scheduling processes.\145\ Several commenters state that moving the
Timely Nomination Cycle deadline later will also reduce costs and
improve efficiency among gas-fired generation units.\146\
---------------------------------------------------------------------------

    \144\ AGA Comments at 22; Ameren Comments at 1; ANGA Comments at
3; BHE Comments at 16-17; Calpine Comments at 7; Castex (Producer
Coalition) Comments at 7; CenterPoint Comments 3-4; Con Edison
Companies Comments at 9; CPG Comments at 5; Direct Energy Comments
at 2; Dominion Comments at 3; DTE Gas Comments at 3; Duke Energy
Comments at 3; EDF et al. Comments at 7-8; Enhanced Reliability
Coalition Comments at 29; EPSA Comments at 7; Equipower Comments at
9; ESI Comments at 3-4; Exelon Comments at 6; Gas Processors
Association Comments at 1-2; INGAA Comments at 5; IOGA Comments at
5; IPPA Comments at 2; IRC Comments at 3; Kinder Morgan Comments at
6; National Fuel Distribution at 2-3; National Grid Comments at 1-2;
Natural Gas Council Comments at 1-2; New England LDCs Comments at
30; NGSA Comments at 1-2; Nisource Comments at 2; Northwest Gas
Association Comments at 2-3; Northwest Industrial Gas Users Comments
at 5-6; PGC Comments at 4; PUCO Comments at 6-8; Puget Comments at
10; Sequent Comments at 6; Southern Companies Comments at 11;
Southern Star Comments at 3; Spectra Comments at 4; Texas Pipeline
Association Comments at 9; TVA Comments at 2; WBI Energy Comments at
4.
    \145\ See, e.g., Calpine Comments at 8; CPG Comments at 6; Duke
Energy Comments at 2-4; EquiPower Comments at 9; INGAA Comments at
5; National Grid Comments 1-2; New England LDCs Comments at 31;
NESCOE Comments at 4-5; PGC Comments at 4-5; PUCO Comments at 5-6.
    \146\ See, e.g., EDF et al. Comments at 7-8; PUCO Comments at 5-
6.
---------------------------------------------------------------------------

    85. A few commenters support moving the Timely Nomination Cycle,
but believe that the 1:00 p.m. nomination deadline is too early in the
day. Xcel Energy and SPP believe that the start time for the Timely
Nomination Cycle should be extended to 1:30 p.m. CCT and 2:00 p.m. CCT,
respectively, arguing that a 1:00 p.m. CCT nomination deadline would
not allow power generators in MISO's and SPP's market sufficient time
to secure the gas necessary to support their bids.\147\ Similarly,
Puget states that ISO and RTO bids will need to be awarded at least 1.5
hours prior to the NAESB Timely Nomination Cycle nomination deadline to
allow energy schedulers adequate time to confirm transactions, exchange
contracts, and enter nominations on pipelines.\148\
---------------------------------------------------------------------------

    \147\ SPP Comments at 2-3; Xcel Energy Comments at 3-5.
    \148\ Puget Comments at 13.
---------------------------------------------------------------------------

    86. MSCG does not support moving the Timely Nomination Cycle
nomination deadline, arguing that the proposed change affects one
hundred percent of the gas market while only benefitting about a third
of energy markets and without providing additional liquidity in the
market for natural gas.\149\
---------------------------------------------------------------------------

    \149\ MSCG Comments at 15-16.
---------------------------------------------------------------------------

4. Commission Determination
    87. The Commission is amending its regulations at Part 284 to
incorporate by reference NAESB's revised standards, which provide that
the nomination deadline for the Timely Nomination Cycle shall be 1:00
p.m. CCT, with notice to shippers of scheduled quantities at 5:00 p.m.
CCT, and the nomination deadline for the Evening Nomination Cycle shall
remain at 6:00 p.m. CCT, with notice to shippers of scheduled
quantities at 9:00 p.m. CCT. These changes, along with being generally
consistent with the NOPR's proposed 1:00 p.m. CCT start time for the
Timely Nomination Cycle, are supported by the vast majority of the
commenters, from both the gas and electric industries, including
commenters that do not generally support NAESB's revised intraday
nomination timeline. NAESB's revised 1:00 p.m. CCT start time for the
Timely Nomination Cycle, like the NOPR's proposed 1:00 p.m. CCT start
time, will provide generators more time to acquire natural gas supply
and pipeline transportation after learning their electric dispatch
obligations, provided changes are made to the ISO and RTO scheduling
processes. NAESB's proposal to provide notice of scheduled quantities
at 5:00 p.m. also enables gas industry participants to complete the
Timely Nomination Cycle by the end of the business day, while still
providing sufficient time for the nomination, confirmation and
scheduling process.
    88. The Commission declines to extend the deadline for submitting
nominations in the Timely Nomination Cycle past 1:00 p.m. CCT, as
requested by a few commenters. Such an extension would likely require
corresponding changes in the remainder of the Timely Nomination Cycle
process, including moving back NAESB's proposed 5:00 p.m. CCT deadline
for posting scheduled quantities. However, as many commenters point
out, there needs to be sufficient time between the scheduled quantity
posting of one cycle and the nomination deadline for the next cycle to
enable shippers to review their transportation needs prior to the next
nomination deadline.\150\ Further extending the Timely Nomination Cycle
nomination deadline would reduce or do away completely with the time
between when the Timely Nomination Cycle schedule is issued and the
6:00 p.m. deadline for submitting nominations in the Evening Nomination
Cycle. Also, commenters in the natural gas industry contend that the
further the Timely Nomination Cycle process falls outside of regular
business hours, the more likely it is that producers, point operators,
and shippers will be harder to reach to resolve nomination,

confirmation and scheduling errors.\151\ Given the support for the
revised NAESB schedule and the problems created in moving the time any
later, the concerns of the commenters with the coordination of the
current scheduling processes of MISO and SPP relative to natural gas
scheduling are best addressed in the section 206 proceedings the
Commission instituted for each ISO and RTO.
---------------------------------------------------------------------------

    \150\ See, e.g., Exelon Comments at 7; NGSA Comments at 16.
    \151\ See, e.g., INGAA Comments at 8.
---------------------------------------------------------------------------

C. Intraday Nomination Cycles

    89. In addition to the Timely and Evening Nomination Cycles,
pipelines currently must offer shippers at least two opportunities to
nominate natural gas during the day that gas is flowing. These
nomination opportunities are known as the Intraday 1 and Intraday 2
Nomination Cycles. The current Intraday 1 Nomination Cycle begins at
10:00 a.m. CCT on the day of gas flow, with pipelines issuing scheduled
quantities at 2:00 p.m. CCT, and the start of gas flow at 5:00 p.m.
CCT. The current Intraday 2 Nomination Cycle begins at 5:00 p.m. CCT on
the day of gas flow, with pipelines issuing scheduled quantities at
9:00 p.m. CCT, and gas flow also starting at 9:00 p.m. CCT. As with
nominations made at the Timely or Evening Nomination Cycles,
nominations for firm service at the Intra-Day 1 Nomination Cycle can
``bump'' an already scheduled interruptible nomination. Pursuant to the
``No-Bump Rule,'' however, nominations for firm service made at the
Intraday 2 cycle cannot ``bump'' previously scheduled interruptible
service.
    90. A number of commenters in response to the technical conferences
in Docket No. AD12-12-000 stated that the standard, nation-wide
nomination opportunities currently available may not provide gas-fired
generators or other shippers with sufficient flexibility to adjust
their nominations to respond to real-time changes in their need for
natural gas.\152\ These commenters requested that the Commission
require additional, standardized intraday nomination opportunities on
interstate natural gas pipelines. Pipelines and other gas market
participants indicated that they were open to the creation of the
additional standard nomination cycles.\153\
---------------------------------------------------------------------------

    \152\ NOPR, 146 FERC ] 61,201 at P 57.
    \153\ Id. P 62.
---------------------------------------------------------------------------

1. NOPR Proposal
    91. To address concerns that the current standard, nation-wide
intraday nomination opportunities do not provide shippers--especially
natural gas-fired generators--with sufficient flexibility, the NOPR
proposed to modify the current natural gas nomination timeline to add
two additional intraday nomination cycles so that shippers would have
four intraday cycles to reschedule gas instead of the existing two. The
additional intraday nomination cycles would maximize shippers' ability
to make significant changes in their intraday nominations, as well as
provide firm shippers an additional, bumpable late-afternoon nomination
cycle. The proposed revisions would provide gas-fired generators, as
well as other pipeline customers, with greater flexibility to revise
their nominations to adjust to system conditions and changes to load
throughout the Gas Day.
    92. The timelines proposed in the NOPR were based on the proposed
adoption of 4:00 a.m. CCT as the start of the Gas Day. The NOPR
proposed that the Intraday 1 Nomination Cycle begin at 8:00 a.m. CCT,
with pipelines issuing scheduled quantities at 11:00 a.m. CCT, and gas
flow beginning at 12:00 noon CCT. The Intraday 1 Nomination Cycle would
provide an early morning opportunity for shippers to nominate gas. The
NOPR proposed that the Intraday 2 Nomination Cycle begin at 10:30 a.m.
CCT, with pipelines issuing scheduled quantities at 2:00 p.m. CCT, and
gas flow beginning at 4:00 p.m. CCT. The NOPR proposed Intraday 2 cycle
would replace the current Intraday 1 mid-morning nomination cycle and
permit bumping. The NOPR proposed Intraday 3 Nomination Cycle would
begin at 4:00 p.m. CCT with pipelines issuing scheduled quantities at
6:00 p.m. CCT, and gas flow beginning at 7:00 p.m. CCT. The NOPR
proposed Intraday 3 Nomination Cycle would provide an additional
bumping opportunity for firm shippers. The NOPR proposed Intraday 4
Nomination Cycle would begin at 7:00 p.m. CCT with pipelines issuing
scheduled quantities at 9:00 p.m. CCT, and gas flow beginning at 9:00
p.m. CCT. The NOPR Intraday 4 Nomination Cycle would replace the
current 5:00 p.m. no-bump cycle.
2. NAESB's Revised Intraday Nomination Cycles
    93. NAESB's revised standards provide for three intraday nomination
opportunities, rather than the four proposed in the NOPR. In contrast
to the NOPR proposal to start the Intraday 1 Nomination Cycle at 8:00
a.m. CCT, NAESB's revised standards start the Intraday 1 Nomination
Cycle at the existing 10:00 a.m. CCT time. However, the revised
standards move the deadline for pipelines to issue scheduled quantities
up to 1:00 p.m. CCT from the existing NAESB standard of 2:00 p.m., and
for gas flow to begin at 2:00 p.m. CCT, rather than the existing 5:00
p.m. CCT. NAESB's revised standards provide for the Intraday 2
Nomination Cycle to start at 2:30 p.m. CCT, rather than 5:00 p.m., as
it now does. Pipelines would issue scheduled quantities at 5:30 p.m.
CCT, rather than the existing 9:00 p.m., and gas flow would begin at
6:00 p.m. CCT, instead of the existing 9:00 p.m. NAESB's new Intraday 3
Nomination Cycle begins at 7:00 p.m. CCT, with scheduled quantities
issued at 10:00 p.m. CCT, and gas flow beginning at 10:00 p.m. CCT.
NAESB's revised standards provide that bumping of interruptible service
will be allowed during the Intraday 2 Nomination Cycle in addition to
the Intraday 1 Nomination Cycle.\154\ NAESB's revised standards reflect
reduced intraday processing times from the current NAESB standards
(i.e., 3 hours instead of the current 4 hours). A comparison of the
current NAESB intraday nomination timeline and the revised NAESB
intraday nomination timeline is shown in the table below.
---------------------------------------------------------------------------

    \154\ A comparison of the current NAESB nomination timeline and
the revised NAESB nomination timeline is set forth in the Appendix.

