[Federal Register Volume 65, Number 238 (Monday, December 11, 2000)]
[Rules and Regulations]
[Pages 77285-77292]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-30979]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 284

[Docket No. RM96-1-015; Order No. 587-M]


Standards for Business Practices of Interstate Natural Gas 
Pipelines

Issued November 30, 2000.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule and notice of technical conference.

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SUMMARY: The Federal Energy Regulatory Commission is amending 
Sec. 284.12 of its regulations governing standards for conducting 
business practices and electronic communication with interstate natural 
gas pipelines to incorporate by reference the most recent version of 
the standards, Version 1.4, promulgated August 31, 1999 and November 
15, 1999 by the Gas Industry Standards Board (GISB). The Commission 
also is announcing a technical conference by Commission staff to 
address the issues raised by a proposal to require pipelines to permit 
shippers to designate and rank the contracts under which gas will flow 
on a pipeline's system. Version 1.4 of the GISB standards can be 
obtained from GISB at 1100 Louisiana, Suite 3625, Houston, TX 77002, 
713-356-0060, http://www.gisb.org.

DATES: The rule will become effective January 10, 2001. The 
implementation date for the regulations is May 1, 2001. Pipelines must 
make filings to incorporate Version 1.4 of the GISB standards into 
their tariffs not less than 30 days prior to May 1, 2001.

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:

Final Rule and Notice of Technical Conference

    The Federal Energy Regulatory Commission (Commission) is amending 
Sec. 284.12 of its regulations governing standards for conducting 
business practices and electronic communications with interstate 
natural gas pipelines. The Commission is incorporating by reference the 
most recent version of the consensus industry standards promulgated by 
the Gas Industry Standards Board (GISB), Version 1.4. Pipelines are 
required to implement these regulations on May 1, 2001. The Commission 
also is directing its staff to convene a technical conference to 
discuss whether to adopt the proposed regulation requiring pipelines to 
permit shippers to designate and rank the contracts under which gas 
will flow on a pipeline's system.

I. Background

    In Order Nos. 587, 587-B, 587-C, 587-G, 587-H, 587-I, and 587-K the 
Commission adopted regulations to standardize the business practices 
and communication methodologies of interstate pipelines in order to 
create a more integrated and efficient pipeline grid.\1\ In those 
orders, the Commission incorporated by reference consensus standards 
developed by GISB, a private, consensus standards developer composed of 
members from all segments of the natural gas industry.
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    \1\ Standards For Business Practices of Interstate Natural Gas 
Pipelines, Order No. 587, 61 FR 39053 (Jul. 26, 1996), III FERC 
Stats. & Regs. Regulations Preambles para. 31,038 (Jul. 17, 1996), 
Order No. 587-B, 62 FR 5521 (Feb. 6, 1997), III FERC Stats. & Regs. 
Regulations Preambles para. 31,046 (Jan. 30, 1997), Order No. 587-C, 
62 FR 10684 (Mar. 10, 1997), III FERC Stats. & Regs. Regulations 
Preambles para. 31,050 (Mar. 4, 1997), Order No. 587-G, 63 FR 20072 
(Apr. 23, 1998), III FERC Stats. & Regs. Regulations Preambles para. 
31,062 (Apr. 16, 1998), Order No. 587-H, 63 FR 39509 (July 23, 
1998), III FERC Stats. & Regs. Regulations Preambles para. 31,063 
(July 15, 1998); Order No. 587-I, 63 FR 53565 (Oct. 6, 1998), III 
FERC Stats. & Regs. Regulations Preambles para. 31,067 (Sept. 29, 
1998), Order No. 587-K, 64 FR 17276 (Apr. 9, 1999), III FERC Stats. 
& Regs. Regulations Preambles para. 31,072 (Apr. 2, 1999).
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    On February 23, 2000, GISB filed with the Commission a letter 
stating it had adopted a revised version of its business practice and 
communication standards, Version 1.4. The Version 1.4 standards include 
the standards for implementing pipeline interactive Internet web sites, 
which pipelines were required to implement by June 1, 2000, as well as 
standards for critical notices, and standards for multi-tiered 
allocations.
    GISB also reported on certain issues on which the Commission had 
requested reports in Order No. 587-G. Of significance here, GISB 
reported that its Executive Committee was unable to reach consensus on 
standards for cross-contract ranking and that its confirmations and 
cross contract ranking subcommittee is considered inactive. In a letter 
dated June 15, 2000, GISB filed a follow-up report on cross contract 
ranking. GISB reports that its Executive Committee was unable to 
achieve consensus with respect to cross contract ranking due to 
disagreement on certain policy issues and that in the opinion of the 
Executive Committee no further progress can be made. GISB further 
reported that its Executive Committee approved standards for title 
transfer tracking, but that these standards are awaiting the 
development of the technical standards for information requirements and 
technical mapping.

