83 FR 62242 - Standards for Business Practices of Interstate Natural Gas Pipelines

DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission

Federal Register Volume 83, Issue 232 (December 3, 2018)

Page Range62242-62249
FR Document2018-26158

The Federal Energy Regulatory Commission is amending its regulations to incorporate by reference, with certain enumerated exceptions, the latest version (Version 3.1) of business practice standards adopted by the Wholesale Gas Quadrant of the North American Energy Standards Board (NAESB) applicable to natural gas pipelines in place of the currently incorporated version (Version 3.0) of those business practice standards. The revisions made by NAESB in this version of the standards are designed to clarify the processing of certain business transactions.

Federal Register, Volume 83 Issue 232 (Monday, December 3, 2018)
[Federal Register Volume 83, Number 232 (Monday, December 3, 2018)]
[Rules and Regulations]
[Pages 62242-62249]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-26158]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 284

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


Standards for Business Practices of Interstate Natural Gas 
Pipelines

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission is amending its 
regulations to incorporate by reference, with certain enumerated 
exceptions, the latest version (Version 3.1) of business practice 
standards adopted by the Wholesale Gas Quadrant of the North American 
Energy Standards Board (NAESB) applicable to natural gas pipelines in 
place of the currently incorporated version (Version 3.0) of those 
business practice standards. The revisions made by NAESB in this 
version of the standards are designed to clarify the processing of 
certain business transactions.

DATES: This rule will become effective February 1, 2019. Compliance 
filings required by this rule are due on April 1, 2019 and compliance 
with the standards incorporated in this rule is required on and after 
August 1, 2019. The incorporation by reference of certain publications 
listed in this rule is approved by the Director of the Federal Register 
as of February 1, 2019.

FOR FURTHER INFORMATION CONTACT: 
    Stanley Wolf (technical issues), Office of Energy Policy and 
Innovation, Federal Energy Regulatory Commission, 888 First Street NE, 
Washington, DC 20426, (202) 502-6841, [email protected].
    Oscar F. Santillana (technical issues), Office of Energy Market 
Regulation, Federal Energy Regulatory Commission, 888 First Street NE, 
Washington, DC 20426, (202) 502-6392, [email protected].
    Gary D. Cohen (legal issues), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street NE, Washington, 
DC 20426, (202) 502-8321, [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background........................................                  7
II. Discussion.......................................                 11
    A. The NAESB WGQ Version 3.1 Business Practice                    11
     Standards.......................................
    B. NAESB's Process...............................                 20
    C. Adoption of Version 3.1 of the Standards......                 21
    D. Required Compliance Filings...................                 23
III. Implementation Schedule.........................                 24
IV. Notice of Use of Voluntary Consensus Standards...                 26
V. Incorporation by Reference........................                 27
VI. Information Collection Statement.................                 38
VII. Environmental Analysis..........................                 43
VIII. Regulatory Flexibility Act.....................                 44
IX. Document Availability............................                 47
X. Effective Date and Congressional Notification.....                 50
 


    1. In this Final Rule, the Federal Energy Regulatory Commission 
(Commission) amends its regulations at 18 CFR 284.12 to incorporate by 
reference, with certain enumerated exceptions, the latest version 
(Version 3.1) of business practice standards applicable to interstate 
natural gas pipelines adopted by the Wholesale Gas Quadrant (WGQ) of 
the North American Energy Standards Board (NAESB) in place of the 
currently incorporated version (Version 3.0) of those business practice 
standards. Under this Final Rule, interstate natural gas pipelines are 
required to file compliance filings with the Commission by April 1, 
2019 and are required to comply with the standards incorporated by 
reference in this rule on and after August 1, 2019.
    2. The implementation of these standards and regulations will 
promote additional efficiency and reliability of the natural gas 
industries' operations thereby helping the Commission to carry out its 
responsibilities under the Natural Gas Act (NGA).\1\
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    \1\ 15 U.S.C. 717 (2012).
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    3. The NAESB WGQ Version 3.1 package of standards contains a number 
of revisions to the NAESB Version 3.0 package of standards. As 
explained further below, NAESB adopted two substantive revisions to its 
Nominations Related Standards, one to establish a standard rounding 
process for elapsed-prorated-scheduled quantity calculations and a 
second to revise the specifications for the information to be included 
in a nomination request.
    4. NAESB also adopted three minor revisions to the WGQ Electronic 
Delivery Mechanism (EDM) Related Standards. First, it has increased the 
allowable field length in ASCII Comma Separated Value Files to 3000 
characters. Second, NAESB adopted new Standard 4.3.106 to allow 
checkboxes and radio buttons in the Transmission Service Providers' 
(TSP) Electronic Bulletin Boards (EBB). Third, NAESB modified its 
standards to update the operating systems and web browsers that 
entities should support on behalf of users. Additionally, clarifying 
language was added to the Secure Sockets Layer (SSL)/Transport Layer 
Security (TLS) protocols.
    5. Other changes adopted by NAESB included changes to the NAESB WGQ 
data sets and other technical implementation documentation as well as 
revisions to the Flowing Gas Related data sets and technical 
implementation. In addition, NAESB revised the Imbalance Trade data set 
and revised two Sender's Option data elements. NAESB also adopted 
revisions to the Capacity Release Related data sets and technical 
implementation and revised Standard 6.3.1 (i.e., the NAESB Base 
Contract for Sale and Purchase of Natural Gas) to add language 
directing users to NAESB's copyright disclaimer posted on the NAESB 
website. Identical language was added to three additional NAESB WGQ 
Contracts.
    6. Lastly, NAESB adopted modifications to add a self-identification 
provision that assists end

[[Page 62243]]

users in determining whether counterparties are commercial market 
participants as defined by the United States Commodity Futures Trading 
Commission.