                   Table 8--Intraday Nomination Cycles
------------------------------------------------------------------------
                                  Current NAESB         Revised NAESB
 Time shifts--all times CCT         standards             standards
------------------------------------------------------------------------
Intraday 1
    Nomination Deadline.....  10:00 a.m...........  10:00 a.m.
    Schedule Issued.........  2:00 p.m............  1:00 p.m.
    Start of Gas Flow.......  5:00 p.m............  2:00 p.m.
    IT Bump Rights..........  bumpable............  bumpable.

Intraday 2
    Nomination Deadline.....  5:00 p.m............  2:30 p.m.
    Schedule Issued.........  9:00 p.m............  5:30 p.m.
    Start of Gas Flow.......  9:00 p.m............  6:00 p.m.
    IT Bump Rights..........  no bump.............  bumpable.
Intraday 3
    Nomination Deadline.....  ....................  7:00 p.m.
    Confirmations...........  ....................  9:30 p.m.
    Schedule Issued.........  ....................  10:00 p.m.
    Start of Gas Flow.......  ....................  10:00 p.m.
    IT Bump Rights..........  ....................  no bump.
------------------------------------------------------------------------

3. Comments
    94. The large majority of comments on this issue support or do not
oppose NAESB's revised standards providing for three Intraday
Nomination Cycles.\155\ Commenters state that, consistent with the
NOPR's proposed four intraday nomination cycles, NAESB's modified three
intraday nomination cycles will allow gas-fired generators, as well as
other pipeline customers, more flexibility to respond to scheduling,
operational, or weather-related changes throughout the operating
day.\156\
---------------------------------------------------------------------------

    \155\ AGA Comments at 22; Ameren Comments at 1; ANGA Comments at
3; BHE Comments at 16-17; Calpine Comments at 7; Castex (Producer
Coalition) Comments at 7; CenterPoint Comments 3-4; Con Edison
Companies Comments at 9; CPG Comments at 5; Direct Energy Comments
at 2; Dominion Comments at 3; DTE Gas Comments at 3; Duke Energy
Comments at 3; Enhanced Reliability Coalition Comments at 29; EPSA
Comments at 7; Equipower Comments at 9; ESI Comments at 3-4; Exelon
Comments at 6; Gas Processors Association Comments at 1-2; INGAA
Comments at 5; IOGA Comments at 5; IPPA Comments at 2; Kinder Morgan
Comments at 6; National Fuel Distribution at 2-3; National Grid
Comments at 1-2; Natural Gas Council Comments at 1-2; New England
LDCs Comments at 30; NGSA Comments at 1-2; Nisource Comments at 2;
Northwest Gas Association Comments at 2-3; Northwest Industrial Gas
Users Comments at 5-6; PGC Comments at 4; PUCO Comments at 6-8;
Puget Comments at 10; Sequent Comments at 6; Southern Companies
Comments at 11; Southern Star Comments at 3; Spectra Comments at 4;
Texas Pipeline Association Comments at 9; TVA Comments at 2; WBI
Energy Comments at 4.
    \156\ See, e.g., AGA Comments at 22-23; Ameren Comments at 5;
CPG Comments at 5-6; Duke Energy Comments at 2-4; Exelon Comments at
6; INGAA Comments 5-7; IOGA Comments at 5
---------------------------------------------------------------------------

    95. Many commenters state that they do not support an additional
fourth intraday nomination cycle, as proposed in the NOPR, arguing it
would likely result in increased costs and overlapping cycles.\157\ For
example, Dominion states that a fourth intraday cycle may require a
third shift of employees, which will increase costs for pipelines.\158\
---------------------------------------------------------------------------

    \157\ See, e.g., Exelon Comments at 7; Kinder Morgan Comments at
XX; NGSA Comments at 16-17; PGC Comments at 5; Puget Comments at 17;
WBI Energy Comments at 4-5.
    \158\ Dominion Comments at 11.
---------------------------------------------------------------------------

    96. Many commenters state that NAESB's three intraday nomination
cycles resolve gas industry participants' concerns with the NOPR's
proposed four intraday nomination cycles regarding overlapping cycles,
which, left unresolved, could lead to greater instances of incorrect
shipper nominations and scheduling errors.\159\ Commenters highlight
several examples of overlapping cycles under the NOPR's proposed four
intraday nomination cycles. First, commenters state that the start of
the NOPR's proposed Evening Nomination Cycle is at 6:00 p.m. CCT, which
would be the same time scheduled quantities are posted for the Intraday
3 Nomination Cycle. Commenters state that this would require a shipper
to analyze how much of its gas the pipeline scheduled to flow for the
remainder of the current Gas Day at the same time it must nominate in
the Evening Nomination Cycle for gas flow the next day. Second,
commenters state that the NOPR's proposed 10:30 a.m. CCT start of the
Intraday 2 Nomination Cycle would be before the 11:00 a.m. CCT posting
of scheduled quantities for the Intraday 1 Nomination Cycle. Commenters
state that under this timeline a customer would have to nominate gas in
the Intraday 2 Nomination Cycle before learning what quantity of gas
the pipeline scheduled in the Intraday 1 Nomination Cycle. Third,
commenters state that the NOPR's proposed 4:30 p.m. CCT posting of
scheduled quantities for the Timely Nomination Cycle overlaps with the
4:00 p.m. start of the Intraday 3 Nomination Cycle, which would require
pipelines to schedule gas for two different cycles at the same time.
Commenters also point out that NAESB's three intraday nomination
cycles, like its revised Timely Nomination Cycle, reflect a shortened
processing time (i.e., 3 hours instead of 4 hours). Commenters in the
natural gas industry claim that these processing times cannot be
shortened any further.\160\
---------------------------------------------------------------------------

    \159\ See, e.g., Dominion Comments at 11; EPSA Comments at 6-7;
INGAA Comments at 9; PGC Comments at 5; Southern Star Comments at 5.
    \160\ Dominion Comments at 11; Kinder Morgan Comments at 6-8;
WBI Comments at 4; see also INGAA Comments at 8-9.
---------------------------------------------------------------------------

    97. Many commenters state that NAESB's three intraday nomination
cycles, unlike that of the NOPR's proposed four intraday nomination
cycles, provide sufficient time (1.5 hours) between the scheduled
quantity posting of one cycle and the nomination deadline for the next
cycle, so that shippers can review their pipeline transportation needs
prior to the next nomination deadline.\161\ Under the NOPR's proposed
four intraday nomination cycles, the 10:30 a.m. start of the Intraday 2
Nomination Cycle is before the 11:00 a.m. posting of scheduled
quantities for the Intraday 1 Nomination Cycle and there is only 1 hour
between the time the schedules are posted for the Intraday 3 Nomination
Cycle (6:00 p.m.) and the start of the Intraday 4 Nomination Cycle
(7:00 p.m.). Many commenters also point out that NAESB's nomination
timeline, in particular the three intraday nomination cycles, allows
for the accomplishment of most scheduling work during regular business
hours, or as close as possible to regular hours.\162\
---------------------------------------------------------------------------

    \161\ See, e.g., EPSA Comments 6-7; Exelon Comments at 7; INGAA
Comments at 8-9, WBI Energy Comments at 4.
    \162\ See, e.g., Enhanced Reliability Coalition Comments at 31;
Northwest Gas Association Comments at 2-3; PGC Comments at 4;
Southern Companies Comments at 10-11.
---------------------------------------------------------------------------

    98. AGA, Dominion, and INGAA submit that NAESB's three intraday
nomination cycles, in particular the Intraday 2 and Intraday 3
Nomination Cycles, will also address the Commission's concern regarding
gas-

fired generators' ability to ensure adequate gas supplies for the
morning electric ramp by providing sufficient opportunities during the
operating day to schedule gas to cover that morning period.\163\
---------------------------------------------------------------------------

    \163\ See, e.g., AGA Comments at 23; Dominion Comments at 9-10;
INGAA Comments at 6-7
---------------------------------------------------------------------------

    99. ACES, AEP, Essential Power, and IRC support the four intraday
nomination cycles proposed in the NOPR, rather than the three provided
by NAESB's revised standards.\164\ They state that more standardized
opportunities for electric generators to nominate gas would provide
generators additional operational flexibility to respond to real-time
electric system needs.
---------------------------------------------------------------------------

    \164\ ACES Comments at 9; AEP Comments at 4; Essential Power
Comments at 4; IRC Comments at 4. IRC notes that CAISO would support
three intraday gas nomination cycles irrespective of an earlier
start of the Gas Day.
---------------------------------------------------------------------------

    100. While Exelon supports NAESB's proposed three intraday
nomination cycles, it cautions that, if the start of the Gas Day
remains at 9:00 a.m. CCT, non-bumpable interruptible shippers will
preempt the rights of firm shippers for almost half of the Gas Day, or
11 hours.\165\ Con Edison point out that, if the start of the Gas Day
remains at 9:00 a.m. CCT, NAESB's last bumpable intraday cycle (2:30
p.m. CCT) would be more than 18 hours before the current start of next
Gas Day.\166\ Con Edison states that electric system conditions and
load can change dramatically during an 18-hour period. Similarly, DSPS
states that NAESB's three intraday nomination cycles makes sense from
the perspective of a utility that operates in the Eastern-time zone,
but notes that utilities, such as those in the Desert Southwest, that
do not have a late afternoon nomination cycle effectively have no tools
to ensure the reliability of their natural gas transportation during
the last 18.5 hours of the Gas Day, assuming a 9:00 a.m. CCT start to
the Gas Day.\167\
---------------------------------------------------------------------------

    \165\ Exelon Comments at 10-11.
    \166\ Con Edison Comments at 10.
    \167\ DSPS Comments at 19-20.
---------------------------------------------------------------------------

    101. EDF et al. does not support NAESB's addition of a single
intraday cycle. EDF et al. urges the Commission to standardize the
voluntary enhanced practices of certain pipelines and establish up to
twelve intraday nominating and gas capacity trading (capacity release)
cycles.\168\
---------------------------------------------------------------------------

    \168\ EDF et al. Comments at 12.
---------------------------------------------------------------------------

    102. TVA, DSPS, Southern Star, Southern Company, and Michigan PSC
encourage the Commission to consider modifying or eliminating the No-
Bump Rule.\169\ TVA asserts that firm shippers paying demand charges
under long-term firm contracts should always have priority, as firm
capacity is charged and paid for the entire twenty-four hours of the
Gas Day.\170\ DSPS states that the No-Bump Rule precludes a firm
shipper from calling upon the unutilized portion of its firm contract
to satisfy the evening peak demands if the capacity already has been
nominated by and confirmed to an interruptible shipper.\171\
---------------------------------------------------------------------------

