Rules and Regulations. Final rule; Order establishing implementation date for imbalance trading

Agency: Federal Energy Regulatory Commission
Action: Final rule; Order establishing implementation date for imbalance trading
Citation: FR Doc. 00-17162 · Docket No. RM96-1-014;Order No. 587-L · 18 CFR 284

Summary

The Federal Energy Regulatory Commission is establishing November 1, 2000, as the date by which pipelines are required to comply with the regulation requiring pipelines to permit shippers to offset imbalances on different contracts held by the shipper and to trade imbalances. (18 CFR 284.12(c)(2)(ii)). This regulation was adopted in Order No. 587-G. (63 FR 20072).

Dates

Pipelines must comply with 18 CFR 284.12(c)(2)(ii) by November 1, 2000.

Supplementary Information

United States of America Federal Energy Regulatory Commission Before Commissioners: James J. Hoecker, Chairman; William L. Massey, Linda Breathitt, and Curt Hébert, Jr. Standards For Business Practices Of Interstate Natural Gas Pipelines. [Docket No. RM96-1-014] Order No. 587-L Order Establishing Implementation Date for Imbalance Trading Issued June 30, 2000. In Order No. 587-G, 1 the Commission adopted a regulation, 18 CFR 284.12(c)(2)(ii), requiring pipelines to permit shippers to offset imbalances on different contracts held by the shipper and to trade imbalances. Through trading of imbalances, shippers would be able to avoid penalties, without compromising the operational reliability of the pipeline's system. 2 In Order No. 587-G, the Commission deferred implementation of this regulation until the Gas Industry Standards Board (GISB) had an opportunity to develop standards related to imbalance trading. 1 Standards For Business Practices Of Interstate Natural Gas Pipelines, Order No. 587-G, 63 FR 20072 (Apr. 23, 1998), III FERC Stats. & Regs. Regulations Preambles ¶ 31,062 (Apr. 16, 1998), on reh'g , Order No. 587-I, 63 FR 53565 (Oct. 6, 1998), III FERC Stats. & Regs. Regulations Preambles ¶ 31,067 (Sep. 29, 1998). 2 Order No. 587-G, 63 FR at 20081, III FERC Stats. & Regs. Regulations Preambles ¶ 31,062, at 30,677-80. The Commission further recognized the importance of imbalance trading in Order No. 637. 3 The Commission found that penalties can operate to distort the workings of the market and that imbalance trading plays an important role in the Commission's overall penalty policy because shippers can use imbalance trading to better manage their penalty exposure without jeopardizing the integrity of the pipeline's operations. The Commission further found that imbalance trading was of sufficient importance to shippers' ability to manage their business that pipelines would not be permitted to implement new imbalance services (such as park and loan services) before they implement imbalance trading. 4 3 Regulation of Short-Term Natural Gas Transportation Services and Regulation of Interstate Natural Gas Transportation Services, Order No. 637, 65 FR 10156, 10198 (Feb. 25, 2000), III FERC Stats. & Regs. Regulations Preambles ¶ 31,091, at 31,308 (Feb. 9, 2000), Order No. 637-A, 65 FR 35705 (Jun. 5, 2000), III FERC Stats. & Regs. Regulations Preambles ¶ 31,099 (May 19, 2000). 4 Order No. 637, 65 FR at 10199, III FERC Stats. & Regs. Regulations Preambles ¶ 31,091, at 31,311; Order No. 637-A, 65 FR at 35737, III FERC Stats. & Regs. Regulations Preambles ¶ 31,099, at 31,601-602. On February 23, 2000, GISB filed with the Commission a report on its standards development progress. GISB reports that its Executive Committee approved standards for imbalance trading and netting and title transfer tracking and that these standards are awaiting the development of the technical standards for information requirements and technical mapping. On February 11, 2000, the Executive Committee also established an Expedited Data Development Subcommittee whose first charge is to complete the technical standards for imbalance trading promptly. 5 5 See http://www.gisb.org/edd.htm (June 8, 2000) (announcing formation of Expedited Data Development Subcommittee). Because of the importance of imbalance trading to the overall Commission policy regarding pipeline penalties, the Commission is establishing November 1, 2000 as the date by which pipelines are to comply with the requirement to provide imbalance trading to their shippers. Since GISB has been working since February 2000 on developing the technical standards, this date should provide GISB and the pipelines with sufficient opportunity to complete the technical standards and implement imbalance trading. To implement imbalance trading on their systems, pipelines must file revised tariff sheets not less than 30 days nor more than 60 days prior to November 1, 2000. 6 6 18 CFR 154.207. The Commission orders: Each interstate pipeline must comply with § 284.12(c)(2)(ii) of the Commission regulations by November 1, 2000. By the Commission. David P. Boergers, Secretary. [FR Doc. 00-17162 Filed 7-6-00; 8:45 am]