I. Background

    7. Since 1996, the Commission has adopted regulations to 
standardize the business practices and communication methodologies of 
interstate natural gas pipelines to create a more integrated and 
efficient pipeline grid. These regulations have been promulgated in the 
Order No. 587 series of orders,\2\ wherein the Commission has 
incorporated by reference standards for interstate natural gas pipeline 
business practices and electronic communications that were developed 
and adopted by NAESB's WGQ. Upon incorporation by reference, this 
version of these standards will become part of the Commission's 
regulations and compliance by interstate natural gas pipelines will 
become mandatory and will replace the earlier version of these 
standards that the Commission previously incorporated by reference in 
2015.\3\
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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) 
(cross-referenced at 76 FERC ] 61,042).
    \3\ Standards for Business Practices of Interstate Natural Gas 
Pipelines, Order No. 587-W, FERC Stats. & Regs. ] 31,373 (2015) 
(Order No. 587-W) (cross-referenced at 153 FERC ] 61,061).
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    8. On September 29, 2017, NAESB filed a report informing the 
Commission that it had adopted and ratified WGQ Version 3.1 of its 
business practice standards applicable to natural gas pipelines. The 
NAESB report identifies all the changes made to the Version 3.0 
Standards and summarizes the deliberations that led to the changes. It 
also identifies changes to the existing standards that were considered 
but not adopted due to a lack of consensus or other reasons.
    9. On August 21, 2018, the Commission issued a Notice of Proposed 
Rulemaking proposing to amend its regulations to incorporate by 
reference, with certain enumerated exceptions, the NAESB WGQ Version 
3.1 business practice standards (referenced above) applicable to 
natural gas pipelines.\4\
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    \4\ Standards for Business Practices of Interstate Natural Gas 
Pipelines, Notice of Proposed Rulemaking, 83 FR 44521 (Aug. 31, 
2018), FERC Stats. & Regs. ] 32,728 (2018) (Version 3.1 NOPR).
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    10. In response to the Version 3.1 NOPR, Tennessee Valley Authority 
(TVA) and the Interstate Natural Gas Association of America (INGAA) 
filed comments. TVA expresses support for the Commission's proposal to 
incorporate by reference NAESB's WGQ Version 3.1 business practice 
standards. INGAA also supports the Commission's proposal in the Version 
3.1 NOPR, but urges the Commission to ensure that implementation of a 
Final Rule in this proceeding does not occur prior to April 1, 2019, 
after the winter heating season. INGAA states that implementation of a 
Final Rule in this proceeding will require substantial time and effort 
from both pipelines and their customers to alter business systems, 
scheduling, and coordination processes and, thus, it would be best to 
schedule implementation to not occur during the winter heating season.

II. Discussion

A. The NAESB WGQ Version 3.1 Business Practice Standards

    11. The NAESB WGQ Version 3.1 Business Practice Standards made a 
number of modifications to the earlier version of those standards that 
the Commission previously incorporated by reference in 2015 in Order 
No. 587-W.\5\ Notable among these modifications \6\ were two 
substantive revisions concerning the Nominations Related Standards, 
which govern shipper requests to schedule service on natural gas 
pipelines. One revision adds a new provision, Standard 1.3.82, to 
establish a standard rounding process (requiring calculations to at 
least the seventh decimal place) for elapsed-prorated-scheduled 
quantity \7\ calculations to provide for needed numerical uniformity 
and granularity for users of these NAESB procedures. The other 
Nominations Related Standards revision was to revise the ``Service 
Requester'' element of Standard 1.3.27,\8\ which specifies some of the 
information that should be included in a nomination request, from a 
Mandatory designation to a Business Conditional \9\ designation. Thus, 
instead of forcing a specific upstream or downstream (unthreaded) 
nomination \10\ to be tied to a specific contract (using a specific 
threaded nomination), upstream nominations may now be distributed among 
several contracts (using a Pathed Non-Threaded nomination structure), 
which generally increases flexibility to customers.
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    \5\ Order No. 587-W, FERC Stats. & Regs. ] 31,373.
    \6\ An abbreviated description of these modifications is 
provided at PP 3-6 above.
    \7\ Standard 1.2.12 of the Nominations Related Standards defines 
the elapsed-prorated-scheduled quantity to mean:
    That portion of the scheduled quantity that would have 
theoretically flowed up to the effective time of the intraday 
nomination being confirmed, based upon a cumulative uniform hourly 
quantity for each nomination period affected.
    \8\ NAESB also made conforming revisions to the related data 
sets and documents: Standard 1.4.1 of the Nomination data set, 
Standard 1.4.5 of the Scheduled Quantity data set, Standard 2.4.4 of 
the Shipper Imbalance data set, Standard 1.4.2 of the Nomination 
Quick Response data set, Standard 2.4.1 of the Pre-Determined 
Allocation document, and Standard 2.4.3 of the Allocation document.
    \9\ Standard 1.2.2 of the Nominations Related Standards provides 
that a Business Conditional data element is one that is based on 
current variations in business practice.
    \10\ NAESB's Nomination Data Dictionary, WGQ Version 3.1, 
Standard 1.4.1, retains from the Version 3.0 standard the field for 
``Model Type Data'' that identifies which of three types of 
nomination structures is being used. These are: Pathed, Non-Pathed, 
and Pathed Non-Threaded. Having these three types of model type data 
allows specificity as to the details of the nomination. A pathed 
nomination uses one nomination line item to transact business and, 
therefore, has one transaction type. A non-pathed nomination uses 
two nomination line items to transact business and, therefore, has 
two transaction types. A pathed non-threaded nomination uses three 
nomination line items to transact business and, therefore, has three 
transaction types.
    NAESB also provides the following clarification of these 
concepts in the description of the technical implementation of 
business processes included as part of Standard 1.4.1, where NAESB 
explains that:
    [a] ``Pathed'' nomination is actually a ``Pathed Threaded'' 
nomination because (1) the physical path of the pipeline locations 
and service contract(s) is fully described in the nomination, and 
(2) the logical thread of a specific supplier entity to a specific 
market entity at specific pipeline locations for a specific quantity 
is also fully described. ``Non-Pathed'' nominations are actually 
``Non-Pathed Non-Threaded'' nominations because (1) physical 
``location-to-location'' paths are not described in the nominations, 
and (2) no ties of specific supply entities to specific market 
entities are established. And for ``Pathed Non-Threaded'' 
nominations, (1) the physical path of the pipeline locations, 
service contract(s), and quantity is fully described, and (2) no 
ties of specific supply entities to specific market entities are 
established. See NAESB WGQ Version 3.1 Business Practice Standards, 
Nominations Related Standards, Standard 1.4.1, at 87 (Sep. 29, 
2017).
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    12. NAESB also adopted three minor revisions to the WGQ EDM Related 
Standards, which establish the framework for the electronic 
dissemination and communication of information between parties in the 
North American Wholesale Gas marketplace. First, NAESB revised Standard 
4.3.80 to increase the allowable field length in ASCII Comma Separated 
Value Files to 3000 characters. The revision increases the amount of 
information that can be conveyed, but reasonably limits it in 
conformity with commonly used software such as Excel. Second, NAESB 
adopted new Standard 4.3.106 to allow checkboxes and radio buttons in 
the TSPs' EBBs to indicate ``Yes'' and/or ``No'' responses to data 
elements, which NAESB states is more convenient than the current drop 
down list. Third, NAESB revised its standards to update the operating 
systems and web browsers that entities should support to allow

