152 FERC ¶ 61,212

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Norman C. Bay, Chairman;

 Philip D. Moeller, Cheryl A. LaFleur,

Tony Clark, and Colette D. Honorable.

Coordination of the Scheduling Processes of Interstate

 Natural Gas Pipelines and Public Utilities

Docket No. RM14-2-001

ORDER ON REHEARING

(Issued September 17, 2015)

1. In Order No. 809, the Commission revised its regulations relating to the 

scheduling of transportation service on interstate natural gas pipelines to better coordinate 

the scheduling practices of the wholesale natural gas and electric industries, as well as to 

provide additional scheduling flexibility to all shippers on interstate natural gas 

pipelines.1

 The Commission also requested that natural gas and electric industries, 

through the North American Energy Standards Board (NAESB), explore the potential for 

faster, computerized scheduling when shippers and confirming parties all submit 

electronic nominations and confirmations, including a streamlined confirmation process 

if necessary. On May 18, 2015, the Desert Southwest Pipeline Stakeholders (DSPS)2

filed a request for rehearing of Order No. 809. On August 4, 2015, NAESB filed a report 

indicating that due to the press of implementing the revised nomination standards by 

April 1, 2016, it would not begin the development of computerized scheduling standards 

until after that date. As discussed below, the Commission denies DSPS’ request for 

 1 Coordination of the Scheduling Processes of Interstate Natural Gas Pipelines 

and Public Utilities, Order No. 809, 80 Fed. Reg. 23197 (Apr. 24, 2015), FERC Stats. & 

Regs. ¶ 31,368 (cross-referenced at 151 FERC ¶ 61,049 (2015)) (Order No. 809 or Final 

Rule).

2 DSPS consists of Arizona Corporation Commission, Arizona Public Service 

Company, El Paso Electric Company, Public Service Company of New Mexico, Salt 

River Project Agricultural Improvement and Power District, Tucson Electric Power 

Company and UNS Gas, Inc.
Docket No. RM14-2-001 - 2 -

rehearing and directs El Paso Natural Gas Company, L.L.C. (El Paso), Transwestern 

Pipeline Company, LLC (Transwestern), and TransCanada-North Baja Pipelines 

(TransCanada-North Baja) to make an informational filing within 90 days of the date of 

this order. In addition, while we recognize the time commitments in implementing the 

revised nomination timeline, the Commission requests that the natural gas and electric 

industries, through NAESB, begin considering the development of standards related to 

faster, computerized scheduling and file such standards or a report on the development of 

such standards with the Commission by October 17, 2016.

I. Background

2. Under Commission regulations, pipeline shippers can choose from two types of 

services: firm services that shippers reserve through payment of a monthly reservation 

fee and interruptible service for which shippers pay a volumetric usage charge. A firm 

shipper’s primary receipt and delivery points are listed in its service agreement and 

define the guaranteed firm transportation service the pipeline has contracted to provide 

that shipper. The Commission also requires pipelines to permit firm shippers to use all 

other points in the rate zones for which they pay on a secondary firm basis. In scheduling 

service, nominations of primary firm service enjoy the highest priority, followed by 

nominations of secondary firm service, and then interruptible service as the lowest 

priority.

3. The Commission also has incorporated by reference into its regulations standards 

promulgated by the NAESB Wholesale Gas Quadrant (WGQ) that establish the timing of 

the nominations.3

 These standards provide a number of nomination opportunities for 

shippers to schedule transportation service for the Gas Day starting at 9:00 a.m. Central 

Clock Time (CCT): (a) the Timely Nomination Cycle, which occurs the day before the 

Gas Day on which the gas will flow; (b) the Evening Nomination Cycle, which occurs 

late in the day prior to gas flow and allows shippers to modify their Timely Nomination 

Cycle schedules; and (c) two intraday nominations (now three after Order No. 809) that 

occur during the Gas Day. 