[[Page 77286]]

    On June 30, 2000, the Commission issued a Notice of Proposed 
Rulemaking (NOPR) proposing to adopt Version 1.4 of the GISB standards 
and to adopt a regulation requiring pipelines to permit shippers to 
designate and rank the transportation contracts under which gas will 
flow on the pipeline's system.\2\ The Commission stated that cross-
contract ranking would enable shippers to use their transportation 
contracts more efficiently by enabling them to allocate gas supplies 
across their transportation contracts so that the shipper can choose 
the contract which provides for the most economical transportation.
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    \2\ Standards For Business Practices Of Interstate Natural Gas 
Pipelines, Notice of Proposed Rulemaking, 65 FR 41885 (July 7, 
2000), IV FERC Stats. & Regs. Proposed Regulations para. 32,552 
(June 30, 2000).
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    The Commission found that while the GISB record was not entirely 
clear on what prevented the adoption of cross-contract ranking 
standards, there appeared to be agreement on a method (entity-to-entity 
confirmation) by which such ranking could be achieved. The disputes 
apparently were over the amount of supplemental information pipelines 
should provide to shippers and over the method of confirmation with 
producers, independent of the cross-contract ranking issue. The 
Commission solicited comments on whether these issues were integral to 
the cross-contract ranking standard and whether these issues could be 
dealt with on an individual pipeline basis rather than through a 
generic rulemaking.
    Twenty comments were filed.\3\ Pipelines supported the use of 
entity-to-entity confirmation, but contended the Commission should not 
require the provision of supplemental information or working interest 
owner confirmations. Local Distribution Companies (LDCs) and endusers 
supported the provision of supplemental information, with endusers 
supporting a confirmation process based on gas package identifiers. 
Producers supported a confirmation process with producers or their 
agents.
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    \3\ Those filing comments are listed on Appendix A along with 
the abbreviation used throughout the order.
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II. Discussion

A. Adoption of Version 1.4 of the Standards

    The Commission is incorporating by reference into its regulations 
Version 1.4 of GISB's consensus standards.\4\ Pipelines must implement 
these standards on May 1, 2001, by making compliance filings as 
discussed later in this order.\5\
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    \4\ The Commission also is amending Sec. 284.12(b)(2) of its 
regulations to reflect the change in GISB's address.
    \5\ See the discussion of compliance procedures in Section VIII, 
Implementation Date, at text accompanying note 20.
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    The adoption of Version 1.4 of the standards updates and improves 
the standards, particularly in the areas of communication of critical 
notices and multi-tiered allocations.\6\ GISB approved the standards 
under its consensus procedures.\7\ No comments objected to the 
incorporation of these standards. 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 all 
segments of the industry. Moreover, since the industry itself has to 
conduct business under these standards, the Commission's regulations 
should reflect those standards that have the widest possible support. 
In Sec. 12(d) of the National Technology Transfer and Advancement Act 
(NTT&AA) of 1995, Congress affirmatively requires federal agencies to 
use technical standards developed by voluntary consensus standards 
organizations, like GISB, as means to carry out policy objectives or 
activities.\8\
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    \6\ Pipelines previously had been required to implement the 
interactive Internet standards in Version 1.4 by June 1, 2000. See 
18 CFR 284.12(c)(3)(i)(B). The following are the changes from the 
Version 1.3 standards previously adopted by the Commission. 
Standards that have been revised are: 1.3.24, 3.3.17, 4.2.7, 4.2.8, 
4.3.2, 4.3.8, 4.3.9, 4.3.28, 4.3.29, 4.3.34, 5.3.2, and 5.3.30. New 
standards are: 0.1.1, 0.1.2, 0.3.1, 1.3.47 through 1.3.63, 1.3.79, 
2.3.32 through 2.3.35, 3.3.23 through 3.3.25, 4.1.22 through 4.1.38, 
4.2.9 through 4.2.19, 4.3.36 through 4.3.85, 5.2.2, and 5.3.31 
through 5.3.42. Revised data sets are: 1.4.1 through 1.4.7, 2.4.1 
through 2.4.6, and 3.4.1 through 3.4.4. New data sets are 5.4.18 and 
5.4.19.
    \7\ This process first requires a super-majority vote of 17 out 
of 25 members of GISB's Executive Committee with support from at 
least two members from each of the five industry segments--
interstate pipelines, local distribution companies, gas producers, 
end-users, and services (including marketers and computer service 
providers). For final approval, 67% of GISB's general membership 
must ratify the standards.
    \8\ Pub L. No. 104-113, Sec. 12(d), 110 Stat. 775 (1996), 15 
U.S.C. 272 note (1997).
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    Dynegy requests clarification regarding the implementation of the 
standards providing for electronic notice of critical events affecting 
shippers. It asserts that the pipelines should provide a transition 
period for testing the new communication standards for critical notices 
before the pipelines rely solely upon Internet communication of such 
notices and discontinue their current communication methods. Dynegy 
contends that in Order No. 587-G, the Commission found that Internet 
communication could be sufficient notice to shippers of operational 
events, because the shipper could program its computers to trigger a 
telephone or pager. Dynegy is concerned that before shippers have to 
rely solely upon Internet communication, they be given the time to test 
whether their software can trigger a telephone or pager. Dynegy further 
requests that pipelines be required to continue their current method of 
communication until the customers software works satisfactorily.
    The Commission agrees that pipelines should provide shippers with a 
reasonable opportunity to test the Internet communications before the 
pipelines dispense with existing methods of notifying shippers of 
critical events. Pipelines, however, will not be required to continue 
existing forms of communication to individual shippers until the 
individual shipper has been able to configure its software correctly. 
The shipper should have the responsibility, within a reasonable time 
period, to correct problems with its own software.
    Altra asks that the Commission revise the implementation date for 
Version 1.4 of the standards so that the implementation of Version 1.4, 
cross-contract ranking, and title transfer tracking can occur 
simultaneously. Altra maintains that implementing such changes 
concurrently will be more economical for software providers as well as 
pipelines and their customers. The Commission understands that 
simultaneous implementation may be more efficient and generally 
attempts to adopt a complete version of the GISB standards at the same 
time. However, in this case, the Commission finds that the benefits 
from adopting Version 1.4 of the GISB standard should not be delayed 
until an indeterminate date when standards for cross-contract ranking 
and title transfer tracking are adopted.

