[Federal Register Volume 77, Number 35 (Wednesday, February 22, 2012)]
[Proposed Rules]
[Pages 10415-10422]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-4041]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 284

[Docket No. RM96-1-037]


Standards for Business Practices for Interstate Natural Gas 
Pipelines

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of proposed rulemaking.

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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.
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    \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.

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DATES: Comments are due March 23, 2012.

ADDRESSES: Comments, identified by docket number, may be filed in the 
following ways:
    <bullet> Electronic Filing through http://www.ferc.gov. Documents 
created electronically using word processing software should be filed 
in native applications or print-to-PDF format and not in a scanned 
format.
    <bullet> 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.

[[Page 10416]]


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

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 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.
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    \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).
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    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 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 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\
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    \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).
    \4\ Order No. 698, FERC Stats. & Regs. ] 31,251 at P 12-13.
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    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 
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

[[Page 10417]]

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.
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    \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).
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    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 
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 
Web site data labels as well as the ability to provide Informational 
Postings report downloads in a comma-separated-value (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'' Web site on 
the service 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 Plan \6\ 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' Web sites.
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    \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.
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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.

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 process of updating and 
improving NAESB's business practice standards for the benefit of the 
wholesale gas market.
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    \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.
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    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\
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    \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. 104-113, section 12(d), 110 Stat. 775 (1996), 15 
U.S.C. 272, note (1997).

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[[Page 10418]]

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 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\
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    \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).
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b. Standards 0.3.19 and 0.3.21
    19. NAESB adopted new Standards\15\ and Datasets\16\ in Version 2.0 
designed to specify the business practices for the dissemination of 
operationally available and 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.
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    \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).
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    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 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 Sec.  
284.13 of the Commission's regulations.
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    \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 Sec.  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.
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    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\
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    \18\ NAESB Standard 1.3.2 established four nomination cycles 
(Timely, Evening, Intra-day 1, and Intra-Day 2).
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    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 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\
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    \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.
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    (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;

[[Page 10419]]

    (b) For those standards not incorporated by reference, the tariff 
provision that complies with the standard; \20\ and
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    \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.
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    (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\
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    \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.
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    (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 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 Web site (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\
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    \22\ http://www.ferc.gov/docs-filing/elibrary.asp.
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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.
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    \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).
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    (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 Standards). Pipelines will need to seek renewal of 
any such waivers or extensions for each version of the standards the 
Commission adopts.\24\
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    \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.''
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    (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\
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    \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.
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    (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 an order or the docket number of the 
proceeding in which the initial waiver or extension of time was 
granted.\27\
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    \27\ See Order No. 587-U, FERC Stats. & Regs. ] 31,307 at P 38-
39.
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    (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.
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    \28\ See T.W. Phillips Pipeline Corp., 137 FERC ] 61,104, at P 
11 (2011).
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    (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); 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\
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    (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 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

[[Page 10420]]

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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    (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 Web site 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 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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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 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.

----------------------------------------------------------------------------------------------------------------
                                                                Number of
             Data collection                  Number of       responses per       Hours per      Total number of
                                             respondents       respondent         response            hours
----------------------------------------------------------------------------------------------------------------
FERC-545 \35\...........................               161                 1                10             1,610
FERC-549C \36\..........................               161                 1                22             3,542
                                         -----------------------------------------------------------------------
    Totals..............................  ................  ................  ................             5,152
----------------------------------------------------------------------------------------------------------------

    Total Annual Hours for Collections (Reporting and Recordkeeping, if 
appropriate) = 5,152.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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.

------------------------------------------------------------------------
                                          FERC-545          FERC-549C
------------------------------------------------------------------------
Annualized Capital/Startup Costs....           $94,990          $208,987
Annualized Costs (Operations &                     N/A               N/A
 Maintenance).......................
                                     -----------------------------------
    Total Annualized Costs..........            94,990           208,987
------------------------------------------------------------------------

    Total Cost for all Respondents = $303,968.
    30. OMB regulations \38\ 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.
---------------------------------------------------------------------------

    \38\ 5 CFR 1320.11.
---------------------------------------------------------------------------

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

[[Page 10421]]

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/start-up).
    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 Web sites 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 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., Washington, DC 20426 [Attention: 
Ellen Brown, Office of the Executive Director, email: 
<a href="/cdn-cgi/l/email-protection#6b2f0a1f0a28070e0a190a05080e2b0d0e1908450c041d"><span class="__cf_email__" data-cfemail="34705540557758515546555a575174525146571a535b42">[email protected]</span></a>, 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, for information gathering, 
analysis, and dissemination, and for sales, exchange, and 
transportation of natural gas that requires no construction of 
facilities.\41\ Therefore, an environmental assessment is unnecessary 
and has not been prepared as part of this NOPR.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

VII. Regulatory Flexibility Act Certification

    34. The Regulatory Flexibility Act of 1980 (RFA) \42\ 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 alternatives that 
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 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.\44\
---------------------------------------------------------------------------

    \42\ 5 U.S.C. 601-612.
    \43\ 13 CFR 121.101.
    \44\ 13 CFR 121.201, subsection 486.
---------------------------------------------------------------------------

    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 most recent year for which information 
is available), only seven companies not affiliated with 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 are 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 per 
company.\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 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.
---------------------------------------------------------------------------

    \45\ This number is derived by dividing the total cost figure by 
the number of respondents. $303,968/161 = $1,888.
---------------------------------------------------------------------------

    36. Accordingly, pursuant to Sec.  605(b) of the RFA, the 
regulations proposed herein should not have a significant economic 
impact on a substantial number of small entities.

VIII. Comment Procedures

    37. The Commission invites interested persons to submit written 
comments on the NAESB business practice standards

[[Page 10422]]

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 March 23, 2012. Comments must refer to Docket 
No. RM96-1-037, and must include the 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 word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    39. Commenters that are not able to file comments electronically 
must send an 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 remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

IX. Document Availability

    41. 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 the Commission's Home Page (http://www.ferc.gov) and 
in the Commission's Public Reference Room during normal business hours 
(8:30 a.m. to 5 p.m. Eastern time) at 888 First Street NE., Room 2A, 
Washington, DC 20426.
    42. From the Commission's Home Page on the Internet, this 
information is available on eLibrary. The full text of this document is 
available on eLibrary in PDF and Microsoft Word format for viewing, 
printing, and/or downloading. To access this 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 
Web site during normal business hours from the Commission's Online 
Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at 
<a href="/cdn-cgi/l/email-protection#89efecfbeae6e7e5e0e7ecfafcf9f9e6fbfdc9efecfbeaa7eee6ff"><span class="__cf_email__" data-cfemail="54323126373b3a383d3a31272124243b262014323126377a333b22">[email protected]</span></a>, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
<a href="/cdn-cgi/l/email-protection#f9898c9b95909ad78b9c9f9c8b9c979a9c8b969694b99f9c8b9ad79e968f"><span class="__cf_email__" data-cfemail="d3a3a6b1bfbab0fda1b6b5b6a1b6bdb0b6a1bcbcbe93b5b6a1b0fdb4bca5">[email protected]</span></a>.

List of Subjects in 18 CFR Part 284

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

    By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

    In consideration of the foregoing, the Commission proposes to amend 
18 CFR 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:


Sec.  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 
(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.
* * * * *
[FR Doc. 2012-4041 Filed 2-21-12; 8:45 am]
BILLING CODE 6717-01-P


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