4. The Timely Nomination Cycle and all subsequent nomination cycles follow the 

standard scheduling priority in which primary firm service has the highest scheduling 

priority, followed by secondary firm, and finally interruptible service. But different rules 

determine whether a nomination, once scheduled, can be bumped or displaced in the 

Evening and intraday nomination cycles. In those cycles, any firm service already 

scheduled (whether primary or secondary) cannot be bumped or displaced by another 

 3 NAESB is a consensus standards organization. 
Docket No. RM14-2-001 - 3 -

nomination. Already scheduled interruptible service can be bumped by a firm 

nomination at the Evening Nomination Cycle and the intraday cycles, but cannot be 

bumped at the last intraday (or no-bump) cycle. The No-Bump Rule reflects a consensus 

of the natural gas industry, including both firm and interruptible shippers, reached while 

developing intraday nomination standards. The Commission adopted this standard in 

1998.4

5. On April 16, 2015, the Commission issued Order No. 809. In Order No. 809, the 

Commission, among other things, revised its regulations to incorporate by reference 

modified NAESB WGQ Business Practice Standards, which revised the standard 

nomination timeline for interstate natural gas pipelines.5

 Among other changes to the 

nomination timeline, the Timely Nomination Cycle nomination deadline was moved from 

11:30 a.m. CCT to 1:00 p.m. CCT. Another intraday nomination cycle was added 

resulting in three intraday nomination cycles instead of two. Under the revised timeline, 

Intraday 1 nominations are due at 10:00 a.m. CCT with gas flowing at 2:00 p.m. CCT,

Intraday 2 nominations are due at 2:30 p.m. CCT with gas flowing at 6:00 p.m. CCT, and 

Intraday 3 nominations are due at 7:00 p.m. CCT with gas flowing at 10:00 p.m. CCT. In 

addition, under the revised nomination timeline, Intraday 3 becomes the no-bump cycle.

6. In Order No. 809, the Commission declined to modify or eliminate the longstanding No-Bump Rule, as requested by several entities, including DSPS.6

 The 

Commission found sufficient support for retaining a no-bump cycle and respecting the 

natural gas industry consensus that had been achieved. In continuing the No-Bump Rule, 

the Commission stated that interruptible shippers need some stability in the nomination 

system and making the last intraday nomination opportunity no-bump would provide 

stability to the nomination system. Moving the last bumpable cycle to later in the day 

(i.e., the new Intraday 2 Nomination Cycle at 2:30 p.m. CCT instead of the previous 

 4 Standards for Business Practices of Interstate Natural Gas Pipelines, 

Order No. 587-G, FERC Stats. & Regs., ¶ 31,062, order on reh’g, Order No. 587-I, 

63 FR 53565, 53569 (Oct. 6, 1998), FERC Stats. & Regs., Regulations Preambles 1996 –

2000 ¶ 31,067 (1998).

5 The Commission required interstate natural gas pipelines to comply with the 

revised NAESB standards beginning on April 1, 2016. See also Coordination of the 

Scheduling Processes of Interstate Natural Gas Pipelines and Public Utilities,152 FERC 

¶ 61,095 (2015) (clarifying that the new day-ahead nomination timelines will apply as of 

March 31, 2016 for those nominations that will become effective April 1, 2016).

6 Order No. 809, 151 FERC ¶ 61,049 at P 102, 106.
Docket No. RM14-2-001 - 4 -

Intraday 1 Nomination Cycle at 10:00 a.m. CCT) helps to accommodate the needs of the 

firm shippers, while maintaining the No-Bump Rule during the Intraday 3 Nomination 

Cycle provides stability for interruptible shippers. The Commission found that this

achieved a reasonable balance of interests.

7. In Order No. 809, the Commission also declined to adopt DSPS’ two other 

proposals: (1) to move the Evening Nomination Cycle from 6:00 p.m. CCT to 7:00 p.m. 

CCT; and (2) to modify the Commission’s policy on natural gas scheduling priority to 

require all pipelines to permit primary firm nominations to bump secondary firm 

nominations in the Evening Nomination Cycle.