B. Cross-Contract Ranking

    Cross-contract ranking refers to the ability of shippers to 
allocate gas supplies across transportation contracts so that the 
shipper can choose the contract which provides for the most economical 
transportation. Shippers are doing business using a variety of 
contracts, including their own firm and interruptible contracts, and 
capacity release contracts with different terms and conditions. The 
ability to allocate gas supplies among these contracts will enhance 
shipper flexibility and better

[[Page 77287]]

enable them to manage their gas supply and capacity portfolios.\9\
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    \9\ For example, a shipper may nominate gas from a single 
producer under two contracts: a firm contract with the pipeline and 
a capacity release contract which has a minimum volume commitment. 
If that shipper receives less gas from its producer than it has 
nominated, it might prefer to allocate more of its gas to the 
capacity release contract to satisfy its minimum volume commitment. 
Cross-contract ranking would permit the shipper to allocate its gas 
to the most economical contract.
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    In Order No. 587-G, the Commission deferred adoption of regulations 
regarding cross-contract ranking to give GISB an opportunity to develop 
standards governing this practice. GISB, however, was unable to reach 
consensus on appropriate standards due to policy disagreements among 
the industry segments, and states that it cannot proceed without 
further guidance from the Commission on the policy questions 
presented.\10\ All the industry segments appear to agree that 
developing standards for cross-contract ranking and confirmation 
practices can be of benefit to the industry. Because the Commission 
cannot resolve these issues based solely on the comments, the 
Commission is directing the Commission staff to establish a technical 
conference at which the issues can be explored in greater detail.
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    \10\ The Commission previously has resolved issues on which the 
GISB members could not reach consensus, so that GISB could move 
forward and develop the necessary technical standards to implement 
the Commission's determination. Standards For Busines Practices Of 
Interstate Natural Gas Pipelines, Order No. 587-G, 63 FR 20072, 
20073, 20075-78 (Apr. 23, 1998), III FERC Stats. & Regs. Regulations 
Preambles para. 31,062, at 30,663, 30-667-72 (Apr. 16, 
1998)(establishing priority for firm and interruptible 
transportation in intra-day nominations).
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1. Issues Raised by Cross-Contract Ranking
    While the record GISB submitted is not entirely clear, there did 
appear to be agreement that cross-contract ranking could be achieved 
through an entity-to-entity confirmation process.\11\ (Appendix B 
reproduces the set of standards that were considered, but not approved, 
by GISB's Executive Committee). Disputes developed over whether along 
with entity-to-entity confirmation pipelines should be required to 
provide supplemental information to shippers and whether pipelines 
should confirm with working interest owners rather than exclusively 
with point operators. The two standards on which agreement could not be 
reached are standard 2 and standard 3 of proposal CXKR-2.
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    \11\ See Proposed Standard 1 of CXKR-1 and CXKR-2 and New 
Standard S-1 of CXKR-3.
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    Standard 2 states:

    As part of the confirmation and scheduling process upon request, 
the TSP should make available, via EBB/EDM, supplemental information 
obtained during or derived from the nomination process. Such 
supplemental information, if available, should include the TSP's 
Service Requester Contract and, based upon the TSP's business 
practice may also, on a mutually agreeable basis, include (1) a 
derivable indicator characterizing the type of contract and service 
being provided, (2) Downstream Contract Identifier and/or (3) 
Service Requester's Package ID.

    Standard 3 states:

    Absent mutual agreement to the contrary between the TSP and the 
Operator for confirmations at a production location,\12\ the TSP 
should support the fact that the operator will confirm with the TSP 
to only the upstream entity level. These upstream entities should 
either confirm or nominate (at the TSP's determination) at an entity 
level with the TSP.