[[Page 62244]]

users to take advantage of recent developments in computer technology 
and use. Additionally, language was added to clarify the SSL/TLS 
protocols, which encrypt data to hide information from electronic 
observers on the internet. The revised standard provides guidance on 
the timing for adoption of a new version of SSL/TLS protocols--new 
versions of these protocols should be used within 9 months of the 
version becoming generally available. In addition, the revised standard 
clarifies that SSL is a colloquial term that encompasses both SSL and 
TLS.
    13. Other changes adopted by NAESB included changes to the NAESB 
WGQ data sets and other technical implementation documentation, which 
provide the technical support necessary to use the NAESB standards 
effectively. One such change was to add a new Business Conditional data 
element ``Agent'' and corresponding technical implementation to the 
Nominations related Standard 1.4.1 and the Scheduled Quantity Standard 
1.4.5. Currently, in the data sets, the Service Requester is defined as 
the Shipper or its Agent; however, language included in the 
implementation guides states that both the Shipper and Agent will be 
identified. Thus, this change adds a data element ``Agent'' to the data 
sets to allow the Service Requestor to identify both the shipper and 
its agent if it uses an agent to nominate and schedule on the pipeline.
    14. NAESB also adopted revisions to the Flowing Gas Related data 
sets and technical implementation, which address quantitative issues 
relating generally to allocation, imbalances, and measurement of 
flowing gas. Specifically, NAESB added three Business Conditional data 
elements to the Authorization to Post Imbalances data set (Standard 
2.4.9). The addition of the three data elements will allow a Service 
Requester to authorize specific contracts and quantities of imbalances 
for specified periods of time to be posted.
    15. In addition, NAESB revised the Imbalance Trade data set 
(Standard 2.4.11) to reinstate language providing the confirming party 
the ability to reject a trade in the Imbalance Trade data set when an 
auto-confirm agreement with a confirming party is in place. NAESB 
states that in its WGQ Version 2.1 publication, before the Imbalance 
Trading data sets were consolidated, the Imbalance Trade Confirmation 
contained a Yes/No indicator that the confirming party could use to 
indicate its acceptance or rejection of the trade. This indicator 
informed a pipeline whether the confirming party agreed to the terms of 
the trade that the initiating trader had posted. When the data sets 
were consolidated, this data element was dropped because it was assumed 
that if a confirming party did not agree with the posted terms it would 
not confirm the trade, which was effective only if the pipeline did not 
have an auto-confirm agreement with that confirming party. Accordingly, 
to address situations where there are auto-confirm agreements, NAESB 
has now revised Standard 2.4.11 to add a new Business Conditional data 
element ``Imbalance Trade Response'' with an ``Accept/Reject'' code 
value. This Accept/Reject indicator informs the pipeline whether the 
confirming party agrees to the terms of the trade that the initiating 
trader had posted.
    16. NAESB also revised Standard 2.4.6 to add two Sender's Option 
data elements,\11\ ``Comments'' and ``Volume-Uncorrected'' to the 
Measured Volume Audit Statement \12\ in order to communicate raw data 
on volumes in addition to the final volumes, which are communicated 
through the existing data element ``Volume Corrected.'' Thus, users 
will now be able to indicate what initial data they received in 
addition to how that data was ultimately corrected, and to provide 
comments concerning that data, which relate to what meter was used to 
measure the data.
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    \11\ Nominations Related Standard 1.2.2 provides that Sender's 
Option means that this element is an option for the sender to send 
and, if sent, the receiver should store and use the contents of the 
data element.
    \12\ NAESB's business process and practices overview of the 
Flowing Gas Related Standards states that the Measured Volume Audit 
Statement data set is used to report gas measurement information in 
support of the allocation, imbalance, invoice and audit processes.
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    17. NAESB also adopted revisions to the Capacity Release Related 
data sets and technical implementation. Specifically, NAESB revised 
Standard 5.4.24 to add a new Business Conditional data element, ``Waive 
Bidder Credit Indicator'' and corresponding code values to the Offer 
data set. The additional data element indicates to a Bidder whether the 
Releasing Shipper will waive, pursuant to the TSP's tariff, the 
Bidder's creditworthiness pre-qualification.
    18. Further, NAESB revised Standard 6.3.1 (i.e., the NAESB Base 
Contract for Sale and Purchase of Natural Gas) to add language to the 
disclaimer to provide a copyright notification and direct the reader to 
the NAESB Copyright Policy and Companies with Access to NAESB Standards 
under the Copyright Policy posted on the NAESB website. Identical 
language was added to three additional NAESB WGQ Contracts.
    19. Lastly, NAESB adopted modifications to the cover page of 
Standard 6.3.1 to add a self-identification provision that assists end 
users in determining whether counterparties are commercial market 
participants as defined by the United States Commodity Futures Trading 
Commission.