    \169\ DSPS Comments at 19-20; Michigan PSC Comments at 5-6;
Southern Company Comments at 11-12; Southern Star Comments at 3; TVA
Comments at 3.
    \170\ TVA Comments at 3.
    \171\ DSPS Comments at 20.
---------------------------------------------------------------------------

    103. Many commenters argue that the last intraday grid-wide
nomination cycle should remain a no-bump cycle, as provided by NAESB's
revised standards.\172\ Commenters note that retaining the no-bump
cycle was strongly supported in the NAESB process. The Enhanced
Reliability Coalition states that no-bump plays an important role in
balancing the flexibility needs for interruptible transmission shippers
with available capacity while providing priority to firm shippers (who
incurred the firm shipping costs) over interruptible shippers through
the NAESB Intraday 2 Nomination Cycle.\173\
---------------------------------------------------------------------------

    \172\ See, e.g., Dominion Comments at 10; Enhanced Reliability
Coalition Comments at 31; ESPA comments at 3; IECA Comments at 4;
National Grid Comments at 30; NGSA Comments at 18-19; WBI Comments
at 5; PGC Comments at 5-6; Sequent Comments at 6.
    \173\ Enhanced Reliability Coalition Comments at 31.
---------------------------------------------------------------------------

4. Commission Determination
    104. The Commission is amending its regulations at Part 284 to
incorporate by reference NAESB's revised standards, which provide three
intraday nomination cycles. Adoption of these standards will provide
natural gas-fired generators, as well as other pipeline shippers, with
increased scheduling flexibility. While the Intraday 1 Nomination Cycle
will continue to start at 10:00 a.m. CCT, pipelines will issue
scheduled quantities at 1:00 p.m. CCT, one hour earlier than under the
currently effective standards, and gas flow will begin at 2:00 p.m.
CCT, three hours earlier than under the currently effective standards.
The new bumpable Intraday 2 Nomination Cycle will start at 2:30 p.m.
CCT, four and a half hours after the single bumpable intraday
nomination opportunity provided by the existing Intraday 1 Nomination
Cycle, with pipelines issuing scheduled quantities at 5:30 p.m. CCT,
and gas flow beginning at 6:00 p.m. CCT. By adding an additional
bumpable nomination cycle later in the day, firm shippers will have
greater opportunity to utilize the intraday schedules to reflect load
and weather changes consistent with the higher priority of their
service. The later time for the bumpable nomination will help shippers
in the west, in particular, by allowing them to reflect later changes
in weather forecasts into their nominations. The new no-bump Intraday 3
Nomination Cycle will start at 7:00 p.m. CCT, two hours later than the
current no-bump Intraday 2 Nomination Cycle, with gas flow beginning at
10:00 p.m. CCT, one hour later than under the current no-bump Intraday
2 Nomination Cycle. The later no-bump nomination cycle will give firm
shippers a further opportunity to adjust their nominations consistent
with their needs, while also providing certainty to interruptible
transactions, so shippers and pipelines can plan for flows during the
Gas Day.
    105. These revised standards reflect a consensus of the natural gas
industry, and the changes reflect broad support in both industries. The
vast majority of the commenters prefer NAESB's proposed three intraday
nomination cycles to the NOPR's proposed four intraday nomination
cycles because the NAESB proposal allows sufficient time for processing
gas nominations, avoids overlapping nomination cycles, and allows for
the accomplishment of most scheduling work during regular business
hours, or reasonably close thereto. Further, they meet the goals of the
NOPR because they provide additional flexibility to gas-fired
generators, as well as other pipeline shippers. While some would prefer
further changes to address their individual or regional needs, we find
that, on balance, these standards represent a step forward that will
benefit all shippers. We also note that under Commission policy,
pipelines may file enhanced services that provide additional scheduling
flexibility for firm shippers by adding additional nomination cycles
that allow firm shippers to bump interruptible shippers.\174\
---------------------------------------------------------------------------

    \174\ As clarified in the NOPR, pipelines may offer enhanced
nomination opportunities that permit bumping of interruptible
shippers at least until the time the bumping notice under the
modified NAESB Intraday 2 Nomination schedule is issued at 5:30 p.m.
CCT. NOPR, 146 FERC ] 61,201 at P 73. The modified NAESB Intraday 3
Nomination Cycle guarantees that any bumped interruptible shipper
will have an opportunity to renominate its bumped volumes at 7:00
p.m. CCT. If a pipeline proposes enhanced nomination services that
permit bumping of interruptible services after 5:30 p.m. CCT, the
Commission will consider the proposal on a case-by-case basis to
determine whether such proposal provides an adequate subsequent
opportunity to renominate any bumped volumes. Id.

---------------------------------------------------------------------------

    106. Some commenters suggest that because firm service has a higher
priority than interruptible service, firm shippers should always be
able to bump interruptible service, and more generally, that all
nomination cycles should be bumpable. We find sufficient support for
retaining a no-bump cycle and respecting the gas industry consensus
that was achieved.\175\ As several commenters maintain, and as the
Commission has previously recognized, interruptible shippers need some
stability in the nomination system. In Order No. 587-G, the Commission
accepted a consensus of the gas industry, including both firm and
interruptible shippers, and accepted standards that provide that the
last intraday nomination opportunity would not permit bumping of
interruptible service. In adopting this standard, the Commission
recognized that making the last intraday nomination opportunity no-bump
would provide stability to the nomination system.\176\ Moving the last
bump cycle to later in the day helps to accommodate the needs of the
firm shippers, while maintaining the No-Bump Rule during NAESB's
Intraday 3 Nomination Cycle will provide stability for interruptible
shippers. As such, we find that it achieves a reasonable balance of
interests.
---------------------------------------------------------------------------

    \175\ Standards for Business Practices of Interstate Natural Gas
Pipelines, Order No. 587, 61 FR 39053 (July 26, 1996), FERC Stats. &
Regs., Regulations Preambles ] 31,038 (July 17, 1996) (``Since it is
the industry that must operate under these standards, deferring to
the considered judgment of the consensus of the industry is both
reasonable and appropriate'').
    \176\ Order No. 587-G, FERC Stats. & Regs., ] 31,062, order on
reh'g, Order No. 587-I, 63 FR 53565, 53569 (Oct. 6, 1998), FERC
Stats. & Regs., Regulations Preambles 1996-2000 ] 31,067 (1998).
---------------------------------------------------------------------------

    107. While NAESB's modified standards represent an improvement over
the currently effective standards, we continue to recognize that
additional intraday nomination opportunities could promote more
efficient use of existing pipeline infrastructure and provide
additional operational flexibility to all pipeline shippers, including
gas-fired generators. The modified NAESB standards reflect reduced
intraday processing times from the current NAESB standards (i.e., three
hours instead of the current four hours), and existing operational
limitations, including the manual processes utilized by pipelines for
processing nominations, may affect the ability of the gas industry to
add additional standard nomination cycles applicable to all shippers.
However, the use of computerized scheduling would appear to provide an
opportunity for faster and more frequent scheduling of intraday
nominations for those shippers and their confirming parties willing to
commit to scheduling electronically. We request that gas and electric
industries, through NAESB, explore the potential for faster,
computerized scheduling when shippers and confirming parties all submit
electronic nominations and confirmations, including a streamlined
confirmation process if necessary. Providing such an option would
enable those entities that need greater scheduling flexibility to have
their requests processed expeditiously.

V. DSPS Proposal

A. Background

    108. In its proposal, DSPS asserts that the fundamental issue in
the Desert Southwest is that firm transportation shippers do not have
the necessary tools to access their firm transportation capacity in
order to properly respond to operating contingencies, including
unexpected changes in renewable generation, that occur during their
evening peak demand period. DSPS suggests that three Commission
policies preclude firm shippers in the Desert Southwest from accessing
their transportation capacity during their evening peak demand period.
First, DSPS states that the intraday nomination cycles do not align
with the evening peak periods of demand in the Desert Southwest which
occur between 7:00 p.m. and 9:00 p.m. CCT. Second, DSPS states that the
rule that interruptible service cannot be bumped in the last intraday
nomination cycle precludes firm transportation shippers from accessing
their transportation capacity during the evening peak period if an
interruptible shipper is already flowing gas on the system. Finally,
DSPS states that the Commission's rule that, once scheduled, secondary
firm service cannot be bumped in any subsequent nomination cycle,\177\
also interferes with the ability of firm shippers to schedule primary-
firm service after the Timely Nomination Cycle. DSPS states that it is
concerned that some shippers are contracting for primary firm
transportation rights on unused pipeline paths and then scheduling
secondary firm service on a more heavily used path outside their
primary path in the Timely or Evening Nomination Cycles. DSPS states
that this blocks shippers holding primary firm rights to the more
heavily used path, including DSPS members, from using their primary
firm service in subsequent nomination cycles.
---------------------------------------------------------------------------

    \177\ The Commission's long standing policy on firm service is
that once scheduled, whether at primary or secondary points, the
service may not be bumped by a nomination by another firm shipper.
---------------------------------------------------------------------------

    109. DSPS notes that geographical factors also present unique
challenges in the Desert Southwest. DSPS indicates that the Desert
Southwest does not have local market area gas storage which makes it
difficult to respond to unexpected changes in demand. Further, DSPS
contends that the Desert Southwest is the home of a growing percentage
of renewable energy resources. DSPS claims that electric utilities
require both the transportation capacity and the natural gas commodity
be available to respond to the immediate generation demands caused by
the drop in renewable energy.
    110. Accordingly, DSPS proposes changes on a national basis and on
a regional basis, as discussed below.

B. DSPS's Proposed National Changes

    111. On a national basis, DSPS requests that the Commission: (1)
Start the Evening Nomination Cycle at 7:00 p.m. CCT (instead of 6:00
p.m. CCT, as in both the NOPR and NAESB's revised standards); and (2)
modify the Commission's policy on natural gas scheduling priority to
allow primary-firm shippers to bump secondary firm shippers during the
Evening Nomination Cycle. DSPS contends that moving the Evening
Nomination Cycle to 7:00 p.m. CCT provides a timely opportunity to
address operating contingencies. DSPS also contends that, unlike the
alternative of establishing a bumpable 7:00 p.m. CCT intraday
nomination cycle, this proposal dispenses with the concerns surrounding
interrupting flowing gas, the need for a subsequent no-bump cycle, and
the fact such a late intraday nomination cycle would have little value
due to the elapsed pro-rata flow of the gas. DSPS asserts that its
proposal to modify the Commission's policy on secondary firm
nominations would increase the value of firm contracts involving
primary points and encourage long-term contracting, which in turn
promotes infrastructure development.
1. Comments
    112. In its October 15, 2014 notice, the Commission specifically
sought comment on the DSPS proposals. None of the commenters on DSPS's
proposal support DSPS's proposal to change the Evening Nomination Cycle
from 6:00

p.m. to 7:00 p.m. CCT.\178\ While most commenters oppose modifying
Commission policy to permit primary-firm nominations to bump secondary
firm nominations in the Evening Nomination Cycle, a few commenters
support this proposal.
---------------------------------------------------------------------------