    \12\ Production location was defined to include wellheads, 
platforms, plant tailgates (excluding straddle plants) and physcial 
wellhead aggregation points. CXKR 1, Proposed Principle 1.
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    In the NOPR, the Commission proposed to require pipelines to permit 
shippers to designate and rank the transportation contracts under which 
gas will flow on each pipeline's system. The Commission generally 
proposed that such ranking would occur based on the entity-to-entity 
confirmation standards included in all the GISB proposals. The 
Commission, however, solicited comment on whether there is a need for a 
uniform generic standard setting forth additional, limited information 
pipelines should provide to local distribution companies or shippers 
and whether the need for additional information applies to all 
pipelines or is limited only to certain pipelines that currently 
provide such additional information to LDCs. With respect to the 
standard regarding production confirmation, the Commission asked for 
comment addressing the need for confirmations at the working interest 
level, the costs and benefits of adopting such a requirement for 
pipelines, shippers, and the overall efficiency of the pipeline grid, 
and whether a uniform requirement is necessary or whether pipelines 
should be permitted to choose the method of confirmation with producers 
that best fits their systems.
2. Comments
    All commenters generally support the concept of cross-contract 
ranking. They differ again on the necessity of requiring supplemental 
information and on confirmation at receipt points. Dynegy and Altra are 
indifferent to whether any requirements for supplemental information or 
producer confirmation are adopted. Altra contends that some of the 
other issues, such as working interest owner confirmation, are 
unrelated to the cross-contract ranking issue.
    The LDCs \13\ that filed comments contend that provision of 
supplemental information concerning the type of contract, which 
establishes scheduling priority, is necessary for LDCs to plan their 
system usage, particularly in light of the requirements of retail 
unbundling. They contend, for instance, that LDCs need to know the 
priority of gas nominated to their systems so they can plan for the 
possibility of losing gas supplies during peak periods if interruptible 
or secondary firm nominations are limited. They further contend that 
this information on priority is needed to satisfy the requirements of 
some state unbundling programs that marketers have primary firm 
capacity for deliveries to LDC city-gates. Con Edison, for instance, 
raises the question of how entity-to-entity confirmation will permit 
LDCs to confirm gas deliveries in a situation when two behind-the-city-
gate marketers both purchase gas from a third marketer at a downstream 
market center. It contends that without contract information, the LDC 
would not be able to match up the information from the marketer 
delivering the gas to the market center and the two behind-the-city-
gate marketers. Distribution argues that the necessary information 
could be provided through a capacity-type indicator, which would not be 
burdensome for the pipelines to process. In reply comments, 
Distribution contends that based on the comments filed, the Commission 
should convene a technical conference to provide further explanation of 
why LDCs need supplemental contract information and why providing such 
information should not be burdensome for the pipelines.
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    \13\ See comments to Cincinnati, Con Edison, Distribution, AGA.
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    The End User Group supports the concept of cross-contract ranking 
but claims that the NOPR proposal has two problems: it does not require 
pipelines to follow the rankings provided by shippers; and it does not 
provide shippers with the information necessary to determine what 
packages of gas actually flowed. Rather than aggregating information, 
as in the entity-to-entity confirmation method, the End Users contend 
that the confirmation process should be further disaggregated by 
confirming on a package identification

[[Page 77288]]

basis.\14\ They contend that frequently a customer will be receiving 
multiple natural gas packages from a single seller (pursuant to 
different contracts) and the buyer and the seller have diametrically 
opposed interests. The seller wants the most expensive gas to have the 
highest rank, while the buyer seeks to give it the lowest. The End 
Users contend that unless the confirmation process provides information 
as to which package actually flows, the shipper cannot accurately 
determine the package for which it must pay.
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    \14\ The GISB standards define a package identifier as ``a way 
to differentiate between discrete business transactions.'' 
Nominations Related Standards 1.2.5, 18 CFR 284.12(b)(i).
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    The producers (NGSA and IPAA) support a confirmation standard that 
would require pipelines to confirm with producers or their agents, 
rather than the standard discussed at GISB that would have required 
confirmation with all working interest owners. They contend that 
confirming with producers will enhance efficiency by eliminating the 
inefficiency of routing all adjustments through a point operator, as is 
done today. They also maintain that confirmation with producers will 
better safeguard commercially sensitive information, because producers 
will no longer have to route their sensitive nomination information 
through point operators that may have competing financial or business 
interests. NGSA maintains that confirmation with producers or their 
agents would be far less burdensome than confirmation with working 
interest owners.
    While the pipelines generally support the cross-contract ranking 
standards proposed by the Commission, they contend the Commission 
should not require pipelines to provide the supplemental contractual 
information requested by the LDCs or new standards for producer 
confirmation.\15\ They maintain that requiring supplemental information 
will unnecessarily complicate the confirmation process and the LDCs 
have not established the need for such information. Enron, for example, 
contends that the entity-to-entity confirmation standard will help to 
streamline the confirmation process, but that requiring the provision 
of supplemental information will defeat the very purpose of attempting 
to streamline the process. Williston Basin maintains that it 
understands only a few LDCs seek this supplemental information in order 
to appease state regulatory authorities and that none of the LDCs on 
its system require the provision of such information. The pipelines 
also contend that they are not all in position to confirm gas supplies 
with individual working interest owners.
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    \15\ See Comments by INGAA, Enron, ANR, Columbia Gulf, Kinder 
Morgan, Koch, Panhandle, Williams, Williston Basin.
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3. Establishment of a Technical Conference
    All of the commenters find that development of standards for cross-
contract ranking could benefit the industry by giving shippers more 
flexibility in using their capacity. It also appears from the comments 
that since the standards were debated at GISB, some industry members 
have clarified or revised their proposals or put forward new proposals. 
In addition, some of the comments appear to go beyond the limited issue 
of cross-ranking, but link the cross-contract ranking issue with other 
issues relating to standardization of the confirmation process.
    Given the issues raised and the new proposals included in some of 
the comments, the Commission needs additional information to determine 
how best to proceed. It is, therefore, directing staff to convene a 
technical conference in which the industry and staff can discuss these 
issues to clarify what is in dispute and to determine if common ground 
can be found. The technical conference will be transcribed so that the 
Commission and those who cannot attend can be apprised of the 
discussion. Staff also will establish a schedule for further comments 
to be filed based on the discussion at the technical conference.
    Among the issues that should be considered at the conference are:
    <bullet> How confirmation takes place using entity-to-entity 
confirmation and contract confirmation.
    <bullet> How package identification currently is used in nomination 
and confirmation processes.
    <bullet> How the issues relating to cross-contract ranking differ 
depending on the nomination model used by the pipeline, i.e, pathed, 
non-pathed, or pathed non-threaded.
    <bullet> Whether cross-contract ranking can be achieved efficiently 
without entity-to-entity confirmation.
    <bullet> Whether verification of a shipper's contractual priority 
needs to occur on a daily basis through the confirmation process or 
whether priority can be verified in other ways, for example, by 
examining the shipper's contract or using the Index of Customers.
    <bullet> Whether a uniform resolution of the need for supplemental 
information is needed or whether this issue can be resolved on a case-
by-case basis, for example, by requiring those pipelines that 
previously provided contract information to continue that practice, 
while not imposing additional burdens on other pipelines.
    <bullet> Whether, if confirmation of transportation priority is 
needed, a priority indicator, as Distribution suggests, would be a 
reasonably burden-free method of transmitting the information.
    <bullet> Whether entity-to-entity confirmation has value in 
simplifying the confirmation process or whether further disaggregation 
to the gas package identification level is necessary.
    <bullet> Whether gas package identification would protect customers 
against the possibility that the seller will allocate all gas supplies 
to the highest price contract or whether such protection can be better 
achieved through the contract between buyer and seller. For instance, 
even if confirmation was at the package identification level, the 
seller would still rank the most expensive package first.
    <bullet> Whether the proposal to limit confirmations to producers, 
rather than working interest owners, meaningfully reduces the 
confirmation burden.
    <bullet> Whether producers can use independent third-parties, as 
opposed to commercially interested point operators, to handle the 
confirmation process with respect to that information considered the 
most sensitive.

