[Federal Register Volume 65, Number 193 (Wednesday, October 4, 2000)]
[Rules and Regulations]
[Pages 59111-59112]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-25437]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 284

[Docket No. RM96-1-016]


Standards For Business Practices Of Interstate Natural Gas 
Pipelines

Issued September 28, 2000.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule; Order Granting Clarification.

-----------------------------------------------------------------------

SUMMARY: The Federal Energy Regulatory Commission is granting 
clarification of Order No. 587-L (65 FR 41873), which established 
November 1, 2000, as the date by which pipelines are required to comply 
with the regulation requiring them to permit shippers to offset 
imbalances on different contracts held by the shipper and to trade 
imbalances. (18 CFR 284.12(c)(2)(ii)). The order clarifies that 
pipelines on which shippers do not incur imbalances and are not subject 
to imbalance penalties need not implement imbalance trading on their 
systems.

DATES: Pipelines seeking an exemption from the imbalance trading 
requirement must file within 15 days of the order to show why they 
should not be required to implement imbalance trading.

ADDRESSES: Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington DC 20426.

FOR FURTHER INFORMATION CONTACT:
Michael Goldenberg, Office of the General Counsel, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 
(202) 208-2294.
Marvin Rosenberg, Office of Markets, Tariffs, and Rates, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 
(202) 208-1283.
Kay Morice, Office of Markets, Tariffs, and Rates, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 
(202) 208-0507.

SUPPLEMENTARY INFORMATION:   
    Before Commissioners: James J. Hoecker, Chairman; William L. 
Massey, Linda Breathitt, and Curt Hebert, Jr.

Order Granting Clarification

Issued September 28, 2000.

    Iroquois Gas Transmission System, L.P. (Iroquois) and Michigan Gas 
Storage Company (Michigan) filed requests for clarification or 
rehearing of Order No. 587-L. \1\ Order No. 587-L established November 
1, 2000 as the date by which pipelines are required to implement 
section 284.12(c)(2)(ii) of the Commission's regulations requiring 
pipelines to implement imbalance netting and trading on their 
systems.\2\ Pipelines are required to file tariff sheets to implement 
imbalance trading in sufficient time for the tariff changes to become 
effective November 1, 2000.
---------------------------------------------------------------------------

    \1\ Standards For Business Practices Of Interstate Natural Gas 
Pipelines, Order No. 587-L, 65 FR 41873 (July 7, 2000), III FERC 
Stats. & Regs. Regulations Preambles para. 31,100 (June 30, 2000).
    \2\ 18 CFR 284.12(c)(2)(ii).
    \3\ Regulation of Short-Term Natural Gas Transportation Services 
and Regulation of Interstate Natural Gas Transportation Services, 
Order No. 637-A, 65 FR 35706, 35736 (Jun. 5, 2000), III FERC Stats. 
& Regs. Regulations Preambles para. 31,099, at 31,600-601 (May 19, 
2000).
---------------------------------------------------------------------------

    Iroquois and Michigan request clarification that pipelines on which 
shippers do not incur imbalances and are not subject to imbalance 
penalties are not required to implement imbalance trading on their 
systems. Iroquois and Michigan state that, in Order No. 637-A,\3\ the 
Commission determined that pipelines without imbalance penalties would 
not be required to offer imbalance management services, and contend 
that the same rationale should apply to imbalance trading.
    The Commission agrees that pipelines on which shippers do not incur 
imbalances and are not subject to imbalance penalties need not 
implement imbalance trading on their systems. The purpose of requiring 
imbalance trading was to establish a mechanism by which shippers can 
avoid imbalance charges. If shippers cannot incur imbalances, then 
shippers do not need to trade imbalances.
    However, the Commission cannot make a determination in a generic 
rulemaking proceeding as to whether the circumstances on an individual 
pipeline permit an exemption from the requirement to provide imbalance 
trading. Shippers on the individual systems should be given the 
opportunity to respond to any request for such an exemption. 
Accordingly, pipelines that seek an exemption from the imbalance 
trading requirement must file within 15 days of this order showing why 
they should not be required to implement imbalance trading on their 
systems.

The Commission Orders

    (A) The requests for clarification are granted, in part, as 
discussed in the body of the order.
    (B) Pipelines seeking an exemption from the imbalance trading 
requirement are required to file within 15 days of the

[[Page 59112]]

order to show why they should not be required to implement imbalance 
trading.

    By the Commission.
David P. Boergers,
Secretary.
[FR Doc. 00-25437 Filed 10-3-00; 8:45 am]
BILLING CODE 6717-01-P