7 The Commission stated that, with 

respect to the proposed change to the timing of the Evening Nomination Cycle, DSPS

failed to make clear how moving the start time of the Evening Nomination Cycle one 

hour later to 7:00 p.m. CCT provided shippers in its region with a more timely 

opportunity to address operating contingencies that arise fourteen hours later during the 

Gas Day.8

 Given the wide support for the revised NAESB Evening Nomination Cycle 

and the largely unexplained benefits of moving the Evening Nomination Cycle later, the 

Commission found that making such a change to the Evening Nomination Cycle was 

unwarranted. 

8. The Commission similarly declined to announce a new policy permitting primary 

firm nominations to bump scheduled secondary firm service in the Evening Nomination 

Cycle. The Commission found that the benefits of DSPS’ proposal did not outweigh the 

burdens that would be placed on all interstate pipelines and secondary firm shippers as a 

result of such proposal.9

 Based on the comments, allowing primary firm to bump 

secondary firm would move the major confirmation and scheduling period outside of 

normal business hours, making it more difficult for a pipeline operator to confirm a 

shipper’s nomination with point operators, producers and shippers. It could also disrupt 

the liquid secondary market for capacity by reducing the value of obtaining released 

capacity. 

9. The Commission also declined to require implementation of DSPS’ 1-year 

regional pilot program, which would have allowed firm shippers to enter a “make-up” 

nomination in the Evening Nomination Cycle.

10 The Commission stated that the record 

 7 Id. P 121.

8 Id. P 122.

9 Id. P 123.

10 Id. P 127.
Docket No. RM14-2-001 - 5 -

was insufficient for it to require the pipelines to institute DSPS’ requested pilot program. 

The comments of the pipelines affected by the proposal indicated that they were 

uncertain of the operational feasibility of instituting a make-up nomination, but were 

interested in discussing the issue further with the DSPS shippers. Given the comments, 

the Commission lacked any evidence that requiring these pipelines to offer make-up 

nominations during the Evening Nomination Cycle would be operationally feasible for all 

the pipelines. The Commission pointed out that one or more pipelines appeared willing 

to discuss potential service offerings that may help DSPS shippers and encouraged those 

discussions to proceed. 

II. Discussion

10. In its request for rehearing, DSPS raises many of the same arguments addressed 

by the Commission in the Final Rule. In summary, DSPS contends that Order No. 809 

failed to specifically address the problems identified by DSPS or to provide utilities in the 

Desert Southwest with any firm rights to access the natural gas transportation service that 

they have reserved, paid for, and need to ensure reliable service during their evening peak 

period of natural gas demand that occurs between 7:00 p.m. CCT and 9:00 p.m. CCT 

(5:00 p.m. and 7:00 p.m. local time in the Desert Southwest). 

11. As discussed below, the Commission denies DSPS’ request for rehearing. Given 

that DSPS’ circumstances are unique and regional in nature,11 we continue to find 

insufficient support in the record to modify the nationwide standards adopted in Order 

No. 809, as proposed by DSPS.

A. No-Bump Rule

1. Rehearing Requests

12. DSPS argues that the Commission erred in retaining the No-Bump Rule and in 

arbitrarily ignoring changed circumstances and new evidence demonstrating that there is 

no longer sufficient justification for providing interruptible shippers preferential access to 

firm capacity. DSPS argues that the new Intraday 2 Nomination Cycle, with a 

nomination deadline that occurs at 12:30 p.m. in the west (2:30 p.m. CCT), does not 

address its problem of obtaining firm access to capacity during the evening periods of 

peak demand in the Desert Southwest. DSPS argues that firm transportation contracts are 

 11 DSPS Request for Rehearing at 37 (“...DSPS recognizes that no other region of 

the country currently experiences all of these unique circumstances and limitations that 

are faced by the DSPS,...”). See, e.g., Order No. 809, 151 FERC ¶ 61,049 at P 127.
Docket No. RM14-2-001 - 6 -

intended to provide superior service and interruptible transportation contracts run the risk 

of being interrupted. DSPS further argues that continuation of the No-Bump Rule 

ignores these facts and is now operating contrary to good public policy. 

