FERC Issues Final Rule Incorporating NAESB Wholesale Gas Quadrant Business Practice Standards Version 3.0

On October 15, 2015, FERC issued a final rule (Order No. 587-W) amending its regulations at 18 C.F.R. § 284.12 to incorporate by reference, with certain enumerated exceptions, the latest version (Version 3.0) of business practice standards applicable to interstate natural gas pipelines (and to the contents of intrastate pipeline Form No. 549D filings) adopted by the North American Energy Standards Boards's ("NAESB") Wholesale Gas Quadrant ("WGQ"). Interstate pipelines must file tariff records to reflect the changed standards by February 1, 2016, with such records to take effect on April 1, 2016, and must comply with the revised standards beginning on April 1, 2016. The final rule adopts policies on waiver requests set out in the related Notice of Public Rulemaking ("NOPR"). Intrastate pipelines filing Form No. 549D should use, instead of common codes, their own location codes and names in their list of jurisdictional receipt and delivery points. Upon incorporation by reference, the new Version 3.0 Standards will replace the standards incorporated by reference in 2012 in Order No. 587-V.

The final rule largely adopts the proposals in the notice of proposed rulemaking (Version 3.0 NOPR) issued by FERC on July 16, 2015. The updated business standards fall into several general categories.

First, the updated business standards contain and supplement the revisions to the NAESB scheduling standards accepted by FERC in Order 809 as part of its efforts to harmonize gas-electric scheduling coordination, which revisions are to be implemented on April 1, 2016.

Second, the updated business standards revise the codes used by pipelines to identify receipt and delivery locations. Pipelines are to cease using common codes and the location common code system, as the NAESB membership concluded that the common code system provided little commercial benefit to the industry at large. Instead, each transportation service provider assigns the proprietary codes that it will use to identify points of receipt and delivery. The new standards require pipelines to post sufficient information on their websites to permit shippers and FERC to identify the interconnection points between pipelines that were previously identified through the common codes, and FERC is promulgating a new subsection 284.13(f) setting forth related pipeline posting requirements (and moving contents of existing 284.13(c)(2)-(6) to it). The proprietary codes will be used by FERC in its Index of...

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