    \178\ ACES Comments at 13; AGA Comments at 33; Dominion Comments
at 12-13; Enhanced Reliability Coalition Comments at 32-33; EPSA
Comments at 8; INGAA Comments at 9-10; IPAA Comments at 3; Kinder
Morgan Comments at 10; National Grid Comments at 5; New England LDCs
Comments at 32; Natural Gas Council Comments at 6; NGSA Comments at
22; PGC Comments at 8; Sequent Comments at 6; Southwest IS Comments
at 2-3; Transwestern Comments at 4; WBI Energy Comments at 7.
---------------------------------------------------------------------------

    113. Many of those commenters opposing the DSPS proposal to change
the Evening Nomination Cycle contend that the change is contrary to the
NAESB efforts to establish a coordinated nomination and scheduling
timeline.\179\ PGC states that during the NAESB discussion and voting
process, a 7:00 p.m. CCT Evening Nomination Cycle was thoroughly vetted
and ultimately rejected by a majority of the industry
participants.\180\ Other commenters state that the proposed time would
coincide with the start of the NAESB Intraday 3 Nomination Cycle.\181\
Several commenters also state that DSPS has not sufficiently explained
why its proposed 7:00 p.m. Evening Nomination Cycle would address its
concerns about operating contingencies occurring in the late afternoon
of a Gas Day as nominations made during the Evening Nomination Cycle
are for gas flow on the following Gas Day.\182\
---------------------------------------------------------------------------

    \179\ See, e.g., INGAA Comments at 9-10; National Grid Comments
at 5; New England LDCs Comments at 32; PGC Comments at 8;
Transwestern Comments at 4.
    \180\ PGC Comments at 9.
    \181\ See, e.g., AGA Comments at 33; BHE Comments at 6-7;
Dominion Comments at 12-13.
    \182\ See, e.g., Dominion Comments at 12-13; PGC Comments at 9;
Southwest IS Comments at 6.
---------------------------------------------------------------------------

    114. With respect to DSPS's proposal to change the scheduling
priority of secondary firm/alternate nominations in the Evening
Nomination Cycle, NGSA and PGC contend the DSPS proposal would de-value
secondary firm service \183\ and AGA argues that the DSPS proposal
would adversely affect gas customers by reducing revenues from
secondary market sales that are used to mitigate the costs of holding
firm capacity.\184\
---------------------------------------------------------------------------

    \183\ NGSA Comments at 23; PGC Comments at 10.
    \184\ AGA Comments at 34.
---------------------------------------------------------------------------

    115. Several pipelines state that the proposal to allow primary-
firm nominations to bump secondary firm nominations in the Evening
Nomination Cycle would also negatively affect pipeline operations.\185\
INGAA states that pipeline operators need sufficient time after
scheduling nominations, based on priority, to set up the pipeline
system for the next Gas Day. INGAA contends that the adoption of the
DSPS's proposal effectively would shift this work from the period
following the Timely Nomination Cycle to the period following the
Evening Nomination Cycle because firm shippers will have little or no
reason to submit primary firm nominations prior to the Evening
Nomination Cycle. WBI and INGAA further note that the DSPS proposal
would move the major confirmation and scheduling period outside of
normal business hours, making it more difficult for a pipeline operator
to confirm a shipper's nomination with receipt and delivery point
operators, producers and shippers.
---------------------------------------------------------------------------

    \185\ INGAA Comments at 11-12; Kinder Morgan Comments at 11; WBI
Comments at 7.
---------------------------------------------------------------------------

    116. Similarly, PGC and INGAA assert that delaying the posting of
scheduled quantities until 10:00 p.m. CCT would cause uncertainty among
firm shippers until after business hours, when few suppliers are
staffed sufficiently to reroute or resell gas and the commodity market
is not liquid, to learn whether the shipper's gas was scheduled to flow
the next Gas Day or be bumped.\186\
---------------------------------------------------------------------------

    \186\ PGC Comments at 11; INGAA Comments at 11-12.
---------------------------------------------------------------------------

    117. Kinder Morgan notes that NAESB has recently developed capacity
release standards (in conjunction with moving the Timely Nomination
Cycle back to 1:00 p.m.) that will allow shippers to acquire released
capacity in time to be nominated in the Timely Nominated Cycle.\187\
Kinder Morgan states that the DSPS proposal would negate the benefit of
this enhancement.
---------------------------------------------------------------------------

    \187\ Kinder Morgan Comments at 12.
---------------------------------------------------------------------------

    118. Southern Company supports allowing primary-firm nominations to
bump secondary firm nominations in the Evening Nomination Cycle.\188\
Southern Company suggests that a critical component of its plans for
providing reliable, cost-effective electricity supply to customers
calls for the maintenance of firm gas transportation and storage
capacity to serve its gas-fired generators. Southern Company suggests
that the value of holding firm transportation service to serve gas-
fired generators is undermined, however, when an electric generator
attempts to react to changes in demand only to find its contracted firm
transportation capacity unavailable as a result of other shippers'
prior, secondary firm nominations. Southern Company believes the
current policy sends the wrong signal to market participants who might
otherwise choose to invest in firm service if they could be confident
of their rights to exercise it as needed.
---------------------------------------------------------------------------

    \188\ Southern Companies at 11-12.
---------------------------------------------------------------------------

    119. Along the same lines, TVA argues that secondary out-of-path
service should have no higher priority than interruptible
transportation.\189\ TVA states that its access to its firm, in-path
capacity is being jeopardized by shippers contracting for firm
transportation on pipeline paths that do not deliver to their markets
and subsequently nominating secondary firm transportation outside their
primary path on a perpetual basis. This practice limits primary firm
shippers' ability to utilize their capacity after the Timely Nomination
Cycle. TVA states that capacity is only built to support the primary
path of firm transportation contracts and will not materialize when a
shipper contracts for a specified firm transportation path, but chooses
to nominate and flow on an entirely unrelated path.
---------------------------------------------------------------------------

    \189\ TVA Comments at 4.
---------------------------------------------------------------------------

    120. Many commenters support consideration of the DSPS proposal on
a regional basis by individual pipelines.\190\ Transwestern states that
the proposal is workable and has been adopted on other pipelines.\191\
---------------------------------------------------------------------------

    \190\ See, e.g., Dominion Comments at 13; Enhanced Reliability
Coalition at 31-32; Sequent Comments at 6; NGSA Comments at 22.
    \191\ Transwestern Comments at 4-5.
---------------------------------------------------------------------------

2. Commission Determination
    121. The Commission declines to adopt DSPS' proposal to move the
Evening Nomination Cycle to 7:00 p.m. CCT or to modify the Commission's
policy on natural gas scheduling priority to require all pipelines to
permit primary firm nominations to bump secondary firm nominations in
the Evening Nomination Cycle.
    122. With respect to the proposed change to the Evening Nomination
Cycle, DSPS fails to make clear how moving the start time of the
Evening Nomination Cycle one hour later to 7:00 p.m. CCT provides
shippers in its region with a more timely opportunity to address
operating contingencies that arise fourteen hours later during the Gas
Day. Starting the Evening Nomination Cycle at 7:00 p.m. CCT does not
appear to address DSPS's concerns with demand fluctuations, given that
the Evening Nomination Cycle is for gas scheduled to flow the next Gas
Day, not the current Gas Day. Also, under DSPS' proposal, the Evening
Nomination Cycle would occur at the same time as

NAESB's Intraday 3 Nomination Cycle. Given the wide support for the
revised NAESB Evening Nomination Cycle and the largely unexplained
benefits of moving the Evening Nomination Cycle later, we find that
making such a change to the Evening Nomination Cycle is unwarranted.
    123. Regarding modifying Commission policy to require all pipelines
to permit primary firm nominations to bump scheduled secondary firm
service in the Evening Nomination Cycle, the Commission finds that the
benefits of that proposal do not outweigh the burdens that would be
placed on all interstate pipelines and secondary firm shippers as a
result of such proposal. Based on the comments, allowing primary firm
to bump secondary firm would move the major confirmation and scheduling
period outside of normal business hours, making it more difficult for a
pipeline operator to confirm a shipper's nomination with point
operators, producers and shippers. It could also disrupt the liquid
secondary market for capacity by reducing the value of obtaining
released capacity. For these reasons, the Commission declines to adopt
this proposal on a national basis.

C. 1-Year Pilot Program

    124. DSPS also requests that Commission require, on a 1-year pilot
program basis, the pipelines serving the Desert Southwest (i.e., El
Paso Natural Gas, Transwestern and TransCanada-North Baja Pipelines) to
allow firm shippers experiencing an unexpected increase in demand
during the evening of the current Gas Day to submit a separate ``retro/
make-up'' nomination during the Evening Nomination Cycle that would not
take effect until the start of the next Gas Day but would make up for
the unscheduled service they take during the current Gas Day. DSPS also
proposes that the Pilot Program: (a) Provide that imbalance charges/
penalties only apply to imbalances that are not corrected by gas that
flows at the start of the Gas Day; and (b) prohibit shippers from
submitting a combination of a retro/make-up nomination and a daily
nomination that exceeds the shipper's Maximum Daily Quantity of its
firm contract. DSPS states that, by allowing a retro/make up nomination
to be submitted in the Evening Nomination Cycle, the firm shipper would
be ensuring that the gas it uses to address the operating contingency
would be injected into the pipeline beginning at the start of the next
Gas Day.
1. Comments
    125. Kinder Morgan states that its pipelines that serve the DSPS
stakeholders have been engaged in discussions with DSPS regarding their
unique issues.\192\ Kinder Morgan states that the regional needs of the
DSPS are best addressed on a pipeline-specific basis. Kinder Morgan
also notes that El Paso has previously added additional nomination
intraday cycles and offers various types of hourly services. Kinder
Morgan states that the DSPS pilot program incorrectly assumes that
pipelines have available unused capacity or other flexibility that
would allow a shipper to unilaterally take whatever amount of gas it
wants at 7:00 p.m. CCT and that the pipeline would entertain a retro or
make-up nomination recognizing the shipper took the gas and returned it
to the pipeline later. Kinder Morgan states that this proposal poses
substantial problems for a pipeline by requiring the pipeline to keep
the shipper whole for a good portion of the 24-hour Gas Day, placing
its other deliveries at risk. Kinder Morgan states that in actuality
this type of transaction calls for a no-notice type of transportation
service and potentially requires new facilities, including storage.
---------------------------------------------------------------------------

    \192\ Kinder Morgan Comments at 12.
---------------------------------------------------------------------------

    126. Transwestern states that, while further clarification is
needed as to exactly what DSPS intends, Transwestern is willing to work
with DSPS and other regional entities to structure retro/make-up
nominations and help customers manage their loads in view of the unique
operating circumstances of the Desert Southwest.\193\
---------------------------------------------------------------------------

    \193\ Transwestern Comments at 5.
---------------------------------------------------------------------------

2. Commission Determination
    127. As noted elsewhere in this Final Rule, regional solutions may
work best to address certain needs arising from increased use of
natural gas. While the Commission will not require the pipelines
serving the Desert Southwest (i.e., El Paso Natural Gas, Transwestern
and TransCanada-North Baja Pipelines) to implement DSPS's proposed 1-
year pilot program, we encourage continued discussion in the region.
The record here is insufficient for the Commission to require the
pipelines to institute DSPS' requested pilot program of make-up
nominations. The comments of the pipelines affected by this proposal
indicate that they are uncertain of the operational feasibility of
instituting a make-up nomination, but are interested in discussing this
issue further with the DSPS shippers. Given the comments, we lack any
evidence that requiring these pipelines to offer make-up nominations
during the Evening Nomination Cycle is operationally feasible for all
the pipelines. However, one or more pipelines appear willing to discuss
potential service offerings that may help Desert Southwest shippers and
we encourage those discussions to proceed.