13. DSPS contends that the No-Bump Rule was a concession to the pipeline industry 

and it was never intended to be an agreement to expand the rights of interruptible 

shippers. DSPS states that, in the 1980s and early 1990s, shippers submitted nominations 

to pipelines for natural gas transportation two days in advance of the gas flow day. DSPS 

states that, in 1997, industry representatives became actively engaged in discussions 

conducted by the Gas Industry Standards Board (GISB), the predecessor to NAESB, to 

enhance the natural gas nomination and scheduling process. DSPS states that, as a 

negotiating concession to obtain the pipeline industry’s agreement to allow a total of 

four nomination opportunities (inclusive of a Timely Nomination Cycle, an Evening 

Nomination Cycle and two intraday nomination cycles), the gas industry created and 

agreed to the concept that became known as the No-Bump Rule. DSPS states that this 

rule was merely an agreement specifically designed to recognize the time commitment 

associated with manually terminating the interruptible flows and rescheduling the firm 

flows and to give the pipelines the assurance that the final intraday nomination cycle 

would not be as time consuming as the other nomination cycles. DSPS states that this 

settlement accommodation was never intended to be an agreement by the industry to 

expand or create new “pseudo-firm” rights or entitlements for interruptible shippers or to 

forevermore allow interruptible shippers a subsequent opportunity to renominate their 

bumped volumes. 

14. DSPS states that, despite the technological advancements in programming and 

scheduling that have occurred since the adoption of the No-Bump Rule, Order No. 809 

effectively precludes a firm contract holder from accessing its capacity for almost 

two-thirds of the day.12 DSPS states that, under Order No. 809, the utilities in the 

Desert Southwest have no firm or bumpable nomination opportunities after the modified 

Intraday 2 nomination deadline at 12:30 p.m. (2:30 p.m. CCT). DSPS states that, if the 

No-Bump Rule was eliminated, the cycles contained in Order No. 809 would be 

agreeable to DSPS, as the Intraday 3 Nomination Cycle would occur at a time that is 

coincident with the evening peak electric period. If the Commission maintains the 

No-Bump Rule, DSPS argues that the changed circumstances and policy considerations 

set forth in their request for rehearing require the addition of a bumpable cycle during the 

evening peak period of electric demand in the Desert Southwest. 

 12 DSPS states that an interruptible shipper whose nomination is confirmed during 

Intraday 2 is guaranteed at least 15 hours of flow (i.e., from the flow time of Intraday 2 at 

6:00 p.m. until the 9:00 a.m. beginning of the next Gas Day). 
Docket No. RM14-2-001 - 7 -

15. DSPS contends that there have been four significant changes to the electric and 

gas industries since 1997 that render the No-Bump Rule outdated and no longer useful. 

First, DSPS states that the deregulation of the electric industry and the establishment of 

organized electric markets have created new industry players and reliability changes. 

DSPS states that the increased number of players in the electric industry present new 

reliability challenges that involve pipeline system utilization and infrastructure issues, as 

well as Regional Transmission Organization issues related to the lack of transparency in 

dispatching generators that are supported by firm or interruptible transportation. DSPS 

states that the No-Bump Rule discourages firm contracting, which is needed to ensure 

reliability, stimulate infrastructure development, and facilitate transparency in generation 

dispatch. Second, DSPS states that the shale revolution has facilitated the growth in 

natural gas-fired power plants, shifting the manner in which pipelines are utilized and 

necessitating infrastructure development. DSPS argues that policies like the No-Bump 

Rule that devalue firm transportation and enhance the value of interruptible transportation 

effectively discourage infrastructure development. Third, DSPS states that the 

accelerated coal to gas shift prompted by new environmental regulations requires the 

removal of policies that hinder infrastructure development. DSPS states that application 

of the No-Bump Rule hinders infrastructure development because firm shippers in the 

Desert Southwest cannot access the firm capacity they have under contract and, as a 

result, there is no incentive or justification for acquiring more firm contracts. Fourth, 

DSPS states that implementation of renewable portfolio standards requires timely and 

reliable access to natural gas to backstop intermittent renewables. DSPS states that the 

application of the No-Bump Rule, combined with the two hour time zone difference 

between the Desert Southwest and the NAESB CCT nomination cycle, precludes utilities 

with firm contracts from having timely access to firm capacity in the evening peak 

periods in the Desert Southwest (i.e., between 5:00 p.m. and 7:00 p.m. local time).