III. Notice of Use of Voluntary Consensus Standards

    Office of Management and Budget Circular A-119 (Sec. 11) (February 
10, 1998) provides that federal agencies should publish a request for 
comment in a Final Rule when the agency is seeking to issue or revise a 
regulation that contains a standard identifying whether a voluntary 
consensus standard or a government-unique standard is being proposed. 
In this final rule, the Commission is incorporating by reference 
Version 1.4 (August 31 and November 15, 1999 ) of the voluntary 
consensus standards developed by GISB.

IV. Information Collection Statement

    OMB's regulations in 5 CFR 1320.11 require that it approve certain 
reporting and recordkeeping requirements (collections of information) 
imposed by an agency. Upon approval of a collection of information, OMB 
shall assign an OMB control number and an expiration date. Respondents 
subject to the filing requirements of this Rule shall not be penalized 
for failing to respond to these collections of information unless the 
collections of information display valid OMB control numbers.

[[Page 77289]]

    The collections of information related to this Final Rule fall 
under the existing reporting requirements of: FERC-545, Gas Pipeline 
Rates: Rate Change (Non-Formal) (OMB Control No. 1902-0154) and FERC-
549C, Standards for Business Practices of Interstate Natural Gas 
Pipelines (OMB Control No. 1902-0174). The following burden estimates 
are related only to this rule and include the costs of complying with 
GISB's version 1.4 standards. The burden estimates are primarily 
related to start-up for implementing the latest version of the 
standards and data sets and will not be on-going costs.
    Public Reporting Burden: (Estimated Annual Burden)

----------------------------------------------------------------------------------------------------------------
                                                                     Number of       Estimated
                 Data collection                     Number of     responses per   burden hours    Total annual
                                                    respondents     respondent     per response        hours
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FERC-545........................................              93               1              38           3,534
FERC-549C.......................................              93               1           1,766         164,238
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    The total annual hours for collection (including recordkeeping) are 
estimated to be 167,772. The average annualized cost for all 93 
respondents is projected to be the following:

