, no-print electronic access,” NAESB 

Comment, at 1, available at http://www.regulations.gov/#!documentDetail;D=OFR-2013-

0001-0023).

29 44 U.S.C. 3507(d).

30 5 CFR 1320.
Docket No. RM96-1-041 - 21 -

39. The Commission solicited comments from the public on the Commission's need 

for this information, whether the information will have practical utility, the accuracy of 

the burden estimates, recommendations 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. No comments were filed 

raising any objections to the burden estimate presented in the Version 3.1 NOPR. 

Accordingly, we will use that same burden estimate in this Final Rule. 

40. The collections of information related to this Final Rule fall under FERC–545B

(Gas Pipeline Rates: Rate Change (Non-Formal))31 and FERC–549C (Standards for 

Business Practices of Interstate Natural Gas Pipelines).32 The following estimates of 

reporting burden are related only to this Final Rule and include the costs to pipelines to 

comply with the Commission’s directives in this Final Rule. The burden estimates are 

primarily related to start-up to implement these standards and regulations and will not 

result in ongoing costs.

 31 FERC-545B covers rate change filings made by natural gas pipelines, including 

tariff changes.

32 FERC-549C covers Standards for Business Practices of Interstate Natural Gas 

Pipelines.
Docket No. RM96-1-041 - 22 -

RM96-1-041 Final Rule (Standards for Business Practices of Interstate Natural Gas Pipelines)

Number of 

Respondents

33

(1)

Annual 

Number of 

Responses 

per 

Respondent

(2)

Total 

Number of 

Responses 

(1)*(2)=

(3)

Average 

Burden 

Hr. Per 

Response

(4)

Total Annual 

Burden 

Hours & 

Total Annual 

Cost34

(3)*(4)=(5)

Annual 

Costs Per 

Respondent 

($)

(5) * (1) = (6)

FERC545B

(onetime)

165 1 165 10 hrs.;

$1,020

1,650 hrs.;

$168,000

$1,020

FERC549C 

(onetime)

165 1 165 22 hrs.;

$2,244

3,630 hrs.;

$370,260

$2,244

TOTAL 330 5,280 hrs.;

$538,560

 33 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.

34 The estimated hourly cost (salary plus benefits) provided in this section is 

based on the salary figures for May 2017 posted by the Bureau of Labor Statistics 

for the Utilities sector (Bureau of Labor Statics, May 2017 National Industry-Specific 

Occupational Employment and Wage Estimates (May 2017), 

http://www.bls.gov/oes/current/naics2_22.htm#13-0000) and scaled to reflect benefits 

using the relative importance of employer costs in employee compensation from 

May 2017 (Bureau of Labor Statics, May 2017 National Industry-Specific Occupational 

Employment and Wage Estimates (May 2017),

https://www.bls.gov/oes/current/naics2_22.htm). The hourly estimates for salary plus 

benefits are:

Computer and Information Systems Manager (Occupation Code: 11-3021), $96.51 

Electrical Engineer (Occupation Code: 17-2071), $66.90

Legal (Occupation Code: 23-0000), $143.68

The average hourly cost (salary plus benefits), weighting all of these skill sets evenly, is 

$102.36. The Commission rounds it to $102/hour.
Docket No. RM96-1-041 - 23 -

The one-time burden (for both the FERC-545B and FERC-549C) will be averaged over 

three years:

FERC-545B: 1,650 hours ÷ 3 = 550 hours/year over three years

FERC-549C: 3,630 hours ÷ 3 = 1,210 hours/year over three years

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

FERC-549C):

FERC-545B: 165 responses ÷ 3 = 55 responses/year

FERC-549C: 165 responses ÷ 3 = 55 responses/year

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

Year 1: 55 responses; 550 hours (FERC-545B); 1,210 hours (FERC-549C)

Year 2: 55 responses; 550 hours (FERC-545B); 1,210 hours (FERC-549C)

Year 3: 55 responses; 550 hours (FERC-545B); 1,210 hours (FERC-549C)

41. OMB regulations require OMB to approve certain information collection 

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

Final Rule to OMB. These information collections are mandatory requirements.

Title: FERC-545B,

35 Gas Pipeline Rates: Rates Change (Non-Formal);

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

Action: Proposed information collections.

 35 In the supporting statement for the NOPR, we submitted Gas Pipeline Rates: 

Rate Changes (Non-Formal) under the temporary information collection FERC-545B to 

ensure timely submission to OMB as another unrelated item was pending OMB review

under FERC-545 (and only one item per collection can be pending at OMB). FERC545B will also be used for the Final Rule in Docket No. RM96-1-041.
Docket No. RM96-1-041 - 24 -

OMB Control Nos.: TBD (FERC-545B), 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: The Commission has determined that the revisions the 

Commission makes in this Final Rule to its regulations specifically will upgrade the 

business practices and communication standards of natural gas pipelines by (1) updating 

the Nominations Related Standards to standardize a rounding process for the elapsedprorated-scheduled quantity calculation, and dictate that the “Service Requester Contract” 

data element signify business conditional nominations, rather than mandatory 

nominations, (2) updating the WGQ EDM Related Standards to make three minor 

revisions designed to add clarity, update the minimum technical characteristics to account 

for changes in technology since the previous version (Version 3.0) of the WGQ 

standards, and update the minimum and suggested operating systems and web browsers 

that entities should support, and (3) 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 posting web sites and will improve communication 

standards. The implementation of these standards and regulations will promote the 
Docket No. RM96-1-041 - 25 -

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

helping the Commission to carry out its responsibilities under the NGA. In addition, the 