16. DSPS states that intraday access to firm transportation rights during the evening 

peak period is critical to maintain system reliability. DSPS states that the Desert 

Southwest does not have local market area gas storage, which makes it difficult to 

respond to unexpected changes in demand associated with contingencies that only present 

themselves during the evening peak period. DSPS also states that the Desert Southwest 

is the home of a growing percentage of renewable energy resources, which, given their 

intermittent nature, require quick-starting natural gas to ensure reliable energy. DSPS 

also states that while the peak hours of electric demand are not likely to change 

significantly, the peak hours of natural gas demand for natural gas-fired generation are 

anticipated to move later in the day to correspond with the drop in solar power that 

coincides with the setting of the sun. 

17. As a general matter, DSPS argues that the Commission erred in failing to establish 

an intraday nomination policy that properly assigns firm contract and interruptible 

contract rights to pipeline transportation in a manner that is consistent with cost 
Docket No. RM14-2-001 - 8 -

responsibility and that promotes infrastructure development. DSPS states that, moreover, 

such an outcome is inconsistent with the Commission’s long-held policies that reflect the 

fact that a fundamental goal of the Commission has been to ensure that pipeline capacity 

is provided to those who value the capacity the most as evidenced by the shippers 

willingness to pay the highest price for the longest reasonable term to obtain such 

capacity. DSPS states that parties willing to commit resources to reserve pipeline 

capacity on a firm basis should be entitled to as much access to their reserved capacity as 

technology can provide. Conversely, as the name interruptible suggests, caveat emptor

should apply to shippers that purchase interruptible capacity and are subsequently 

interrupted as interruptible shippers should have no expectation of guaranteed flow time 

or opportunities to renominate bumped volumes.

2. Commission Determination

18. DSPS contends that Order No. 809 erred in retaining the No-Bump Rule because it 

precludes firm shippers from using their firm capacity rights to meet the evening peak 

electric demands in the Desert Southwest (i.e., between 7:00 p.m. CCT and 9:00 p.m.

CCT, which is 5:00 p.m. and 7:00 p.m. local time in the Desert Southwest). We continue 

to find insufficient justification for revising the nationwide no-bump cycle and 

overturning the natural gas industry consensus that was achieved. As several 

commenters maintained, and as the Commission has previously recognized, interruptible 

shippers need some stability in the nomination system. In Order No. 587-G, the 

Commission accepted a consensus of the natural gas industry, including both firm and 

interruptible shippers, and accepted standards that provided that the last intraday 

nomination opportunity would not permit bumping of interruptible service. In adopting 

the standards, the Commission agreed that making the last intraday nomination 

opportunity no-bump created a fair balance between firm shippers, who had two 

opportunities to reschedule their gas (i.e., the Evening and Intraday 1 Nomination 

Cycles), and interruptible shippers, and provided stability in the nomination system.

13

19. The Commission found that the record in this rulemaking confirmed the original

consensus and did not support elimination of the No-Bump Rule. Retaining the no-bump 

cycle was strongly supported in the NAESB process and a consensus of the gas industry, 

as well as many in the electric industry, voted to maintain the No-Bump Rule in the last 

intraday cycle.

14 Similarly, many commenters argued that the last intraday grid-wide 

nomination cycle should remain a no-bump cycle, as provided by NAESB’s revised 

 13 Order No. 587-G, FERC Stats. & Regs., ¶ 31,062 at 30,671-72.

14 Order No. 809, 151 FERC ¶ 61,049 at P 103.
Docket No. RM14-2-001 - 9 -

standards.15 As WBI Energy Transmission, Inc. (WBI Energy) contended, maintaining 

the last cycle as a no-bump cycle provides all shippers, pipelines, interconnects, 

producers and end users with needed certainty with regard to late-in-the-day 

usage.16 Disallowing bumping of interruptible shippers during the modified Intraday 3 