------------------------------------------------------------------------
                                             FERC-545        FERC-549C
------------------------------------------------------------------------
Annualized Capital/ Startup Costs.......        $195,996      $9,108,655
Annualized Costs (Operations &                         0               0
 Maintenance)...........................
                                         -------------------------------
    Total Annualized Costs..............         195,996       9,108,655
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    In the Notice of Proposed Rulemaking (NOPR), the Commission 
proposed to adopt a regulation requiring pipelines to permit cross-
contract ranking. However, this rule does not adopt that proposed 
regulation but instead directs staff to convene a technical conference 
to discuss whether to adopt the proposed regulation. For this reason, 
the burden estimates have been adjusted to remove the burden included 
in the NOPR for complying with the Commission's proposed regulation 
requiring pipelines to permit cross-contract ranking. The burden 
estimate for FERC-545 is unchanged because the exclusion of cross-
contract ranking will not create a significant difference in the 
original burden estimate for tariff filings. However, the burden 
estimate for FERC-549C has been reduced to eliminate the burden 
estimate associated with the cross-contract ranking proposal in the 
NOPR.
    The Commission regulations adopted in this rule are necessary to 
further the process begun in Order No. 587 of creating a more efficient 
and integrated pipeline grid by standardizing the business practices 
and electronic communications of interstate pipelines. Adoption of 
these regulations will update the Commission's regulations relating to 
business practices and communication protocols to conform to the latest 
version, Version 1.4, approved by GISB.
    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. The information required 
in this Final Rule will be reported directly to the industry users and 
later be subject to audit by the Commission. This information also will 
be retained for a three year period. The implementation of these data 
requirements will help the Commission carry out its responsibilities 
under the Natural Gas Act and conforms to the Commission's plan for 
efficient information collection, communication, and management within 
the natural gas industry.
    Interested persons may obtain information on the reporting 
requirements by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street, N.E., Washington, D.C. 20426 [Attention: 
Michael Miller, Office of the Chief Information Officer, phone 
(202)208-1415, fax (202)208-2425, E-mail <a href="/cdn-cgi/l/email-protection#9ef3f7f5fbb0f3f7f2f2fbecdef8fbecfdb0f8fbfab0ebed"><span class="__cf_email__" data-cfemail="97fafefcf2b9fafefbfbf2e5d7f1f2e5f4b9f1f2f3b9e2e4">[email protected]</span></a>]; or 
the Office of Management and Budget [Attention: Desk Officer for the 
Federal Energy Regulatory Commission, phone 202-395-3087, fax (202)395-
7285].

V. Environmental Analysis

    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.\16\ The Commission 
has categorically excluded certain actions from these requirements as 
not having a significant effect on the human environment.\17\ The 
actions taken 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.\18\ Therefore, an environmental assessment 
is unnecessary and has not been prepared in this final rule.
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    \16\ Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & 
Regs. Preambles 1986-1990 para. 30,783 (1987).
    \17\ 18 CFR 380.4
    \18\ See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), 380.4(a)(27).
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VI. Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act of 1980 (RFA)\19\ generally requires 
a description and analysis of final rules that will have significant 
economic impact on a substantial number of small entities. The 
regulations adopted here impose requirements only on interstate 
pipelines, which are not small businesses, and, these requirements are, 
in fact, designed to reduce the difficulty of dealing with pipelines by 
all customers, including small businesses. Accordingly, pursuant to 
Sec. 605(b) of the RFA, the Commission hereby certifies that the 
regulations proposed herein will not have a significant adverse impact 
on a substantial number of small entities.
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    \19\ 5 U.S.C. 601-612.
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VII. Document Availability

    In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through FERC's Home Page (http://www.ferc.fed.us) and in 
FERC's Public Reference Room during normal business hours (8:30 a.m. to 
5 p.m. Eastern time) at 888 First Street, N.E., Room 2A, Washington, DC 
20426.

[[Page 77290]]

    From FERC's Home Page on the Internet, this information is 
available in both the Commission Issuance Posting System (CIPS) and the 
Records and Information Management System (RIMS).
--CIPS provides access to the texts of formal documents issued by the 
Commission since November 14, 1994.
--CIPS can be accessed using the CIPS link or the Energy Information 
Online icon. The full text of this document is available on CIPS in 
ASCII and WordPerfect 8.0 format for viewing, printing, and/or 
downloading.
--RIMS contains images of documents submitted to and issued by the 
Commission after November 16, 1981. Documents from November 1995 to the 
present can be viewed and printed from FERC's Home Page using the RIMS 
link or the Energy Information Online icon. Descriptions of documents 
back to November 16, 1981, are also available from RIMS-on-the-Web; 
requests for copies of these and other older documents should be 
submitted to the Public Reference Room.

    User assistance is available for RIMS, CIPS, and the Website during 
normal business hours from our Help line at (202) 208-2222 (E-Mail to 
<a href="/cdn-cgi/l/email-protection#2e794b4c634f5d5a4b5c6e484b5c4d00484b4a005b5d"><span class="__cf_email__" data-cfemail="b5e2d0d7f8d4c6c1d0c7f5d3d0c7d69bd3d0d19bc0c6">[email protected]</span></a>) or the Public Reference Room at (202) 208-1371 
(E-Mail to <a href="/cdn-cgi/l/email-protection#205055424c49430e5245464552454e4345524f4f4d60464552430e4645440e5553"><span class="__cf_email__" data-cfemail="374742555b5e54194552515245525954524558585a775152455419515253194244">[email protected]</span></a>).
    During normal business hours, documents can also be viewed and/or 
printed in FERC's Public Reference Room, where RIMS, CIPS, and the FERC 
Website are available. User assistance is also available.

VIII. Implementation Date

    Pipelines must implement these regulations on May 1, 2001. 
Pipelines must file revised tariff sheets to incorporate Version 1.4 of 
the standards into their tariffs since their tariffs incorporated by 
reference an older version number.\20\ To the extent pipelines have 
individual tariff provisions based on these standards, pipelines also 
will have to conform their tariffs to the new standards.\21\ The tariff 
changes must be filed not less than 30 days prior to the date for 
implementing Version 1.4 of the standards.
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    \20\ See Texas Eastern Transmission Corporation, 77 FERC para. 
61,175, at 61,646 (1996) (pipelines incorporating standards by 
reference in their tariffs must include number and version).
    \21\ In filing to implement Version 1.4, pipelines need to 
change all references to GISB standards in their tariffs to Version 
1.4. The version number applies to all standards contained in GISB's 
Version 1.4 Standards Manuals, including standards that have not 
changed from prior versions.
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IX. Effective Date

    These regulations are effective January 10, 2001. The Commission 
has determined, with the concurrence of the Administrator of the Office 
of Information and Regulatory Affairs of OMB, that this rule is not a 
``major rule'' as defined in Section 351 of the Small Business 
Regulatory Enforcement Fairness Act of 1996.