B. NAESB's Process

    20. NAESB used its consensus procedures to develop and approve the 
Version 3.1 Standards. As the Commission found in Order No. 587, the 
adoption of consensus standards is appropriate, because the consensus 
process helps ensure the reasonableness of the standards by requiring 
that the standards draw support from a broad spectrum of industry 
participants representing all segments of the industry. Moreover, since 
the industry itself must conduct business under these standards, the 
Commission's regulations should reflect those standards that have the 
widest possible support. In section 12(d) of the National Technology 
Transfer and Advancement Act of 1995 (NTT&AA),\13\ Congress 
affirmatively requires federal agencies to use technical standards 
developed by voluntary consensus standards organizations, like NAESB, 
as means to carry out policy objectives or activities determined by the 
agencies unless an agency determines that the use of such standards 
would be inconsistent with applicable law or otherwise impractical.
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    \13\ Public Law 104-113, 12(d), 110 Stat. 775 (1996).
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C. Adoption of Version 3.1 of the Standards

    21. In the Version 3.1 NOPR, the Commission proposed to incorporate 
by reference, in its regulations, Version 3.1 of the NAESB WGQ 
consensus business practice standards, with the exception of NAESB's 
standards specifying the terms of optional model contracts and the 
eTariff-related standards.\14\ As explained above, all of the 
commenters supported the Commission's proposal to incorporate by 
reference the NAESB WGQ Version 3.1 business practice standards as 
proposed in the Version 3.1 NOPR.\15\
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    \14\ Version 3.1 NOPR, FERC Stats. & Regs. ] 32,728 at n.1 & 
P16.
    \15\ INGAA's suggestions for the implementation dates for the 
Final Rule are discussed separately in section III below.
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    22. After a review of the comments filed in response to the Version 
3.1 NOPR, the Commission amends Part 284 of its regulations to 
incorporate by

[[Page 62245]]

reference the NAESB WGQ Version 3.1 business practice standards, with 
the exceptions (as explained in the Version 3.1 NOPR) of the optional 
model contracts and the eTariff-related standards.

D. Required Compliance Filings

    23. To implement the standards we are incorporating by reference in 
this Final Rule, we will require each interstate natural gas pipeline 
to file a separate tariff record reflecting the changed standards by 
April 1, 2019, to take effect on August 1, 2019, and the natural gas 
pipelines will be required to comply with these standards on and after 
August 1, 2019.\16\
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    \16\ To aid in compliance, promptly after issuance of this Final 
Rule, the Commission will post a sample tariff record on the 
Commission's website that may be accessed at http://www.ferc.gov/docs-filing/elibrary.asp. All interstate natural gas pipelines are 
to file their tariff records in conformance with this sample tariff 
record.
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III. Implementation Schedule

    24. As suggested by INGAA, we have selected an implementation 
schedule for compliance with this Final Rule that delays implementation 
until after the winter heating period. We also observe that none of the 
comments took issue with the Commission's explanation of its policies 
on tariff filings and on waiver requests. Thus, we are not modifying 
these policies in this Final Rule and stand by the explanation of those 
policies we made in the Version 3.1 NOPR. The Commission will require 
interstate natural gas pipelines to comply with the revised NAESB 
standards that we are incorporating by reference in this Final Rule 
beginning on August 1, 2019. We are adopting this implementation 
schedule to give the interstate natural gas pipelines subject to these 
standards adequate time to implement these changes. In addition, the 
interstate natural gas pipelines must file tariff records to reflect 
the changed standards by April 1, 2019.
    25. In addition, consistent with the requirements in Order No. 587-
W,\17\ the Commission is including the following compliance filing 
requirements to increase the transparency of the pipelines' 
incorporation by reference of the NAESB WGQ Standards so that shippers 
and the Commission will know which tariff provision(s) implements each 
standard as well as the status of each standard.
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    \17\ Order No. 587-W, FERC Stats. & Regs. ]31,373 at P 42.
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    (1) The pipelines must designate a single tariff record under which 
every NAESB standard currently incorporated by reference by the 
Commission is listed.\18\ This section should be a separate tariff 
record under the Commission's electronic tariff filing requirement and 
should be filed electronically using the eTariff portal using the Type 
of Filing Code 580. The Commission will post on its eLibrary website 
(under Docket No. RM96-1-041) a sample tariff record, to provide filers 
an illustrative example to aid them in preparing their compliance 
filings; \19\
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    \18\ See supra n.14.
    \19\ Id.
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    (2) For each standard, each pipeline must specify in the tariff 
record a list of all the NAESB standards currently incorporated by 
reference by the Commission:
    (a) whether the standard is incorporated by reference;
    (b) for those standards not incorporated by reference, the tariff 
provision that complies with the standard; \20\ and
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    \20\ For example, pipelines are required to include the full 
text of the NAESB nomination and capacity release timeline standards 
(WGQ Standards 1.3.2(i-vi) and 5.3.2) in their tariffs. See, e.g., 
Standards for Business Practices of Interstate Natural Gas 
Pipelines, Order No. 587-U, FERC Stats. & Regs. ] 31,307, at P 39 & 
n.42 (2010). Each pipeline's submittal is to identify which tariff 
provision complies with each of these standards.
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    (c) a statement identifying any standards for which the pipeline 
has been granted a waiver, extension of time, or other variance with 
respect to compliance with the standard.\21\
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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 states the standard for which a waiver or extension of time 
was granted, and the docket number or order citation to the proceeding 
in which the waiver or extension of time was granted.

