Standards For Business Practices of Interstate Natural Gas Pipelines

In addition to publishing the full text of this document in the Federal Register, the Commission also provides all interested persons an opportunity to inspect or copy the contents of this document during normal business hours in the Public Reference Room at 888 First Street, NE, Room 2A, Washington, DC 20426. The Commission Issuance Posting System (CIPS) provides access to the texts of formal documents issued by the Commission. CIPS can be accessed via Internet through FERC's Homepage (www.ferc.fed.us) using the CIPS Link or the Energy Information Online icon. The full text of this document will be available on CIPS in ASCII and WordPerfect 6.1 format. CIPS is also available through the Commission's electronic bulletin board service at no charge to the user and may be accessed using a personal computer with a modem by dialing 202-208-1397, if dialing locally, or 1-800-856- 3920, if dialing long distance. To access CIPS, set your communications software to 19200, 14400, 12000, 9600, 7200, 4800, 2400, or 1200 bps, full duplex, no parity, 8 data bits and 1 stop bit. User assistance is available at 202-208-2474 or by E-mail to [email protected] This document is also available through the Commission's Records and Information Management System (RIMS), an electronic storage and retrieval system 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. RIMS is available in the Public Reference Room or remotely via Internet through FERC's Homepage using the RIMS link or the Energy Information Online icon. User assistance is available at 202-208-2222, or by E-mail to [email protected] Finally, the complete text on diskette in WordPerfect format may be purchased from the Commission's copy contractor, RVJ International, Inc. RVJ International, Inc., is located in the Public Reference Room at 888 First Street, NE, Washington, DC 20426.

Before Commissioners: James J. Hoecker, Chairman; Vicky A. Bailey, William L. Massey, Linda Breathitt, and Curt Hebert, Jr.

Order No. 587-J; Order Granting Rehearing and Clarification

On October 29, 1998, the Interstate Natural Gas Association of America (INGAA) filed a request for clarification or rehearing of Order No. 587-I 1 with respect to the policy for achieving parity between interactive Internet web sites and electronic file transfers. The Commission grants rehearing and provides clarification as discussed below. ---------------------------------------------------------------------------

\1\ Standards For Business Practices Of Interstate Natural Gas Pipelines, Order No. 587-I, 63 FR 53565 (Oct. 6, 1998), III FERC Stats. & Regs. Regulations Preambles para. 31,067 (Sep. 29, 1998). ---------------------------------------------------------------------------

Background

In Order No. 587-I, the Commission, in relevant part, adopted a dual approach to communications with interstate pipelines. Shippers were given the choice of transacting business with pipelines either through an interactive Internet web site 2 or through standardized computer-to-computer file transfers. The Commission has incorporated by reference into its regulations standards governing electronic file transfers promulgated by the Gas Industry Standards Board (GISB).3 These standards employ a format using ASC X12 electronic data interchange (EDI).4 To ensure a level playing field for those using interactive web sites and EDI file transfers, the Commission sought to ensure that shippers could conduct the same transactions and receive the same response priority regardless of the format used.5 ---------------------------------------------------------------------------

\2\ Interactive web sites permit shippers to view information on-line and transmit information to the pipelines by filling in on- line forms. \3\ GISB is a private, not-for-profit standards organization with membership drawn from all segments of the natural gas industry, including pipelines, local distribution companies, producers, end- users, and service providers (including gas marketers). Its standards must be approved by a consensus of the industry segments. \4\ Standards for EDI are promulgated by the American National Standards Institute (ANSI) Accredited Standards Committee (ASC) X12. \5\ Order No. 587-I, 63 FR at 53571, III FERC Stats. & Regs. Regulations Preambles para. 31,067 at 30,740. ---------------------------------------------------------------------------

The Commission further recognized that pipelines might have a need to update and offer new services on their interactive web sites. In order to maintain equality between interactive web sites and EDI file transfers, the Commission established a process to ensure that, whenever feasible, newly-developed transactions available on interactive web sites will also be available through EDI file transfers:

when pipelines are developing new services for their interactive web sites, they must also consider the method for implementing the business practice using EDI and, in compliance with standard 1.2.2, provide advance notice of their proposed EDI solution to GISB for review. Before initiating the new service, pipelines should file under section 4 of the NGA at least 30 days prior to the proposed implementation date detailing the efforts they have made to develop a standardized file transfer. If the pipeline has complied with the requirement to provide GISB with advance notice of their proposed EDI solution, it would be permitted to implement its new service on schedule. This approach should not inhibit development of new interactive solutions while at the same time helping to ensure that those using file transfers are not denied a

reasonable opportunity to obtain the same service.6 ---------------------------------------------------------------------------

\6\ Order No. 587-I, 63 FR at 53571, III FERC Stats. & Regs. Regulations Preambles para. 31,067 at 30,740.