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

Internal Review: The Commission has reviewed the business practice standards of 

natural gas pipelines adopted by NAESB and has determined that the revisions the 

Commission makes in this Final Rule to its regulations are necessary to provide 

additional transparency to informational posting web sites and promote the additional 

efficiency and reliability of the natural gas industry’s operations. These requirements 

conform to the Commission's plan for efficient information collection, communication, 

and management within the natural gas pipeline industry. The Commission has assured 

itself, by means of its internal review, that there is specific, objective support for the 

burden estimates associated with the information requirements. 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], e-mail: DataClearance@ferc.gov, 

phone: (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 OMB, 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].
Docket No. RM96-1-041 - 26 -

VII. Environmental Analysis

43. The Commission concludes that neither an Environmental Assessment nor an 

Environmental Impact Statement is required for this Final Rule under section 380.4(a) of 

the Commission’s regulations, which provides a categorical exemption for actions that 

are clarifying, corrective, or procedural, or that do not substantively change the effect of 

legislation or regulations being amended, for information gathering, analysis, and 

dissemination, or for the sale, exchange, or transportation of natural gas under sections 4, 

5, and 7 of the NGA that require no construction of facilities.36 Therefore, an 

environmental review is unnecessary and has not been prepared as part of this Final Rule.

VIII. Regulatory Flexibility Act

44. The Regulatory Flexibility Act of 1980 (RFA)37 generally requires a description 

and analysis of final 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.

45. As we stated in the WGQ Version 3.1 NOPR, approximately 165 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,38 which is currently defined for 

 36 See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), 380.4(a)(27).

37 5 U.S.C. 601-612.

38 See 5 U.S.C. 601(3) citing section 3 of the Small Business Act (SBA), 15 U.S.C. 
Docket No. RM96-1-041 - 27 -

natural gas pipelines as a company that, in combination with its affiliates, has total annual 

receipts of $27.5 million or less.39 For the year 2018, only eleven companies not 

affiliated with larger companies had annual revenues in combination with its affiliates of 

$27.5 million or less and therefore could be considered a small entity under the RFA. 

This represents about seven percent of the total universe of potential respondents that 

may have a significant burden imposed on them. The Commission estimates that the 

one-time implementation cost of the proposals in this Final Rule is $538,560 (or $3,264 

per entity, regardless of entity size).40 The Commission does not consider the estimated 

$3,264 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.

 

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.

39 13 CFR 121.201 (Subsector 486-Pipeline Transportation; North American 

Industry Classification System code 486210; Pipeline Transportation of Natural Gas) 

(2018). “Annual Receipts” are total income plus cost of goods sold.

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

respondents. $538,560/165 = $3,264.
Docket No. RM96-1-041 - 28 -

46. Accordingly, pursuant to § 605(b) of the RFA,41 the regulations being 

promulgated herein should not have a significant economic impact on a substantial 

number of small entities.

IX. Document Availability

47. In addition to publishing the full text of this document in the Federal Register, the 

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

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

(http://www.ferc.gov) and in FERC's Public Reference Room during normal business 

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

Washington DC 20426.

48. From FERC'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. To access this document in 

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

docket number field.

49. User assistance is available for eLibrary and the FERC’s website during 

normal business hours from FERC Online Support at (202) 502-6652 (toll free at 

1-866-208-3676) or email at ferconlinesupport@ferc.gov, or the Public Reference Room 

at (202) 502-8371, TTY (202)502-8659. E-mail the Public Reference Room at 

public.referenceroom@ferc.gov.

 41 5 U.S.C. 605(b).
Docket No. RM96-1-041 - 29 -

X. Effective Date and Congressional Notification

50. These regulations are effective [INSERT DATE 60 DAYS FROM THE LATER 

OF THE DATE CONGRESS RECEIVES THE AGENCY NOTICE OR THE 

DATE THE RULE IS PUBLISHED IN THE FEDERAL REGISTER]. The 

Commission has determined (with the concurrence of the Administrator of the Office of 

Information and Regulatory Affairs of OMB) that this rule is not a “major rule” as 

defined in section 351 of the Small Business Regulatory Enforcement Fairness Act 

of 1996. This Final Rule is being submitted to the Senate, House, and Government 

Accountability Office.

List of Subjects in 18 CFR Part 284

Incorporation by reference, Natural gas, Reporting and recordkeeping requirements.

By the Commission. Commissioner McIntyre is not voting on this order.

( S E A L )

Nathaniel J. Davis, Sr.,

Deputy Secretary.
Docket No. RM96-1-041 - 30 -

In consideration of the foregoing, the Commission amends 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. 717-717z, 3301-3432; 42 U.S.C. 7101-7352; 43 U.S.C. 1331-

1356.

2. Section 284.12 is amended by:

a. Revising paragraph (a)(1); and

b. removing from paragraph (a)(2) the phrase 

“http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html” 

and adding “www.archives.gov/federal-register/cfr/ibr-locations.html” in its place.

The revision to paragraph (a)(1) reads as follows:

Section 284.12 Standards for pipeline business operations and communications.

 (a) * * *

 (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 herein by 

reference in paragraphs (a)(1)(i) thru (vii) of this section.

 (i) Additional Standards (Version 3.1, September 29, 2017);

 (ii) Nominations Related Standards (Version 3.1, September 29, 2017); 

 (iii) Flowing Gas Related Standards (Version 3.1, September 29, 2017);

 (iv) Invoicing Related Standards (Version 3.1, September 29, 2017);

 (v) Quadrant Electronic Delivery Mechanism Related Standards (Version 3.1, 

September 29, 2017);

 (vi) Capacity Release Related Standards (Version 3.1, September 29, 2017); and
Docket No. RM96-1-041 - 31 -

 (vii) Internet Electronic Transport Related Standards (Version 3.1, September 29, 

2017).

 * * * *