IV. Notice of Use of Voluntary Consensus Standards

    26. Office of Management and Budget (OMB) Circular A-119 (section 
11) (February 10, 1998) provides that federal agencies should publish a 
request for comment in a NOPR when the agency is seeking to issue or 
revise a regulation proposing to adopt a voluntary consensus standard 
or a government-unique standard. In this Final Rule, the Commission is 
amending its regulations to incorporate by reference voluntary 
consensus standards developed by NAESB's WGQ. In section 12(d) of 
NTT&AA, Congress affirmatively requires federal agencies to use 
technical standards developed by voluntary consensus standards 
organizations to carry out policy objectives or activities determined 
by the agencies unless use of such standards would be inconsistent with 
applicable law or otherwise impractical.\22\
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    \22\ Public Law 104-113, 12(d), 110 Stat. 775 (1996), 15 U.S.C. 
272 note (1997).
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V. Incorporation by Reference

    27. The Office of the Federal Register requires agencies 
incorporating material by reference in final rules to discuss, in the 
preamble of the final rule, the ways that the materials it incorporates 
by reference are reasonably available to interested parties and how 
interested parties can obtain the materials.\23\ The regulations also 
require agencies to summarize, in the preamble of the final rule, the 
material it incorporates by reference.
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    \23\ 1 CFR 51.5. See Incorporation by Reference, 79 FR 66267 
(Nov. 7, 2014).
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    28. The NAESB standards being incorporated by reference in this 
Final Rule consist of seven suites of NAESB WGQ Business Practice 
Standards that touch on a variety of topics and are designed to 
streamline the transactional processes for the wholesale gas industry 
by promoting a more competitive and efficient market. These include the 
WGQ Additional Business Practice Standards; WGQ Nominations Related 
Business Practice Standards; WGQ Flowing Gas Related Business Practice 
Standards; Invoicing Related Business Practice Standards; Quadrant EDM 
Related Business Practice Standards; Capacity Release Related Business 
Practice Standards; and internet Electronic Transport Related Business 
Practice Standards. These can be summarized as follows.
    29. The WGQ Additional Business Practice Standards address six 
areas: Creditworthiness, Storage Information, Gas/Electric Operational 
Communications, Operational Capacity, Unsubscribed Capacity, and 
Location Data Download.
     The Creditworthiness related standards describe 
requirements for the exchange of information, notification, and 
communication between parties during the creditworthiness evaluation 
process.
     The Storage Information related standards define the 
information to be provided to natural gas service requesters related to 
storage activities and/or balances.
     The Gas/Electric Operational Communications related 
standards define communication protocols intended to improve 
coordination

[[Page 62246]]

between the gas and electric industries in daily operational 
communications between transportation service providers and gas-fired 
power plants. The standards include requirements for communicating 
anticipated power generation fuel for the upcoming day as well as any 
operating problems that might hinder gas-fired power plants from 
receiving contractual gas quantities.
     The Operational Capacity related standards define 
requirements of the transportation service provider related to the 
reporting and requesting of a transportation service provider's 
operational capacity, total scheduled quantity, and operationally 
available capacity.
     The Unsubscribed Capacity related standards define 
requirements of the transportation service provider related to 
reporting and requesting a transportation service provider's available 
unsubscribed capacity.
     The Location Data Download related standards define 
requirements for the use of codes assigned by the transportation 
service provider for locations and common codes for parties 
communicating electronically.
    30. The WGQ Nominations Related Business Practice Standards define 
the process by which a natural gas service requester with a natural gas 
transportation contract nominates (or requests) service from a pipeline 
or a transportation service provider for the delivery of natural gas.
    31. The WGQ Flowing Gas Related Business Practice Standards define 
the business processes related to the communication of entitlement 
rights of flowing gas at a location, of the entitlement rights on a 
contractual basis, of the management of imbalances, and of the 
measurement and gas quality information of the actual flow of gas.
    32. The Invoicing Related Business Practice Standards define the 
process for the communication of charges for services rendered 
(Invoice), communication of details about funds rendered in payment for 
services rendered (Payment Remittance), and communication of the 
financial status of a customer's account (Statement of Account).
    33. The Quadrant Electronic Delivery Mechanism Related Business 
Practice Standards define the framework for the electronic 
dissemination and communication of information between parties in the 
North American wholesale gas marketplace for Electronic Data 
Interchange (EDI)/EDM transfers, batch flat file/EDM transfers, 
informational postings websites, EBB/EDM and interactive flat file/EDM.
    34. The Capacity Release Related Business Practice Standards define 
the business processes for communication of information related to the 
selling of all or any portion of a transmission service requester's 
contract rights.
    35. The Internet Electronic Transport Related Business Practice 
Standards define the implementation of various technologies necessary 
to communicate transactions and other electronic data using standard 
protocols for electronic commerce over the internet between trading 
partners.
    36. Our regulations provide that copies of the NAESB standards 
incorporated by reference may be obtained from NAESB, whose offices are 
located at 801 Travis Street, Suite 1675, Houston, TX 77002, Phone: 
(713) 356-0060. NAESB's website can be accessed at https://www.naesb.org//. Copies of the NAESB standards may be inspected at the 
Federal Energy Regulatory Commission, Public Reference and Files 
Maintenance Branch, 888 First Street NE, Washington, DC 20426, Phone: 
(202) 502-8371, http://www.ferc.gov.\24\
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    \24\ 18 CFR 284.12.
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    37. NAESB is a private, consensus standards developer that develops 
voluntary wholesale and retail standards related to the energy 
industry. The procedures utilized by NAESB make its standards 
reasonably available to those affected by the Commission 
regulations.\25\ Participants can join NAESB, for an annual membership 
cost of $7,000, which entitles them to full participation in NAESB and 
enables them to obtain these standards at no additional cost.\26\ Non-
members may obtain the Individual Standards Manual or Booklet for each 
of the seven manuals or booklets by email for $250 per manual or 
booklet, which in the case of these standards would total $1,750.\27\ 
Non-members also may obtain the complete set of Business Practice 
Standards on USB flash drive for $2,000. NAESB also provides a free 
electronic read-only version of the standards for a three business day 
period or, in the case of a regulatory comment period, through the end 
of the comment period.\28\ In addition, NAESB considers requests for 
waivers of the charges on a case-by-case basis based on need.
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    \25\ As a private, consensus standards developer, NAESB needs 
the funds obtained from its membership fees and sales of its 
Individual Standards Manual or Booklet to finance the organization. 
The parties affected by these Commission regulations generally are 
highly sophisticated and have the means to acquire the information 
they need to effectively participate in Commission proceedings.
    \26\ NAESB Membership Application, https://www.naesb.org/pdf4/naesbapp.pdf.
    \27\ NAESB Materials Order Form, https://www.naesb.org/pdf/ordrform.pdf.
    \28\ Procedures for non-members to evaluate work products before 
purchasing are available at https://www.naesb.org/misc/NAESB_Nonmember_Evaluation.pdf. See Incorporation by Reference, 79 
FR at 66271, n.51 & 53 (Nov. 7, 2014) (citing to NAESB's procedure 
of providing ``no-cost, no-print electronic access,'' NAESB Comment, 
at 1, available at http://www.regulations.gov/#!documentDetail;D=OFR-2013-0001-0023).
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VI. Information Collection Statement