List of Subjects in 18 CFR Part 284

    Continental shelf, Incorporation by reference, Natural gas, 
Reporting and recordkeeping requirements.
    By the Commission.

David P. Boergers,
Secretary.

    In consideration of the foregoing, the Commission proposes to amend 
Part 284, Chapter I, Title 18, Code of Federal Regulations, as set 
forth below.

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. 7101-7532; 
43 U.S.C. 1331-1356.
    2. In Sec. 284.12


    a. Paragraphs (b)(1)(i) through (v) are revised to read as set 
forth below.
    b. In paragraph (b)(2), remove the words ``1100 Louisiana, Suite 
4925'' and add, in their place, the words ``1100 Louisiana, Suite 
3625''.


Sec. 284.12  Standards for pipeline business operations and 
communications.

* * * * *
    (b) * * *
    (1) * * *
    (i) Nominations Related Standards (Version 1.4, August 31, 1999);
    (ii) Flowing Gas Related Standards (Version 1.4, August 31, 1999) 
with the exception of Standards 2.3.29 and 2.3.30;
    (iii) Invoicing Related Standards (Version 1.4, August 31, 1999);
    (iv) Electronic Delivery Mechanism Related Standards (Version 1.4, 
November 15, 1999) with the exception of Standard 4.3.4; and
    (v) Capacity Release Related Standards (Version 1.4, August 31, 
1999).
* * * * *

    Note: The following Appendices will not appear in the Code of 
Federal Regulations

Appendix A

                  Comments Filed--Docket No. RM96-1-015
------------------------------------------------------------------------
              Commenter                           Abbreviation
------------------------------------------------------------------------
Altra Energy Technologies, Inc.......  Altra
American Gas Association.............  AGA
ANR Pipeline Company and Colorado      ANR
 Interstate Gas Company.
Cincinnati Gas & Electric Company,     Cincinnati
 Union Light, Heat and Power Company,
 and Lawrenceburg Gas Company.
Columbia Gulf Transmission Company...  Columbia Gulf
Consolidated Edison Company of New     Con Edison
 York, Inc. and Orange and Rockland
 Utilities, Inc.
Duke Energy Gas Transmission           Duke
 (Algonquin Gas Transmission Duke
 Company, East Tennessee Natural Gas
 Company, and Texas Eastern
 Transmission Corporation).
Dynegy Marketing and Trade...........  Dynegy
El Paso Energy Corporation Interstate  El Paso Energy
 Pipelines (El Paso Natural Gas
 Company, Gulf States Transmission
 Corporation, Midwestern Gas
 Transmission Company, Mojave
 Pipeline Company, Southern Natural
 Gas Company, and Tennessee Gas
 Pipeline Company).
End User Group (Arizona Public         End User Group
 Service Company, The Boeing Company,
 Defense Energy Support Center,
 Midland Cogeneration Venture Limited
 Partnership, Midwest Energy, Inc.,
 Salt River Project, Phelps Dodge
 Corporation, and Tennessee Valley
 Authority).
Enron Interstate Pipelines...........  Enron

[[Page 77291]]

 
Independent Petroleum Association of   IPAA
 America.
Interstate Natural Gas Association of  INGAA
 America.
Kinder Morgan Interstate Pipelines     Kinder Morgan
 (Natural Gas Pipeline Company of
 America and Kinder Morgan Interstate
 Gas Transmission LLC).
Koch Gateway Pipeline Company........  Koch
National Fuel Gas Distribution         Distribution
 Corporation.
Natural Gas Supply Association.......  NGSA
Panhandle Eastern Pipe Line Company    Panhandle
 and Trunkline Gas Company.
Williams Gas Pipeline Company          Williams
 (Transcontinental Gas Pipe Line
 Corporation, Texas Gas Transmission
 Corporation, Williams Gas Pipelines
 Central, Inc., Northwest Pipeline
 Corporation, Cove Point LNG Limited
 Partnership, and Kern River Gas
 Transmission Company).
Williston Basin Interstate Pipeline    Williston Basin
 Company.
------------------------------------------------------------------------

Appendix B

Cross-Contract Ranking Standards GISB Considered, But Did Not Adopt

Standards Considered at the November 11, 1999 GISB Executive 
Committee Meeting

CXKR-1

S1  Proposed Standard 1

    Absent mutual agreement to the contrary, the standard level of 
confirmation should be entity to entity.

S2  Revised Proposed Standard 2

    As part of the confirmation and scheduling process between a 
Transportation Service Provider (TSP) and a Local Distribution 
Company (LDC), upon request by the LDC, the TSP should make 
available, via EBB/EDM, supplemental information obtained during or 
derived from the nomination process necessary for the LDC to meet 
its statutory and/or regulatory obligations. Such supplemental 
information, if available, should include the TSP's Service 
Requester Contract and, based upon the TSP's business practice may 
also, on a mutually agreeable basis, include (1) a derivable 
indicator characterizing the type of contract and service being 
provided, (2) Downstream Contract Identifier and/or (3) Service 
Requester's Package ID .