VI. Multi-Party Transportation Contracts

A. Background

    128. The Commission's regulations require that all transfers of
firm pipeline capacity from one shipper to another shipper take place
pursuant to the capacity release program in section 284.8 of our
regulations to ensure that such capacity transfers are transparent and
not unduly discriminatory.\194\ Utilizing capacity release to
effectuate sharing of capacity between entities can make sharing of
capacity less efficient due to the need to comply with the capacity
release posting and bidding requirements, as well as the need for the
replacement shipper to enter into a contract with the pipeline for each
release. In recent years, however, the Commission has accepted several
pipeline proposals to offer multiple shippers the option of entering
into a single contract for transportation service, with a single agent
or asset manager managing the capacity under the contract.\195\ As
approved by the Commission, this option permits several shippers to
share the subject capacity without the need to use the capacity

release program to transfer the capacity among themselves. In order to
satisfy the Commission's shipper-must-have-title policy, the pipelines
proposed, and the Commission accepted, tariff provisions ensuring that
each shipper under a multi-party transportation contract agree to be
jointly and severally liable for all obligations of all shippers and
the agent under the single service agreement.\196\ The Commission has
permitted multi-party transactions even when the shippers under such an
agreement are not affiliated with one another.\197\
---------------------------------------------------------------------------

    \194\ See Pipeline Service Obligations and Revisions to
Regulations Governing Self-Implementing Transportation and
Regulation of Natural Gas Pipeline After Partial Wellhead Decontrol,
Order No. 636, FERC Stats. & Regs. ] 30,939, at 30,416-20, order on
reh'g, Order No. 636-A, FERC Stats. & Regs. ] 30,950, at 30,554
(1992). See also Regulation of Short-Term Natural Gas Transportation
Services and Regulation of Interstate Natural Gas Transportation
Services, Order No. 637, FERC Stats. & Regs. ] 31,091, at 31,300
(2000).
    \195\ Southern Natural Gas Co., 124 FERC ] 61,145 (2008)
(Southern) (pipeline modified Rate Schedule FT to allow a single
contract option for multiple shippers affiliated with a single agent
or asset manager); Florida Gas Transmission Co., LLC, 128 FERC ]
61,284 (2009), order on compliance filing, Docket No. RP09-922-001
(Nov. 17, 2009) (delegated letter order) (pipeline modified
provisions of Rate Schedules FT and IT to allow a single contract
option for multiple shippers that have designated a single agent on
their behalf); Transcontinental Gas Pipe Line Corp., Docket No.
RP10-1099-000 (Sept. 14, 2010) (delegated letter order) (pipeline
modified provisions of Rate Schedules IT, PAL and Pooling, and ICTS
to allow a single contract option for multiple shippers that have
designated a single agent on their behalf); Tennessee Gas Pipeline
Co., L.L.C., 142 FERC ] 61,200 (2013) (Tennessee) (pipeline modified
provisions of Rate Schedules FT, IT and PAL to allow a single
contract option for multiple shippers that have designated a single
agent on their behalf).
    \196\ See, e.g., Southern, 124 FERC ] 61,145 at P 12. As the
Commission explained, multi-party contracts must include joint and
several liability to comply with the Commission's shipper-must-have-
title policy. Without joint and several liability, shippers under
the multi-party contracts that are not liable for the total charges
under the agreement would be in violation of the Commission's
shipper-must-have-title policy to the extent they used capacity in
excess of that for which they were liable to pay.
    \197\ See, e.g., Florida Gas Transmission Co., LLC, 126 FERC ]
61,055 (2009).
---------------------------------------------------------------------------

    129. This contracting flexibility has been utilized by entities to
meet their collective load obligations in a more efficient manner. For
example, certain affiliated utilities of Southern Company, which have
long operated as an integrated public utility electric system through
the joint commitment and economic dispatch of their gas-fired
generating resources, have entered into a single interstate natural gas
pipeline transportation service agreement, with Southern Company
Services (their affiliated agent) arranging for the gas supplies used
in their generating facilities.\198\ Under this single transportation
service agreement, on any given day Southern Company Services can use
up to its overall contractual entitlement under the service agreement
to provide service to any one of its affiliated utilities.
---------------------------------------------------------------------------

    \198\ See, e.g., Southern Natural Gas Co., Transmittal, Docket
No. RP01-205-016 (May 14, 2009); Southern, 124 FERC ] 61,145. The
affiliates were Alabama Power Company, Georgia Power Company, Gulf
Power Company, Mississippi Power Company, Savannah Electric and
Power Company and Southern Power Company.
---------------------------------------------------------------------------

B. NOPR Proposal

    130. The NOPR proposed to revise Part 284 of the Commission's
regulations to require interstate natural gas pipelines that offer firm
transportation service under subpart B or G of Part 284 to allow
multiple shippers associated with a designated agent or asset manager
to be jointly and severally liable under a single firm transportation
service agreement, subject to reasonable terms and conditions.
Consistent with the multi-party contract tariff provisions the
Commission previously approved, the NOPR stated that such reasonable
terms and conditions may include requirements that: (1) The shippers
and agent demonstrate their agency relationship in writing; and (2) the
shippers are willing to be treated collectively as one shipper for
nomination, allocation, and billing purposes under the contract.
    131. As explained in the NOPR, the use of shared capacity can make
the purchase of firm pipeline capacity more affordable, including for
gas-fired generators. For example, a gas-fired generator could decide
to defray its pipeline capacity costs by sharing capacity among a
number of generators or by sharing capacity with a LDC that has
differing peak needs for natural gas transportation service. Similarly,
an industrial plant, which has a relatively constant need for gas when
its plant is operating but which has the flexibility to reduce its
operations and gas usage on relatively short notice, could arrange to
share its capacity with another shipper, such as a gas-fired generator,
which only needs gas during short intervals and which has less control
over when it runs. Permitting such entities to enter into a single
contract with the pipeline gives those entities the flexibility to
choose contracting partners with complementary needs for pipeline
capacity and to enter into an ongoing contractual relationship
concerning how they will share the capacity.
    132. The Commission's NOPR proposal would only require pipelines to
offer multi-party service agreements for firm service because a primary
benefit of such service agreements is that they permit entities to
share firm capacity without the need to engage in capacity releases.
However, in recognition of the fact that some pipelines currently offer
multi-party service agreements to interruptible customers as well, the
Commission requested comment on whether it should also require
pipelines to offer multi-party service agreements for interruptible
transportation service.

C. Comments

    133. Ten commenters either support or do not oppose the NOPR
proposal.\199\ They contend that the proposal will provide shippers,
including gas-fired generators, with greater flexibility and facilitate
more efficient use of pipeline capacity.
---------------------------------------------------------------------------

    \199\ AGA Comments at 37-38; AGLR LDCs Comments at 3; Duke
Comments at 4-5; FirstEnergy Comments at 9; MSCG Comments at 18;
National Grid Comments at 5; New England LDCs at 34; NiSource
Comments at 3; PUCO Comments at 8-9; Southern Star Comments at 6.
---------------------------------------------------------------------------

    134. Many commenters express varying degrees of qualified support
for the NOPR proposal.\200\ IOGA asserts that the concept could be
valuable not just for gas-fired generators, but also for small
producers as an alternative to interruptible transportation and a tool
to help optimize capacity and ensure that they have a firm outlet for
gas.\201\ IOGA, along with EnerVest, urges the Commission, however, to
grant blanket waivers of the shipper-must-have-title policy in order to
facilitate multi-party transportation agreements.\202\ Several
commenters argue that the Commission should leave it to individual
pipelines to propose such services in response to customer needs.\203\
INGAA states that even on pipelines that currently allow multi-party
contracts, customer response has been limited.\204\ INGAA requests that
the Commission either reconsider the addition of section
284.12(b)(1)(v) to the Commission's regulations or modify the
regulatory text to provide that:
---------------------------------------------------------------------------

    \200\ AF&PA Comments at 4; BHE Comments at 17-18; EnerVest
Comments at 7; IECA Comments at 2-4; INGAA Comments at 32-33; IOGA
Comments at 5-6; Kinder Morgan Comments at 15; NGSA Comments at 24-
25; PGC Comments at 7; Spectra Comments at 9.
    \201\ IOGA Comments at 5-6.
    \202\ EnerVest Comments at 7-8; IOGA Comments at 6.
    \203\ Dominion Comments at 28-29; INGAA Comments at 31-32;
Kinder Morgan Comments at 14-16; Southern Comments at 13.
    \204\ INGAA Comments at 31.

    Within 60 days upon a shipper request, a pipeline will file to
make appropriate tariff changes at the Commission to allow multiple
shippers associated with a designated agent or asset manager to be
jointly and severally liable under a single firm transportation
service agreement, subject to reasonable terms and conditions.
---------------------------------------------------------------------------
(emphasis added)

    135. AF&PA, IECA, NGSA, and PGC support the concept of making
multi-party transportation contracts more widely available, provided
that the Commission can ensure that multi-party contracts are
transparent, do not adversely affect existing shippers, comply with all
pipeline tariffs, and do not unduly discriminate against other
shippers.\205\ Along those lines, AF&PA, IECA, and PGC urge the
Commission to clarify that individual shippers must be publicly
disclosed, not just the designated contract agent or asset manager
under the multi-party transportation contract.\206\ AF&PA, IECA, and
NGSA also suggest that the

Commission should closely monitor and take action if increased
utilization of multi-party contracts substantially reduces the
competitiveness of the secondary market.\207\
---------------------------------------------------------------------------

    \205\ AF&PA Comments at 3-5; IECA Comments at 2-4; NGSA Comments
at 24-26; PGC Comments at 6-8.
    \206\ AF&PA Comments at 3-5; IECA Comments at 2-4; PGC Comments
at 6-8.
    \207\ AF&PA Comments at 3-5; IECA Comments at 2-4; NGSA Comments
at 24-26.
---------------------------------------------------------------------------

    136. Other commenters urge the Commission to require certain
provisions that have already been approved in other proceedings
involving multi-party transportation contracts (e.g., shippers and
agents must demonstrate their agency relationship in writing).\208\ BHE
supports the NOPR proposal, provided the affected interstate natural
gas pipelines are adequately protected financially by way of
creditworthiness terms and conditions.\209\
---------------------------------------------------------------------------

    \208\ See, e.g., INGAA Comments at 32-33; Kinder Morgan Comments
at 15; Spectra Comments at 9.
    \209\ BHE Comments at 18.
---------------------------------------------------------------------------

    137. Several commenters who support the concept of multi-party
transportation contracts, nevertheless request a number of
clarifications regarding the terms and conditions of service for multi-
party transportation contracts. MSCG urges the Commission to clarify
scenarios involving liability, events of default, billing and payment,
and shipper-must-have-title.\210\ NGSA requests several clarifications
on confidentiality and the consolidation of existing agreements into a
single multi-party transportation contract.\211\ Puget requests that
the Commission clarify how capacity and costs are shared amongst the
parties under a multi-party transportation agreement.\212\
---------------------------------------------------------------------------