    38. The collections of information for this Final Rule are being 
submitted to OMB for review under section 3507(d) of the Paperwork 
Reduction Act of 1995 \29\ and OMB's implementing regulations.\30\ OMB 
must approve information collection requirements imposed by agency 
rules. The burden estimates for this Final Rule are for one-time 
implementation of the information collection requirements of this Final 
Rule (including tariff filing, documentation of the process and 
procedures, and IT work), and ongoing burden.
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    \29\ 44 U.S.C. 3507(d).
    \30\ 5 CFR 1320.
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    39. The Commission solicited comments from the public on the 
Commission's need for this information, whether the information will 
have practical utility, the accuracy of the burden estimates, 
recommendations to enhance the quality, utility, and clarity of the 
information to be collected, and any suggested methods for minimizing 
respondents' burden, including the use of automated information 
techniques. No comments were filed raising any objections to the burden 
estimate presented in the Version 3.1 NOPR. Accordingly, we will use 
that same burden estimate in this Final Rule.
    40. The collections of information related to this Final Rule fall 
under FERC-545B (Gas Pipeline Rates: Rate Change (Non-Formal)) \31\ and 
FERC-549C (Standards for Business Practices of Interstate Natural Gas 
Pipelines).\32\ The following estimates of reporting burden are related 
only to this Final Rule and include the costs to pipelines to comply 
with the Commission's directives in this Final Rule. The burden 
estimates are primarily related to start-up to implement these 
standards and regulations and will not result in ongoing costs.
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    \31\ FERC-545B covers rate change filings made by natural gas 
pipelines, including tariff changes.
    \32\ FERC-549C covers Standards for Business Practices of 
Interstate Natural Gas Pipelines.

[[Page 62247]]



                                                                  RM96-1-041 Final Rule
                                         [Standards for business practices of interstate natural gas pipelines]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                   Number of     Annual number                                                                             Annual costs
                                  respondents    of responses    Total number      Average burden hr. per    Total annual burden hours &  per respondent
                                     \33\       per respondent   of responses             response              total annual cost \34\          ($)
                                           (1)             (2)     (1) * (2) =  (4)........................  (3) * (4) = (5)............       (5) * (1)
                                                                           (3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FERC-545B (one-time)..........             165               1             165  10 hrs.; $1,020............  1,650 hrs.; $168,000.......          $1,020
FERC-549C (one-time)..........             165               1             165  22 hrs.; $2,244............  3,630 hrs.; $370,260.......           2,244
                               -------------------------------------------------------------------------------------------------------------------------
    Total.....................  ..............  ..............             330  ...........................  5,280 hrs.; 538,560........  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

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

    \33\ The number of respondents is the number of entities in 
which a change in burden from the current standards to the proposed 
exists, not the total number of entities from the current or 
proposed standards that are applicable.
    \34\ The estimated hourly cost (salary plus benefits) provided 
in this section is based on the salary figures for May 2017 posted 
by the Bureau of Labor Statistics for the Utilities sector (Bureau 
of Labor Statistics, May 2017 National Industry-Specific 
Occupational Employment and Wage Estimates (May 2017), http://www.bls.gov/oes/current/naics2_22.htm#13-0000) and scaled to reflect 
benefits using the relative importance of employer costs in employee 
compensation from May 2017 (Bureau of Labor Statistics, May 2017 
National Industry-Specific Occupational Employment and Wage 
Estimates (May 2017), https://www.bls.gov/oes/current/naics2_22.htm). The hourly estimates for salary plus benefits are:
    Computer and Information Systems Manager (Occupation Code: 11-
3021), $96.51
    Electrical Engineer (Occupation Code: 17-2071), $66.90
    Legal (Occupation Code: 23-0000), $143.68
    The average hourly cost (salary plus benefits), weighting all of 
these skill sets evenly, is $102.36. The Commission rounds it to 
$102/hour.