Nomination Cycle helps prevent additional operational concerns for pipelines in that they 

will not need to revise their Gas Day set-up late in the day, when their personnel or 

counterparties’ personnel may not be available. In addition, the No-Bump Rule plays an 

important role in balancing the flexibility needs of interruptible shippers with available 

capacity while providing priority to firm shippers (who incurred the firm shipping costs) 

over interruptible shippers through the modified NAESB Intraday 2 Nomination Cycle.17 

The Natural Gas Supply Association (NGSA) maintained that interruptible service 

provides significant benefits to the market, such as increasing capacity utilization and 

lowering costs for all shippers, providing market alternatives to pipeline firm 

transportation and the secondary capacity release market, and allowing shippers to make 

alternative transportation arrangements during maintenance periods or unforeseen 

outages. As NGSA argued, eliminating the No-Bump Rule would diminish the value of 

interruptible transportation and accordingly, these significant benefits.18 Maintaining the 

last intraday cycle as a no-bump cycle also provides stability in the nomination system by 

allowing market participants, including pipelines, to rearrange transactions during the 

business day when interruptions to nominations can be more effectively addressed.

20. DSPS further contends that the Commission erred in failing to establish an 

intraday nomination policy that properly assigns firm contract and interruptible contract 

rights to pipeline transportation in a manner that is consistent with cost responsibility and 

that promotes infrastructure development. We do not find our decision here inconsistent 

with cost responsibility. While firm shippers pay a reservation charge to reserve pipeline 

capacity, the volumetric usage charge for interruptible transportation service is normally 

designed based on a 100 percent load factor equivalent of firm transportation rates, such 

that interruptible service is allocated a share of the pipeline’s fixed costs equivalent to the 

fixed costs allocated to a firm shipper that uses its full contract demand. As described 

above, the No-Bump Rule seeks to balance the interests of firm shippers with those of 

 15 Id. 

16 WBI Energy Comments at 5. 

17 Order No. 809, 151 FERC ¶ 61,049 at P 103 (citing Enhanced Reliability 

Coalition Comments at 31).

18 NGSA Comments at 19-20.
Docket No. RM14-2-001 - 10 -

interruptible shippers by permitting firm service to bump interruptible service at all but 

the last intraday nomination cycle. DSPS has not shown that the design of the 

nomination schedule results in an improper allocation of costs.

21. Moreover, although the Commission did not eliminate the No-Bump Rule, it did 

recognize the need for firm shippers to have additional flexibility. In the Notice of 

Proposed Rulemaking, the Commission proposed four intraday nomination cycles, which 

would have added two intraday opportunities for firm nominations to bump interruptible 

shippers and charged NAESB with developing a consensus proposal. In Order No. 809, 

the Commission adopted the NAESB consensus standards with three intraday nomination 

cycles, which added a second bumpable intraday cycle at 2:30 p.m. CCT at which firm 

nominations can bump interruptible nominations. This cycle will permit DSPS and other 

firm shippers in the Desert Southwest an additional four and one-half hours to assess 

potential weather changes and submit revised firm nominations as compared to the 

current timeline. In addition, the Commission in Order No. 809 indicated that individual 

pipelines could propose additional nomination opportunities that permit bumping of 

interruptible shippers up until 5:30 p.m. CCT.19

22. While DSPS contends the revised 2:30 p.m. CCT Intraday 2 nomination cycle 

should be later to coincide with the evening peak electric demands in the Desert 

Southwest (i.e., 7:00 p.m. CCT), we find a reasonable basis for honoring the consensus of 

the natural gas industry, as well as many in the electric industry. Many of the comments

opposed moving the last bumpable cycle later in the day because it would force shippers 

and pipelines to manage interruptible transportation well after the close of the business 

day.20 

23. DSPS states that “satisfying the evening peak demands [in the Desert Southwest] 

is as important as ensuring the reliability of the morning peak period in the Northeast, 

which was the focus of the Commission’s attention in the Final Rule.”21 In Order 

No. 809, however, the Commission declined to change the Gas Day start time because 

the concerns underlying the proposal primarily were regional and could be addressed by 

regional initiatives.