    \210\ MSCG Comments at 18-19.
    \211\ NGSA Comments at 26.
    \212\ Puget Comments at 31-32.
---------------------------------------------------------------------------

    138. Some commenters assert that the Commission should convene
technical conferences or workshops or perform further evaluation to
further explore some of the issues discussed above and other
implementation issues before adopting the proposed regulation.\213\
---------------------------------------------------------------------------

    \213\ Dominion Comments at 28-29; EEI Comments at 5-6; Exelon
Comments at 12; Puget Comments at 32; Sequent Comments at 9-10;
Southern Comments at 13-14.
---------------------------------------------------------------------------

    139. Idaho Power, Sequent, and Tenaska oppose the NOPR proposal,
arguing that multi-party transportation contracts will not offer any
additional benefits to the reliability of gas supply to generators than
the Commission's current capacity release program or current pipeline
service offerings.\214\ For example, Tenaska asserts that the NOPR's
proposal would carve out an exception to the capacity release rules for
multi-party transportation contracts and would depart from the goals of
the program, including those regarding transparency, allocation to the
party that values the released capacity the most, and by allowing
private groups to control a certain amount of capacity outside of the
capacity release process.\215\ Tenaska also states that the NOPR
proposal does not address whether or how any amount of the shared
capacity, once under a multi-party transportation contract, can be re-
released, or whether the designated agent or Asset Manager may use the
capacity.
---------------------------------------------------------------------------

    \214\ Idaho Power Comments at 2; Sequent Comments at 8; Tenaska
Comments at 5.
    \215\ Tenaska Comments at 6-7.
---------------------------------------------------------------------------

    140. Sequent is concerned that the parties to a multi-party service
agreement could receive preferential treatment or status over non-
multi-party capacity bidders in terms of capacity allocation, posting
and bidding rules (including those for affiliates), credit
requirements, application of shipper-must-have-title policy,
prohibition on buy-sell arrangements, tying and other capacity release
requirements. Sequent also requests clarification regarding open
seasons and the consolidation of existing transportation agreements
into a single multi-party transportation contract.\216\
---------------------------------------------------------------------------

    \216\ Sequent Comments at 9.
---------------------------------------------------------------------------

    141. In response to the NOPR's question regarding whether the
Commission should require pipelines to offer multi-party interruptible
contracts, AF&PA, Duke, EnerVest, NGSA, and PGC support or do not
oppose offering multi-party transportation contracts for interruptible
service.\217\ However, Dominion, INGAA, and Kinder Morgan argue against
it.\218\ EnerVest argues that, in the case of affiliated capacity-
sharing shippers, allowing a single affiliated agent or asset manager
to interface with the pipeline in connection with interruptible
transportation services would provide potential administrative benefits
for both shippers and pipelines alike, and would contribute to greater
efficiency in overall utilization of total interstate natural gas
pipeline transportation capacity.\219\ To the contrary, INGAA argues
that an interruptible transportation multi-party service agreement
would not provide generators with any additional ability to offset the
costs of holding an interruptible transportation contract, since there
are none, and would not provide any additional incentives for
generators to enter into an interruptible transportation agreement,
since that incentive is there already.\220\ Dominion makes similar
arguments.\221\
---------------------------------------------------------------------------

    \217\ AF&PA Comments at 5; Duke Comments at 5; EnerVest Comments
at 9; NGSA Comments at 26; PGC Comments at 7 & n.7.
    \218\ Dominion Comments at 29; INGAA Comments at 33-34; Kinder
Morgan Comments at 16.
    \219\ EnerVest Comments at 9.
    \220\ INGAA Comments at 33-34.
    \221\ Dominion Comments at 29.
---------------------------------------------------------------------------

D. Commission Determination

    142. In this Final Rule, the Commission adopts section
284.12(b)(1)(iii) as proposed in the NOPR, with the modification
requested by INGAA. Instead of requiring all interstate pipelines at
this time to modify their tariffs to offer multi-party firm
transportation contracts, the Commission will only require pipelines to
offer such an option if requested to do so by a shipper. Specifically,
section 284.12(b)(1)(iii) as adopted in this Final Rule, requires that
within 60 days of a shipper request, a pipeline must file to make
appropriate tariff changes to allow multiple shippers associated with a
designated agent or asset manager to be jointly and severally liable
under a single firm transportation service agreement, subject to
reasonable terms and conditions.
    143. As noted by many commenters, the availability of multi-party
firm transportation contracts will provide shippers, including gas-
fired generators, with greater flexibility and facilitate more
efficient use of pipeline capacity. In addition, section
284.12(b)(1)(iii) as adopted ensures that pipelines are responsive to
shipper requests when, and if, a shipper is interested in pursuing a
multi-party transportation agreement, while not requiring pipelines to
implement tariff provisions offering that option where there is no
shipper interest. Postponing implementation in this regard would not
appear to unduly delay use of multi-party transportation contracts by
interested shippers given the time necessarily involved in finalizing a
multi-party arrangement,
    144. Upon an individual pipeline's filing to implement multi-party
transportation contracts, customers and other interested persons will
have the opportunity to raise any concerns regarding the pipeline's
filing, including any accompanying terms and conditions proposed by the
individual pipeline. Commenters who have raised questions or requested
clarifications in this proceeding regarding accompanying terms and
conditions, such as creditworthiness, capacity release, open seasons,
existing agreements, events of default, liability, and billing and
payment, will have the opportunity to seek such clarifications in the
individual pipeline proceedings, thereby giving the individual pipeline

the first opportunity to address any such concerns.
    145. Tenaska and other commenters raise concerns regarding
transparency and the impact of the multi-party transportation contracts
on the capacity release market. In recent years, the Commission has
accepted several pipeline proposals to offer multiple shippers the
option of entering into a single contract for transportation service,
with a single agent or asset manager managing the capacity under the
contract.\222\ The Commission has received no indication of any
problems surrounding such multi-party transportation contracts or of a
negative impact on the capacity release market resulting from such
contracts. Furthermore, as INGAA notes, customer use of such contracts
has been limited.\223\ There are also safeguards in the revised
regulatory text and under existing regulations. The revised regulatory
text requires shippers under a multi-party contract to be jointly and
severally liable in order to satisfy the Commission's shipper-must-
have-title policy, thereby limiting the option to shippers who value
the capacity sufficiently to agree to be liable for all payments under
the contract. Commission regulations also require that all interstate
pipelines must publicly post information regarding any contract for
firm transportation, or revision thereto, including shipper name and
the rate charged under the contract.\224\ Interstate pipelines would
continue to have this obligation with respect to multi-party
transportation contracts, including posting the name of each shipper
that is a party to the multi-party contract. With respect to concerns
about undue discrimination or preference, section 4(b) of the NGA
prohibits undue discrimination or preference by interstate pipelines.
On balance, the Commission believes that the regulation adopted by this
Final Rule, together with existing safeguards, strikes a reasonable
balance between offering shippers greater contracting flexibility and
protecting other shippers, as well as the pipeline. The Commission will
also continue to monitor the use of multi-party transportation
contracts.
---------------------------------------------------------------------------

    \222\ See, e.g., Southern, 124 FERC ] 61,145; Florida Gas, 128
FERC ] 61,284, order on compliance filing, Docket No. RP09-922-001
(Nov. 17, 2009) (delegated letter order); Transcontinental Gas Pipe
Line Corp., Docket No. RP10-1099-000 (Sept. 14, 2010) (delegated
letter order); Tennessee, 142 FERC ] 61,200.
    \223\ INGAA Comments at 31.
    \224\ See 18 CFR 284.13 (2014).
---------------------------------------------------------------------------

    146. The Commission denies EnerVert and IOGA's alternative request
that the Commission grant a blanket waiver of the shipper-must-have-
title policy to permit shippers to more easily share capacity. As the
Commission has previously explained, the capacity release program was
designed with the shipper-must-have-title rule as its foundation. That
rule ensures that transfers of capacity among shippers must take place
through the capacity release program, thus ensuring that such capacity
transfers are transparent and not unduly discriminatory.\225\
Therefore, the Commission will not grant a generic waiver of the
shipper-must-have-title rule in this rulemaking proceeding. However,
the Commission is open to considering requests for waiver of its
capacity release regulations and/or the shipper-must-have-title rule on
a case-by-case basis, where it is shown that such a waiver would be in
the public interest, for example by assisting natural gas-fired
generators in obtaining access to firm transportation service in a
transparent and not unduly discriminatory manner.\226\
---------------------------------------------------------------------------

    \225\ Order No. 637, FERC Stats & Regs. ] 31,091 at 31,300
(2000).
    \226\ See Georgia Pub. Serv. Comm'n, 107 FERC ] 61,024, at P 36
(2004), reh'g granted in part, denied in part, 110 FERC ] 61,048
(2005), reh'g denied, 111 FERC ] 61,178 (2005), and Promotion of a
More Efficient Capacity Release Market, Order No. 712-A, FERC Stats.
& Regs. ] 31,284, at P 146 (2008), order on reh'g and clarification,
Order No. 712-B, 127 FERC ] 671,051 (2009).
---------------------------------------------------------------------------

    147. Several commenters raise questions regarding the rights and
responsibilities of the individual parties to a multi-party
transportation contract, as well as the responsibilities of the agent
or asset manager. In general, rights and responsibilities related to
the shippers' relationship to the pipeline will be determined by the
individual pipeline's tariff, but rights and responsibilities as
between the shippers and their agent or asset manager, such as how
capacity is allocated between the contracting parties on any given day,
will be determined by the parties and the agent or asset manager to the
transportation contract.
    148. The Commission will not require multi-party service contracts
for interruptible transportation. As INGAA points out, unlike firm
shippers, interruptible shippers do not have any obligation to pay a
monthly reservation charge and only pay transportation charges when
they utilize the service. Thus, there is no existing financial
impediment to generators or others entering into interruptible
transportation contracts. Unlike multi-party contracts for firm
service, an interruptible multi-party transportation contract would not
provide generators with any additional ability to offset the costs of
holding an interruptible transportation agreement. The limited
administrative benefits identified by EnerVest do not appear to warrant
requiring interstate pipelines to provide such contracts for
interruptible transportation.

VII. Notice of Use of Voluntary Consensus Standards

    149. Office of Management and Budget Circular A-119 (Sec.  11)
(February 10, 1998) provides that federal agencies issuing or revising
regulations with a standard should publish a statement in the Final
Rule identifying the adopted standard as being a voluntary consensus
standard or a government-unique standard. In this Final Rule, the
Commission is incorporating by reference voluntary consensus standards
developed by the NAESB 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.\227\
---------------------------------------------------------------------------

    \227\ Pub. L. No. 104-113, 12(d), 110 Stat. 775 (1996), 15
U.S.C. 272 note (1997).
---------------------------------------------------------------------------

VIII. Incorporation By Reference

    150. 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.\228\ The regulations also
require agencies to summarize, in the preamble of the final rule, the
material it incorporates by reference.
---------------------------------------------------------------------------

    \228\ 1 CFR 51.5 (2014). See Incorporation by Reference, 79 FR
66267 (Nov. 7, 2014).
---------------------------------------------------------------------------

    151. The NAESB standards being incorporated by reference in this
Final Rule are summarized in P 23, 87, 104. Our regulations provide
that copies of the NAESB standards incorporated by reference may be
obtained from the North American Energy Standards Board, 801 Travis
Street, Suite 1675, Houston, TX 77002, Phone:<PHONE_NUMBER>. NAESB's
Web site is at http://www.naesb.org/. Copies 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.\229\
---------------------------------------------------------------------------

    \229\ 18 CFR 284.12 (2014).