FERC-545B: 1,650 hours / 3 = 550 hours/year over three years
FERC-549C: 3,630 hours / 3 = 1,210 hours/year over three years

    The number of responses is also averaged over three years (for both 
the FERC-545 and FERC-549C):

FERC-545B: 165 responses / 3 = 55 responses/year
FERC-549C: 165 responses / 3 = 55 responses/year

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

Year 1: 55 responses; 550 hours (FERC-545B); 1,210 hours (FERC-549C)
Year 2: 55 responses; 550 hours (FERC-545B); 1,210 hours (FERC-549C)
Year 3: 55 responses; 550 hours (FERC-545B); 1,210 hours (FERC-549C)

    41. OMB regulations require OMB to approve certain information 
collection requirements imposed by agency rule. The Commission is 
submitting notification of this Final Rule to OMB. These information 
collections are mandatory requirements.
    Title: FERC-545B,\35\ Gas Pipeline Rates: Rates Change (Non-
Formal); FERC-549C, Standards for Business Practices of Interstate 
Natural Gas Pipelines.
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    \35\ In the supporting statement for the NOPR, we submitted Gas 
Pipeline Rates: Rate Changes (Non-Formal) under the temporary 
information collection FERC-545B to ensure timely submission to OMB 
as another unrelated item was pending OMB review under FERC-545 (and 
only one item per collection can be pending at OMB). FERC-545B will 
also be used for the Final Rule in Docket No. RM96-1-041.
---------------------------------------------------------------------------

    Action: Proposed information collections.
    OMB Control Nos.: TBD (FERC-545B), 1902-0174 (FERC-549C).
    Respondents: Business or other for profit (e.g., Natural Gas 
Pipelines, applicable to only a few small businesses).
    Frequency of Responses: One-time implementation (related to 
business procedures, capital/start-up).
    Necessity of Information: The Commission has determined that the 
revisions the Commission makes in this Final Rule to its regulations 
specifically will upgrade the business practices and communication 
standards of natural gas pipelines by (1) updating the Nominations 
Related Standards to standardize a rounding process for the elapsed-
prorated-scheduled quantity calculation, and dictate that the ``Service 
Requester Contract'' data element signify business conditional 
nominations, rather than mandatory nominations, (2) updating the WGQ 
EDM Related Standards to make three minor revisions designed to add 
clarity, update the minimum technical characteristics to account for 
changes in technology since the previous version (Version 3.0) of the 
WGQ standards, and update the minimum and suggested operating systems 
and web browsers that entities should support, and (3) revising the 
NAESB WGQ data sets or other technical implementation documentation 
while not resulting in modifications to the underlying business 
practice standards. The package of standards also includes minor 
corrections.
    The implementation of these data requirements will provide 
additional transparency to informational posting websites and will 
improve communication standards. The implementation of these standards 
and regulations will promote the additional efficiency and reliability 
of the natural gas industries' operations thereby helping the 
Commission to carry out its responsibilities under the NGA. In 
addition, the Commission's Office of Enforcement will use the data for 
general industry oversight.
    Internal Review: The Commission has reviewed the business practice 
standards of natural gas pipelines adopted by NAESB and has determined 
that the revisions the Commission makes in this Final Rule to its 
regulations are necessary to provide additional transparency to 
informational posting websites and promote the additional efficiency 
and reliability of the natural gas industry's operations. These 
requirements conform to the Commission's plan for efficient information 
collection, communication, and management within the natural gas 
pipeline industry. The Commission has assured itself, by means of its 
internal review, that there is specific, objective support for the 
burden estimates associated with the information requirements. 
Interested persons may obtain information on the reporting requirements 
by contacting the following: Federal Energy Regulatory Commission, 888 
First Street NE, Washington, DC 20426 [Attention: Ellen Brown, Office 
of the Executive Director], email: [email protected], phone: (202) 
502-8663, fax: (202) 273-0873.
    42. Comments concerning the collection of information(s) and the 
associated burden estimate(s) should be sent to the contact listed 
above and to OMB, Office of Information and Regulatory Affairs, 
Washington, DC 20503 [Attention: Desk Officer for the

[[Page 62248]]

Federal Energy Regulatory Commission, telephone: (202) 395-0710, fax: 
(202) 395-4718].

VII. Environmental Analysis

    43. The Commission concludes that neither an Environmental 
Assessment nor an Environmental Impact Statement is required for this 
Final Rule under Sec.  380.4(a) of the Commission's regulations, which 
provides a categorical exemption for actions that are clarifying, 
corrective, or procedural, or that do not substantively change the 
effect of legislation or regulations being amended, for information 
gathering, analysis, and dissemination, or for the sale, exchange, or 
transportation of natural gas under sections 4, 5, and 7 of the NGA 
that require no construction of facilities.\36\ Therefore, an 
environmental review is unnecessary and has not been prepared as part 
of this Final Rule.
---------------------------------------------------------------------------

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

VIII. Regulatory Flexibility Act

    44. The Regulatory Flexibility Act of 1980 (RFA) \37\ generally 
requires a description and analysis of final rules that will have 
significant economic impact on a substantial number of small entities. 
The Commission is not required to make such analysis if proposed 
regulations would not have such an effect.
---------------------------------------------------------------------------