22 We similarly decline to move the last bumpable cycle later to 

 19 Order No. 809, 151 FERC ¶ 61,049 at P 106 & n.174.

20 See, e.g., NGSA Comments at 18.

21 DSPS Request for Rehearing at 26.

22 Order No. 809, 151 FERC ¶ 61,049 at P 25. 
Docket No. RM14-2-001 - 11 -

accommodate the needs of a particular region. A number of pipelines already have 

adopted enhanced firm services that permit bumping of interruptible service after the 

standard nomination timelines,23 and we urge DSPS and the pipelines in the Desert 

Southwest to consider such regional solutions. In comments, at least one or more 

pipelines appeared willing to discuss potential service offerings that may further help 

Desert Southwest shippers.

24

24. In addition to enhanced nominations, the Commission also recognized in Order 

No. 809 that additional standardized intraday nomination opportunities could promote 

more efficient use of existing pipeline infrastructure and provide additional operational 

flexibility to all pipeline shippers.25 Accordingly, the Commission urged the natural gas 

and electric industries, through NAESB, to explore the potential for faster, computerized 

scheduling when shippers and confirming parties submit electronic nominations and 

confirmations, including a streamlined confirmation process if necessary. NAESB

reports that the Gas-Electric Harmonization Forum will begin planning for the 

development of electronic scheduling standards in 2016 due to the time commitments of 

members in transitioning to the revised nomination schedules.26

25. While the Commission recognizes the natural gas industry needs to devote 

computer and technical resources to implement the revised nomination timeline adopted 

by Order No. 809 by April 1, 2016, we find it reasonable for the industry to begin 

considering such standards and to submit standards or a report on the development of 

such standards by October 17, 2016.

26. Given these initiatives and the strong industry support for retaining the no-bump 

cycle, we find that DSPS has not provided sufficient justification for eliminating the 

No-Bump Rule and we deny rehearing.

 23 See, e.g., Texas Gas Transmission LLC, 137 FERC ¶ 61,093 (2011), order 

on compliance, 138 FERC ¶ 61,176 (2012)); Gulf South Pipeline Co., LP, 141 FERC 

¶ 61,262 (2012).

24 Order No. 809, 151 FERC ¶ 61,049 at P 125-26.

25 Id. P 107.

26 See NAESB August 4, 2015 Report at 3. 
Docket No. RM14-2-001 - 12 -

B. Bumping of Secondary Firm in Evening Nomination Cycle

1. Rehearing Requests

27. DSPS also contends that the Commission’s policy prohibiting scheduled 

secondary firm nominations from being bumped by primary firm nominations is further 

diluting the rights of primary firm shippers to access their capacity during bumpable 

intraday nomination cycles.27 DSPS contends that a change in Commission policy is 

warranted because it is aware of incidents where shippers have deliberately contracted for 

firm transportation (or released capacity) rights on unused or inexpensive pipeline paths

and instead of utilizing their primary firm pipeline path, the shippers routinely schedule 

secondary firm service outside of such path. DSPS contends that the unintended 

consequences surrounding the Commission’s policy on secondary firm nominations need 

to be examined by the Commission in order to promote long-term firm contracting28 and, 

at a minimum, secondary firm nominations should not be deemed firm until the first 

intraday nomination cycle.

2. Commission Determination

28. DSPS argues that the Commission erred by failing to modify its policy that, once 

scheduled, secondary firm service cannot be bumped in any subsequent nomination 

cycle, as proposed by DSPS. Again, DSPS’ proposal addresses what appears to be 

primarily a regional issue, which does not warrant a nationwide change in policy. 