---------------------------------------------------------------------------

    152. 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.
Participants can join NAESB, for an annual membership cost of only
$7,000, which entitles them to full participation in NAESB and enables
them to obtain these standards at no cost.\230\ Non-members may obtain
the Individual Standards Manual or Booklets for each standard by email
for $250 per manual or booklet, which in the case of these standards
would total $1,000.\231\ Nonmembers also may obtain the complete set of
Standards Manuals, Booklets, and Contracts on CD 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.\232\ In addition, NAESB
considers requests for waivers of the charges on a case by case basis
depending on need. The parties affected by these Commission regulations
are highly sophisticated and have the means to acquire the information
they need to effectively participate in Commission proceedings.
---------------------------------------------------------------------------

    \230\ North American Energy Standards Board Membership
Application, https://www.naesb.org/pdf4/naesbapp.pdf.
    \231\ NAESB Materials Order Form, https://www.naesb.org//pdf/ordrform.pdf.
    \232\ Procedures for non-members to evaluate work products
before purchasing, 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).
---------------------------------------------------------------------------

IX. Information Collection Statement

    153. The collections of information for this Final Rule are being
submitted to the Office of Management and Budget (OMB) for review under
section 3507(d) of the Paperwork Reduction Act of 1995 \233\ and OMB's
implementing regulations.\234\ 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.
---------------------------------------------------------------------------

    \233\ 44 U.S.C. 3507(d) (2012).
    \234\ 5 CFR 1320 (2014).
---------------------------------------------------------------------------

    154. The Commission solicits 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. The burden estimates are for implementing the information
collection requirements of this Final Rule. The Commission asks that
any revised burden estimates submitted by commenters include the
details and assumptions used to generate the estimates.
    155. The collections of information related to this Final Rule fall
under FERC-545 (Gas Pipeline Rates: Rate Change (Non-Formal)) \235\ and
FERC-549C (Standards for Business Practices of Interstate Natural Gas
Pipelines).\236\ The following estimates of reporting burden are
related only to this Final Rule and include the costs to pipelines to:
(1) Incorporate by reference NAESB's modified nomination timeline,
which includes: moving the start of the Timely Nomination Cycle from
11:30 a.m. to 1:00 p.m. CCT and adding an additional intraday
nomination opportunity; and (2) require interstate pipelines to file
tariff changes with the Commission allowing multiple shippers
associated with a designated agent or asset manager to be jointly and
severally liable under a single firm transportation service agreement
within 60 days of receiving a request from a shipper for a multi-party
service agreement.
---------------------------------------------------------------------------

    \235\ FERC-545 covers rate change filings made by natural gas
pipelines, including tariff changes.
    \236\ FERC-549C covers Standards for Business Practices of
Interstate Natural Gas Pipelines.
    \237\ An estimated 165 natural gas pipelines (Part 284 program)
are affected by this Rulemaking. Although the additional intraday
nomination and the revised same-day and day-ahead trading schedules
may affect electric plant operators, the Commission is not imposing
the reporting burden of adopting these standards on those entities.
    \238\ The most recent hourly wage figures are published by the
Bureau of Labor Statistics, U.S. Department of Labor, National
Occupational Employment and Wage Estimates, United States,
Occupation Profiles, May 2013, at http://www.bls.gov/oes/home.htm,
and the benefits are calculated using BLS information, at http://www.bls.gov/news.release/ecec.nr0.htm. Each response to the proposed
regulation in Column 1 is corresponds to a unique respondent.
    \239\ The average hourly burden cost (salary plus benefits)
related to tariff filings is $70.58. This represents the average
wage (salary and benefits) of the following occupational categories:
``Lawyers'' ($128.94 per hour, top 10 percent of wage earners),
``Computer Systems Analyst'' ($58.77 per hour, average composite
hourly wage), and ``Office and Administrative'' ($24.04 per hour,
average composite hourly wage). Wage data is available from the
Bureau of Labor Statistics at http://www.bls.gov/oes/home.htm;
background on the estimate of the benefits component is at http://www.bls.gov/news.release/ecec.nr0.htm.
    \240\ Some of the estimated 165 natural gas pipeline companies
(Part 284 program) may already utilize business practices that
satisfy the NAESB proposal elements of this Rulemaking (e.g.,
provide additional nomination opportunities). In these instances the
full cost of industry compliance is estimated for the total number
of potential respondents.
    \241\ The average (mean) hourly cost of tariff filings and
implementation for interstate natural gas pipelines is $70.58. This
represents the composite wage (salary and benefits) of the following
occupational categories: ``Lawyers'' ($128.94 per hour, top 10
percent of wage earners), ``Computer Systems Analyst'' ($58.77 per
hour, average composite hourly wage), and ``Office and
Administrative'' ($24.04 per hour, average composite hourly wage).
Wage data is available from the Bureau of Labor Statistics at http://www.bls.gov/oes/home.htm; estimate of the benefits component at
http://www.bls.gov/news.release/ecec.nr0.htm.
    \242\ A majority of the 165 potential respondents operate under
tariffs filed with the Commission that include provisions for multi-
party transportation contracts. The Commission expects that
approximately 8 of the 165 potential respondents (five percent),
following an expression of shipper interest, will file tariffs each
year with the Commission that support multi-party transportation
contracts.
---------------------------------------------------------------------------

    Public Reporting Burden:

                                                                    RM14-2 Final Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Number of
                                                              Number of        responses per      Average burden       Total annual    Total annual cost
                                                          respondents \237\      respondent     hours per response     burden hours        ($) \238\
                                                                        (1)                (2)               (3)          (1)x(2)x(3)  .................
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       FERC-545 (OMB Control No. 1902-0154) \239\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Tariff Filing for new and revised Nomination Cycles (one-               165                  1                10                1,650     \241\ $116,457
 time) \240\............................................
Tariff Filing for Multi-Party Service Agreements (one-                    8                  1                10                   80              5,646
 time) \242\............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                          FERC-549C (OMB Control No. 1902-0174)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Implementation of business standards, including process,                165                  1               240               39,600          2,524,500
 procedures, and IT support (one-time) \243\............
Annual operations, including 1 additional intraday                      165                365                 0.5             30,113          1,535,738
 nomination (ongoing) \244\.............................
                                                         -----------------------------------------------------------------------------------------------
    Total one-time (for FERC-545 and FERC-549C).........  .................  .................  ..................             39,680          2,646,603
                                                         -----------------------------------------------------------------------------------------------
    Total ongoing (for FERC-549C).......................  .................  .................  ..................             30,113          1,535,738
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Information Collection Costs: The Commission estimates the total
costs for all respondents to be:
---------------------------------------------------------------------------

    \243\ The average hourly cost is $63.75. This represents the
average wage (salary and benefits) of the following occupational
categories: ``Lawyers'' ($128.94 per hour, top 10 percent of wage
earners), ``Computer Systems Analyst'' ($58.77 per hour, average
composite hourly wage), ``Gas Plant Operator'' ($43.24 per hour,
average composite hourly wage), and ``Office and Administrative''
($24.04 per hour, average composite hourly wage).
    \244\ For ongoing operations, we estimate 0.5 hours per calendar
day per respondent (or 182.5 hours annually per respondent).
    The average hourly cost is $51. This represents the average wage
(salary and benefits) of the following occupational categories:
``Computer Systems Analyst'' ($58.77 per hour), and ``Gas Plant
Operator'' ($43.24 per hour).
---------------------------------------------------------------------------

     Year 1 (including the one-time tariff-filing,
implementation, and ongoing costs): $4,182,341.
     Years 2 and 3, each (ongoing costs only): $1,535,738.
    Title: FERC-545, Gas Pipeline Rates: Rate Change (Non-Formal); and
FERC-549C, Standards for Business Practices of Interstate Natural Gas
Pipelines.
    Action: Proposed revisions to information collections.
    OMB Control Nos.: 1902-0154 (FERC-545) and 1902-0174 (FERC-549C).
    Respondents: Business or other for profit enterprise (Natural Gas
Pipelines).
    Frequency of Responses: One-time filing and implementation and
ongoing.
    Necessity of Information: This Final Rule will upgrade the
Commission's current business practice and communication standards and
supports the availability of multi-party firm contracts for interested
shippers.
    156. In incorporating by reference NAESB's modified nomination
timeline, including moving the start of the Timely Nomination Cycle
from 11:30 a.m. to 1:00 p.m. CCT and adding an additional intraday
nomination opportunity, the Commission intends to provide electric
generators more time to acquire natural gas pipeline transportation, in
order to reduce economic and resource supply constraints, additional
flexibility to all shippers, allows sufficient time for processing,
avoids overlapping nomination cycles, and allows for the accomplishment
of most scheduling work during regular business hours, or reasonably
close thereto.
    157. Broad industry consensus across the natural gas and electric
industries during the NAESB deliberations supports the incorporation of
the modified nomination timeline. The implementation of these standards
and regulations will promote additional efficiency and reliability of
the gas industry's operations.
    158. Finally, wider availability of multi-party firm transportation
contracts provides shippers greater flexibility, including gas-fired
generators, and facilitates the efficient use of pipeline capacity. The
Final Rule ensures that pipelines are responsive to shipper requests
when, and if, a shipper is interested in pursuing a multi-party
transportation contract. As such, this Final Rule does not require
pipelines to implement tariff provisions offering a multi-party
transportation contract option when there is no shipper interest.
    Internal Review: The Commission has reviewed the proposed business
practice standards of natural gas pipelines and has determined that the
proposed revisions are necessary to establish more efficient
coordination between the natural gas and electric industries, and to
provide additional flexibility for all natural gas pipeline shippers.
Requiring such information ensures common business practices for
participants engaged in the sale of electric energy at wholesale and
the transportation of natural gas. 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.
    159. 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_ADDRESS>phone:<PHONE_NUMBER>, fax:<PHONE_NUMBER>].
    160. Comments concerning the collections of information and the
associated burden estimates should be sent to the Commission and to the
Office of Management and Budget, Office of Information and Regulatory
Affairs, Washington, DC 20503 [Attention: Desk Officer for the Federal
Energy Regulatory Commission, telephone:<PHONE_NUMBER>, fax: (202)
395-4718]. For security reasons, comments to OMB should be submitted by
email to<EMAIL_ADDRESS>Comments submitted to OMB should
include OMB Control Numbers 1902-0154 and 1902-0174.