INGAA contends the Commission has established a new procedural requirement for pipeline filings and seeks clarification of the advance notice requirement. INGAA maintains that the Commission introduced this new procedure without seeking industry comment. It further argues that the new procedure is unworkable because it may require pipelines to provide special notice to GISB prior to making a filing under section 4 of the Natural Gas Act (NGA). INGAA maintains that providing advance notice only to some customers could be discriminatory. INGAA requests clarification that pipelines should provide notice to GISB within a reasonable time after they file a notice of a new service with the Commission under section 4 of the NGA. In the alternative, INGAA requests rehearing of the advance notice requirement.

Discussion

In Order No. 587-I, the Commission's goal was to provide shippers with the ability to choose the communication methodology that best fits their business needs. The Commission, therefore, required pipelines to permit shippers to conduct transactions either through on-line transactions via the pipelines' proprietary interactive web site or by using computer-to-computer standardized EDI file transfers. To ensure that both types of shippers are treated without discrimination, the Commission required that all transactions conducted on the pipelines' interactive web site must, whenever feasible, also be available through EDI file transfers. As described in Order No. 587-I, the Commission and GISB already have started a process to ensure that all current transactions that are conducted on pipeline web sites can be accomplished, when feasible, through interactive file transfers.7 ---------------------------------------------------------------------------

\7\ Order No. 587-I, 63 FR at 53570-71, III FERC Stats. & Regs. Regulations Preambles para. 31,067 at 30,738, 30,740. ---------------------------------------------------------------------------

But that leaves the procedure to be followed when pipelines, in the future, develop new electronic transactions to be conducted on their interactive web sites. The Commission's policy, as articulated in Order No. 587-I, is that whenever pipelines begin to develop new interactive transactions, they must at the same time develop a method by which the transactions can be accomplished using EDI file transfer so that shippers using EDI are given a comparable opportunity to accomplish the transactions electronically. Moreover, in order to ensure consistency in the standardized EDI file transfers, pipelines must keep GISB informed of the pipelines' proposed EDI solutions during the course of development, so that GISB can review the pipelines' proposed approaches to ensure that they are consistent with GISB's standards. In Order No. 587-I, the Commission stated that the pipelines should file, pursuant to section 4 of the Natural Gas Act, whenever they propose to implement a new electronic transaction. Upon reconsideration, however, the Commission has determined that it is not necessary for pipelines to make a section 4 filing to effectuate the Commission's policy. Instead, pipelines must post on their interactive web sites a notice of the new transaction along with the method of accomplishing that transaction using EDI file transfer. Pipelines also must make an informational filing with the Commission when they implement the new transaction and should, in that filing, detail the efforts they have made to develop an acceptable EDI file transfer capability, including the amount of advance notice they have provided to GISB of the file transfer capability they have proposed. The Commission can use this informational filing to monitor the pipelines' compliance with Commission policy to determine whether the policy is working or whether further Commission action is necessary. In addition, shippers who are unable to use, or are having difficulty with, pipeline EDI file transfers can make use of the Commission's Enforcement Hotline or the complaint process to bring these to the Commission's attention. In its rehearing request, INGAA contends that providing GISB with notice of a pipeline's electronic transactions before the pipeline makes its section 4 filing is improper because it would prematurely disclose to certain parties the contents of the section 4 filing. Since the Commission is no longer requiring pipelines to make section 4 filings to implement new electronic transactions, INGAA's concern about premature disclosure of a pipeline's section 4 filing is no longer material. INGAA further contends that GISB, not the pipelines, should be responsible for developing EDI file transfers. The Commission disagrees. Pipelines must be actively involved in developing file transfer capability and cannot leave that process solely in GISB's hands. When a pipeline is developing a new transaction for its Internet web site, it is responsible for reviewing the current file transfer datasets and determining how its proposed transaction can best be handled through EDI file transfer. The pipeline is the most familiar with its new electronic offering and, therefore, is in the best position to develop a file transfer approach to handling that transaction. The pipeline would then inform GISB of its proposed solution so that GISB can review the pipeline's approach to ensure the approach is the most effective means of integrating the transaction into the standardized datasets.8 ---------------------------------------------------------------------------

\8\ This is similar to the process under GISB standard 1.2.2, where the pipeline and a shipper mutually agreed to datasets which they then submit to GISB for review and implementation. 18 CFR 284.10(b)(1)(i), Nominations Related Standards 1.2.2. ---------------------------------------------------------------------------

The Commission Orders

Rehearing is granted and clarification is provided as discussed in the body of the order.

By the Commission. Linwood A. Watson, Jr., Acting Secretary. [FR Doc. 99-2528 Filed 2-2-99; 8:45 am] BILLING CODE 6717-01-P