Moreover, DSPS fails to explain in any detail how allowing primary firm service to bump 

secondary firm service at the Evening Nomination Cycle or first intraday nomination 

cycle would provide tangible benefits in the Desert Southwest region. The Evening 

Nomination Cycle occurs at 6:00 p.m. CCT the day prior to gas flow. DSPS, however, 

seems concerned with demand fluctuations occurring, for example, from changes in 

weather forecasts that occur the next day. Similarly, under the modified NAESB 

nomination schedule, the first intraday nomination cycle occurs at 10:00 a.m. CCT the 

day of gas flow, which DSPS states is too early in the day to address its evening peak 

demand. DSPS fails to support how allowing primary firm nominations to bump 

scheduled secondary firm service in the Evening Nomination Cycle or first intraday 

 27 DSPS Request for Rehearing at 4-5.

28 DSPS states that by analogy, the actions of the secondary firm capacity holder 

under this scenario would be similar to a situation on the electric side where an entity 

purchased point to point service but was being allowed to be treated as a network service 

customer.
Docket No. RM14-2-001 - 13 -

nomination cycle would appreciably affect demand fluctuations occurring in the evening 

the next Gas Day or in the evening the same Gas Day, respectively.

29. DSPS also ignores the harms identified by the comments to this proposal. As the 

commenters previously pointed out, allowing primary firm nominations to bump 

secondary firm nominations at the 6:00 p.m. CCT Evening Nomination Cycle would 

result in moving the major confirmation and scheduling period for the next Gas Day 

outside of normal business hours for both the pipelines as well as shippers, making it 

more difficult for a pipeline operator to confirm a shipper’s nomination with point 

operators, producers and shippers. It could also disrupt the liquid secondary market for 

capacity by reducing the value of obtaining released capacity. Accordingly, the 

Commission denies rehearing.

C. Pilot Program

1. Rehearing Requests

30. DSPS contends that the Commission’s rejection of its one-year pilot program to 

require the pipelines serving the Desert Southwest (i.e., El Paso, Transwestern, and 

TransCanada-North Baja) to permit make-up nominations during the Evening 

Nomination Cycle reflects a lack of understanding of the proposal. That proposal would 

allow firm shippers experiencing an unexpected increase in demand during the evening of 

the current Gas Day to submit a separate “retro/make-up” nomination during the Evening 

Nomination Cycle that would not take effect until the start of the next Gas Day but would 

make up for the unscheduled service they take during the current Gas Day. DSPS

proposes that the Commission establish technical conference procedures to examine the 

viability of the proposal. 

2. Commission Determination

31. At this time, the Commission finds insufficient basis to initiate a Natural Gas Act 

section 5 proceeding to further examine the viability of DSPS’ proposed pilot program as 

applied to the Desert Southwest. In their previous comments, pipelines serving the 

Desert Southwest, while interested in pursuing discussions with DSPS on scheduling

issues, also pointed out the substantial operational difficulties with the make-up 

nomination proposal. Kinder Morgan argued that, without expanding pipeline 

infrastructure, DSPS’ proposal poses substantial problems for a pipeline.

29 It maintained

 29 Order No. 809, 151 FERC ¶ 61,049 at P 125. For purposes of Order No. 809, 

Kinder Morgan includes El Paso.
Docket No. RM14-2-001 - 14 -

that such a service is akin to no-notice transportation service that may require 

construction of additional facilities, such as storage. Transwestern, another pipeline 

serving the Desert Southwest, stated that it is willing to work with DSPS and other 

regional entities to structure retroactive/make-up nominations and help customers

manage their loads in view of the unique operating circumstances of the Desert 

Southwest.30 DSPS, however, does not indicate in its rehearing request whether it has yet 

engaged Kinder Morgan or Transwestern in discussions regarding its proposal, as 

encouraged by the Commission. The Commission therefore finds insufficient support at 

this juncture for instituting proceedings to compel these pipelines to offer make-up 

nominations. We continue to encourage El Paso, Transwestern, and TransCanada-North 

Baja pipelines to continue discussions with DSPS regarding the pilot program. We direct 

El Paso, Transwestern, and TransCanada-North Baja to make an informational filing in 

this docket within 90 days of the date of this order regarding the status of those 

discussions. DSPS may also file comments at that time.

The Commission orders:

(A) DSPS’ request for rehearing is denied, as discussed in the body of this 

order.

(B) As directed in the body of this order, El Paso, Transwestern, and 

TransCanada-North Baja are directed to make an informational filing in this docket 

within 90 days of the date of this order.

By the Commission.

( S E A L )

Nathaniel J. Davis, Sr.,

Deputy Secretary.

 30 Id. P 126.