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

    45. As we stated in the WGQ Version 3.1 NOPR, approximately 165 
interstate natural gas pipelines, both large and small, are potential 
respondents subject to the requirements adopted by this rule. Most of 
the natural gas pipelines regulated by the Commission do not fall 
within the RFA's definition of a small entity,\38\ which is currently 
defined for natural gas pipelines as a company that, in combination 
with its affiliates, has total annual receipts of $27.5 million or 
less.\39\ For the year 2018, only eleven companies not affiliated with 
larger companies had annual revenues in combination with its affiliates 
of $27.5 million or less and therefore could be considered a small 
entity under the RFA. This represents about seven percent of the total 
universe of potential respondents that may have a significant burden 
imposed on them. The Commission estimates that the one-time 
implementation cost of the proposals in this Final Rule is $538,560 (or 
$3,264 per entity, regardless of entity size).\40\ The Commission does 
not consider the estimated $3,264 impact per entity to be significant. 
Moreover, these requirements are designed to benefit all customers, 
including small businesses that must comply with them. Further, as 
noted above, adoption of consensus standards helps ensure the 
reasonableness of the standards by requiring that the standards draw 
support from a broad spectrum of industry participants representing all 
segments of the industry. Because of that representation and the fact 
that industry conducts business under these standards, the Commission's 
regulations should reflect those standards that have the widest 
possible support.
---------------------------------------------------------------------------

    \38\ See 5 U.S.C. 601(3) citing section 3 of the Small Business 
Act (SBA), 15 U.S.C. 623. Section 3 of the SBA defines a ``small-
business concern'' as a business which is independently owned and 
operated and which is not dominant in its field of operation.
    \39\ 13 CFR 121.201 (Subsector 486-Pipeline Transportation; 
North American Industry Classification System code 486210; Pipeline 
Transportation of Natural Gas) (2018). ``Annual Receipts'' are total 
income plus cost of goods sold.
    \40\ This number is derived by dividing the total cost figure by 
the number of respondents. $538,560/165 = $3,264.
---------------------------------------------------------------------------

    46. Accordingly, pursuant to Sec.  605(b) of the RFA,\41\ the 
regulations being promulgated herein should not have a significant 
economic impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \41\ 5 U.S.C. 605(b).
---------------------------------------------------------------------------

IX. Document Availability

    47. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
internet through FERC's Home Page (http://www.ferc.gov) and in FERC's 
Public Reference Room during normal business hours (8:30 a.m. to 5:00 
p.m. Eastern time) at 888 First Street NE, Room 2A, Washington DC 
20426.
    48. From FERC's Home Page on the internet, this information is 
available on eLibrary. The full text of this document is available on 
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or 
downloading. To access this document in eLibrary, type the docket 
number excluding the last three digits of this document in the docket 
number field.
    49. User assistance is available for eLibrary and the FERC's 
website during normal business hours from FERC Online Support at (202) 
502-6652 (toll free at 1-866-208-3676) or email at 
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202)502-8659. Email the Public Reference Room at 
[email protected].

X. Effective Date and Congressional Notification

    50. These regulations are effective February 1, 2019. The 
Commission has determined (with the concurrence of the Administrator of 
the Office of Information and Regulatory Affairs of OMB) that this rule 
is not a ``major rule'' as defined in section 351 of the Small Business 
Regulatory Enforcement Fairness Act of 1996. This Final Rule is being 
submitted to the Senate, House, and Government Accountability Office.

List of Subjects in 18 CFR Part 284

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

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

    Issued: November 15, 2018.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

    In consideration of the foregoing, the Commission amends part 284, 
chapter I, title 18, Code of Federal Regulations, as follows:

PART 284--CERTAIN SALES AND TRANSPORTATION OF NATURAL GAS UNDER THE 
NATURAL GAS POLICY ACT OF 1978 AND RELATED AUTHORITIES

0
1. The authority citation for part 284 continues to read as follows:

    Authority: 15 U.S.C. 717-717z, 3301-3432; 42 U.S.C. 7101-7352; 
43 U.S.C. 1331-1356.


0
2. Section 284.12 is amended by:
0
a. Revising paragraph (a)(1); and
0
b. Removing from paragraph (a)(2) the phrase ``http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html'' and 
adding ``www.archives.gov/federal-register/cfr/ibr-locations.html'' in 
its place.
    The revision reads as follows:


Sec.  284.12  Standards for pipeline business operations and 
communications.

    (a) * * *
    (1) An interstate pipeline that transports gas under subparts B or 
G of this part must comply with the business practices and electronic 
communications standards as promulgated by the North American Energy 
Standards Board, as incorporated herein by reference in paragraphs 
(a)(1)(i) through (vii) of this section.
    (i) Additional Standards (Version 3.1, September 29, 2017);
    (ii) Nominations Related Standards (Version 3.1, September 29, 
2017);
    (iii) Flowing Gas Related Standards (Version 3.1, September 29, 
2017);

[[Page 62249]]

    (iv) Invoicing Related Standards (Version 3.1, September 29, 2017);
    (v) Quadrant Electronic Delivery Mechanism Related Standards 
(Version 3.1, September 29, 2017);
    (vi) Capacity Release Related Standards (Version 3.1, September 29, 
2017); and
    (vii) internet Electronic Transport Related Standards (Version 3.1, 
September 29, 2017).
* * * * *
[FR Doc. 2018-26158 Filed 11-30-18; 8:45 am]
BILLING CODE 6717-01-P


Current View
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesThis rule will become effective February 1, 2019. Compliance filings required by this rule are due on April 1, 2019 and compliance with the standards incorporated in this rule is required on and after August 1, 2019. The incorporation by reference of certain publications listed in this rule is approved by the Director of the Federal Register as of February 1, 2019.
ContactStanley Wolf (technical issues), Office of Energy Policy and Innovation, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, (202) 502-6841, [email protected]
FR Citation83 FR 62242 
CFR AssociatedIncorporation by Reference; Natural Gas and Reporting and Recordkeeping Requirements

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