S3  Proposed Standard 3

    Absent mutual agreement to the contrary between the TSP and the 
Operator for confirmations at a production location, the TSP should 
support the fact that the operator will confirm with the TSP to only 
the upstream entity level. These upstream entities should either 
confirm or nominate (at the TSP's determination) at an entity level 
with the TSP.

D1  Proposed Definition 1

    Production locations includes wellheads, platforms, plant 
tailgates (excluding straddle plants) and physical wellhead 
aggregation points.

S4  Proposed Standard 4

    When nominated quantities exceed available capacity, the 
Transportation Service Provider (TSP) should first utilize its 
tariff requirements to assign capacity to each service level for 
each Service Requester (SR). The TSP should then use the SR's 
provided scheduling ranks to determine how the available quantities 
should be distributed within a single service level. The SR's 
provided scheduling ranks (as applicable) should be used as follows:
    For reductions identified at or upstream of the constraint 
location, the order for application of ranks is Receipt Rank 
(Priority), Upstream Rank (Priority), Delivery Rank (Priority), 
Downstream Rank (Priority).
    For reductions identified at or downstream of the constraint 
location, the order for application of ranks is Delivery Rank 
(Priority), Downstream Rank (Priority), Receipt Rank (Priority), 
Upstream Rank (Priority).

S5  Proposed Standard 5

    When applying a confirmation reduction to an entity at a 
location, the Transportation Service Provider (TSP) should use the 
Service Requester's (SR's) scheduling ranks provided on all 
nominations for that location and entity to determine the 
appropriate nomination(s) to be reduced, except where superseded by 
the TSP's tariff, general terms and conditions, or contractual 
obligations. The SR's provided scheduling ranks (as applicable) 
should be used as follows:
    For receipt side reductions, the order for application of ranks 
is Upstream Rank (Priority), Receipt Rank (Priority), Delivery Rank 
(Priority), and Downstream Rank (Priority).
    For delivery side reductions, the order for application of ranks 
is Downstream Rank (Priority), Delivery Rank (Priority), Receipt 
Rank (Priority), and Upstream Rank (Priority).

P1  Proposed Principle 1

    In order to effectuate cross contract ranking, the level of 
confirmation at a location should occur at the entity to entity 
level.

S6  Revised Proposed Standard 6

    Transportation Service Providers should utilize Standard 1.3.7 
for ranks submitted in a nomination.

CXKR-2

    Retain all standards in CXKR-1 with the exception of Standard S2 
which would be revised to read as follows:

S2  Amended Revised Proposed Standard 2

    As part of the confirmation and scheduling process upon request, 
the TSP should make available, via EBB/EDM, supplemental information 
obtained during or derived from the nomination process. Such 
supplemental information, if available, should include the TSP's 
Service Requester Contract and, based upon the TSP's business 
practice may also, on a mutually agreeable basis, include (1) a 
derivable indicator characterizing the type of contract and service 
being provided, (2) Downstream Contract Identifier and/or (3) 
Service Requester's Package ID.

CXKR-3

P1  New Principle

    In order to effectuate cross contract ranking, the level of 
confirmation at a location should occur at the entity-to-entity 
level.

S1  New Standard

    The standard level of confirmation should be entity to entity.

S4  New Standard

    When nominated quantities exceed available capacity on a 
Transportation Service Provider's (TSP's) system, such TSP should 
first utilize its tariff requirements to assign capacity to each 
service level for each Service Requester (SR). The TSP should then 
use the SR's provided scheduling ranks as provided in the SR's 
nomination to determine how the available quantities should be 
distributed within a single service level.
    The SR's provided scheduling ranks (as applicable) should be 
used as follows:
    For reductions identified at or upstream of the constraint 
location, the order for application of ranks is Receipt Rank 
(Priority), Upstream Rank (Priority), Delivery Rank (Priority), 
Downstream Rank (Priority).
    For reductions identified at or downstream of the constraint 
location, the order for application of ranks is Delivery Rank 
(Priority), Downstream Rank (Priority), Receipt Rank (Priority), 
Upstream Rank (Priority).

S5  New Standard

    When applying a confirmation reduction to an entity (Service 
Requester (SR)) at a location, the Transportation Service Provider 
(TSP) should use such SR's scheduling ranks as provided on that SR's 
nominations at that location to determine the appropriate 
nominations(s) to be reduced, except where superceded by the TSP's 
tariff, general terms and conditions, or contractual obligations.

[[Page 77292]]

    The SR's provided scheduling ranks (as applicable) should be 
used as follows:
    For receipt side reductions, the order for application of ranks 
is Upstream Rank (Priority), Receipt Rank (Priority), Delivery Rank 
(Priority), Downstream Rank (Priority).
    For delivery side reductions, the order for application of ranks 
is Downstream Rank (Priority), Delivery Rank (Priority), Receipt 
Rank (Priority), Upstream Rank (Priority).

[FR Doc. 00-30979 Filed 12-8-00; 8:45 am]
BILLING CODE 6717-01-P


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