X. Environmental Analysis

    161. 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.\245\ The
Commission concludes that neither an Environmental Assessment nor an
Environmental Impact Statement is required for this Final Rule under
section 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 Natural Gas Act that require no construction of facilities.\246\
---------------------------------------------------------------------------

    \245\ Regulations Implementing the National Environmental Policy
Act, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. &
Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
    \246\ See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), 380.4(a)(27)
(2014).
---------------------------------------------------------------------------

XI. Regulatory Flexibility Act Certification

    162. The Regulatory Flexibility Act of 1980 (RFA) \247\ generally
requires a description and analysis of rules that will have significant
economic impact on a substantial number of small entities. The RFA
mandates consideration of regulatory alternatives that accomplish the
stated objectives of a rule and that minimize any significant economic
impact on a substantial number of small entities. The Small Business
Administration's (SBA) Office of Size Standards develops the numerical
definition of a small business as matched to North American Industry
Classification System Codes (NAICS).\248\ The SBA has established a
size standard for pipelines transporting natural gas, stating that a
firm is a small entity if its annual receipts (including those of its
affiliates) are $27.5 million or less.\249\
---------------------------------------------------------------------------

    \247\ 5 U.S.C. 601-612.
    \248\ 13 CFR 121.101.
    \249\ U.S. Small Business Administration, Table of Small
Business Size Standards for Pipeline Transportation of Natural Gas,
NAICS Code 486210, available at https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf, Subsector 486.
    Matched to North American Industry Classification System Codes,
Natural Gas Pipeline Transportation, NAICS Code 486210, page 27,
July 14, 2014, available at https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf, Subsector 486.
---------------------------------------------------------------------------

    163. This Final Rule applies only to interstate natural gas
pipelines. The Commission estimates that approximately 165 interstate
pipeline entities are potential respondents subject to the data
reporting requirements of FERC-545. For fiscal year 2013, the
Commission estimates that 70 pipelines (42.4 percent of 165 potential
respondents) not affiliated with larger companies had annual revenues
less than $27.5 million or less and are defined by the SBA as ``small
entities.'' \250\ The Commission anticipates that the estimated
compliance cost of this Final Rule is $4,182,341 in Year 1 (an average
of $25,348 per entity, including both one-time and ongoing costs), and
$1,535,738 per year in Years 2 and 3 (or an annual average of $9,308
per entity for ongoing cost), regardless of entity size. The Commission
does not consider the estimated impact per company to be significant.
Additionally, the incorporation by reference of the revised NAESB
standards, which reflect broad support from both industries, helps
ensure the reasonableness of these standards in this Final Rule.
Pipelines will need to file new tariffs with the Commission only if a)
they do not currently offer multi-party transportation contracts, and
b) shippers request that the pipeline offer such contracts.
---------------------------------------------------------------------------

    \250\ Based on 13 CFR 121.201, Sectors 48-49, Subsector 486,
NAICS Code 486210 for Pipeline Transportation of Natural Gas, the
annual receipts indicate the maximum allowed for a concern and its
affiliates to be considered ``small.''
---------------------------------------------------------------------------

    164. Accordingly, pursuant to Section 605(b) of the RFA,\251\ this
Final Rule should not have a significant economic impact on a
substantial number of small entities.
---------------------------------------------------------------------------

    \251\ 5 U.S.C. 605(b).
---------------------------------------------------------------------------

XII. Implementation Schedule

A. Comments

    165. Many commenters state that, to the extent the Commission
adopts any changes to the gas scheduling timeline in this proceeding,
the Commission must allow a sufficient time for implementation. INGAA,
Kinder Morgan, and WBI state that scheduling changes would require a
minimum of nine months to implement.\252\ A number of commenters also
state that it will be important to implement any scheduling changes
adopted in this proceeding when natural gas demand is low.\253\ INGAA
states that any transition should occur outside the winter heating
season (November through March) or summer peak season (May through
August).\254\ April or October was suggested by INGAA.
---------------------------------------------------------------------------

    \252\ INGAA Comments at 34-35; Kinder Morgan Comments at 16-17;
WBI Comments at 8-9.
    \253\ See, e.g., Calpine Comments at 14, Exelon Comments at 12;
WBI Comments at 8 (citing Section 206 Order, 146 FERC ] 61,202).
    \254\ INGAA Comments at 35.
---------------------------------------------------------------------------

    166. AGA, EEI and Calpine contend that implementation of the
changes to the natural-gas system as ordered in the Final Rule should
occur concurrently with the implementation of the changes to electric
system as ordered in the forthcoming ISO and RTO filings pursuant to
the Section 206 Order.\255\
---------------------------------------------------------------------------

    \255\ Calpine Comments at 17; EEI Comments at 7; NGSA Comments
at 36.
---------------------------------------------------------------------------

    167. NAESB explains that upon the issuance of a Final Rule, NAESB
will respond by integrating the Commission's regulations into its
standards within 90 days.\256\ However, NAESB notes that, while it will
likely be able to respond to the Final Rule within the 90 day deadline
if it can use the expedited NAESB Minor Correction Process, if the
NAESB Standards Development Process is used to respond to the Final
Rule it may be challenging to meet the deadline. NAESB states that
under the latter process multiple industry and member review periods
are required and past expedited efforts have not been completed in
under 90 days.
---------------------------------------------------------------------------

    \256\ NAESB November 26, 2014 Report at 1-2.
---------------------------------------------------------------------------

B. Commission Determination

    168. 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 April 1, 2016. We are
requiring this implementation schedule to give the interstate natural
gas pipelines subject to these standards adequate time to implement
these changes. In addition, pipelines must file tariff records to
reflect the changed standards by February 1, 2016. The changes included
in this Final Rule should benefit all pipeline shippers, including gas-
fired generators. Accordingly, we will not require that the changes
included in this Final Rule be implemented simultaneously with any
changes resulting from the 206 Proceeding.
    169. In addition, consistent with the requirements in Order No.
587-V,\257\ 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.
---------------------------------------------------------------------------

    \257\ Standards for Business Practices of Interstate Natural Gas
Pipelines, Order No. 587-V, FERC Stats. & Regs. ] 31,332, at PP 36-
37 (2012).
---------------------------------------------------------------------------

    (1) The pipelines must designate a single tariff section or tariff
sheet(s) under which every NAESB standard is listed.\258\
---------------------------------------------------------------------------

    \258\ This section should be a separate tariff record under the
Commission's electronic tariff filing requirements and is to be
filed electronically using the eTariff portal using the Type of
Filing Code 580.
---------------------------------------------------------------------------

    (2) For each standard, each pipeline must specify in the tariff
section or tariff sheet(s) listing all the NAESB standards:
    (a) Whether the standard is incorporated by reference;
    (b) for those standards not incorporated by reference, the tariff
provision that complies with the standard; \259\ and
---------------------------------------------------------------------------

    \259\ 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-v) and 5.3.2) in their tariffs. Standards for
Business Practices of Interstate Natural Gas Pipelines, Order No.
587-U, FERC Stats. & Regs. ] 31,307, at P 39 & n.42 (2010). The
pipeline would indicate which tariff provision complies with each of
these standards.

---------------------------------------------------------------------------

    (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.\260\
---------------------------------------------------------------------------

    \260\ 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.
---------------------------------------------------------------------------

    (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 was granted.
    170. This information will give Commission staff and all shippers a
common location that identifies the manner in which the pipeline is
incorporating all the NAESB WGQ Standards and the standards with which
it is required to comply. The Commission will post on its eLibrary Web
site (under Docket No. RM14-2-000) a sample tariff record, to provide
filers an illustrative example to aid them in preparing their
compliance filings.
    171. To reflect our decision in this Final Rule not to change the
start of the Gas Day, NAESB will need to change its standards to
reflect the start of the Gas Day at 9:00 a.m. CCT. Once NAESB has
informed the Commission that it has revised its standards to make this
change, we will incorporate these revised NAESB standards by reference
into our regulations in an instant Final Rule.

XIII. Document Availability

    172. 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 the Commission's Home Page (http://www.ferc.gov) and
in the Commission'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.
    173. From the Commission'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.
    174. User assistance is available for eLibrary and the Commission's
Web site during normal business hours from the Commission's Online
Support at<PHONE_NUMBER> (toll free at 1-866-208-3676) or email at
<EMAIL_ADDRESS>or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. Email the Public Reference Room at
<EMAIL_ADDRESS>
XIV. Effective Date and Congressional Notification

    175. This final rule is effective July 8, 2015. The incorporation
by reference of certain publications listed in this rule is approved by
the Director of the Federal Register as of July 8, 2015. 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.\261\ This final rule is
being submitted to the Senate, House, and Government Accountability
Office.
---------------------------------------------------------------------------

    \261\ 5 U.S.C. 804(2).
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List of Subjects in 18 CFR Part 284

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

    By the Commission.
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. Amend Sec.  284.12 by revising paragraphs (a)(1) introductory text
and (a)(1)(vi) and (vii) and by adding paragraphs (a)(1)(viii) and (ix)
and (b)(1)(iii) to read 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, and as revised by WGQ 2014
Annual Plan Item 11c and Minor Correction MC14018, as incorporated
herein by reference in paragraphs (a)(1)(viii) and (ix) of this
section.
* * * * *
    (vi) Capacity Release Related Standards (Version 2.0, November 30,
2010, with Minor Corrections Applied Through January 5, 2012);
    (vii) Internet Electronic Transport Related Standards (Version 2.0,
November 30, 2010, with Minor Corrections Applied Through January 2,
2011) with the exception of Standard 10.3.2;
    (viii) WGQ 2014 Annual Plan Item 11c, Parts 1 and 2 (September 22,
2014); and
    (ix) Minor Correction/Clarification, Request No. MC14018 Approved
September 10, 2014.
* * * * *
    (b) * * *
    (1) * * *
    (iii) Within 60 days after a shipper request, a pipeline must file
to make appropriate tariff changes at the Commission to allow multiple
shippers associated with a designated agent or asset manager to be
jointly and severally liable under a single firm transportation service
agreement, subject to reasonable terms and conditions.
* * * * *

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

APPENDIX

------------------------------------------------------------------------
                                  Current NAESB         Revised NAESB
 Time shifts--all times CCT         standards             standards
------------------------------------------------------------------------
Timely:
    Timely Day-Ahead          11:30 AM............  1:00 PM
     Nomination Deadline.

    Confirmations...........  ....................  4:30 PM
    Schedule Issued.........  4:30 PM.............  5:00 PM
    Start of Gas Flow.......  9:00 AM.............
Evening:
    Evening Day-Ahead         6:00 PM.............  6:00 PM
     Nomination Deadline.
    Confirmations...........  9:00 PM.............  8:30 PM
    Schedule Issued.........  10:00 PM............  9:00 PM
    Start of Gas Flow.......  9:00 AM.............
Intraday 1:
    ID1 Nomination Deadline.  10:00 AM............  10:00 AM
    Confirmations...........  1:00 PM.............  12:30 PM
    Schedule Issued.........  2:00 PM.............  1:00 PM
    Start of Gas Flow.......  5:00 PM.............  2:00 PM
    IT Bump Rights..........  bumpable............  bumpable.
Intraday 2:
    ID2 Nomination Deadline.  5:00 PM.............  2:30 PM
    Confirmations...........  8:00 PM.............  5:00 PM
    Schedule Issued.........  9:00 PM.............  5:30 PM
    Start of Gas Flow.......  9:00 PM.............  6:00 PM
    IT Bump Rights..........  no bump.............  bumpable.
Intraday 3:
    ID3 Nomination Deadline.  ....................  7:00 PM
    Confirmations...........  ....................  9:30 PM
    Schedule Issued.........  ....................  10:00 PM
    Start of Gas Flow.......  ....................  10:00 PM
    IT Bump Rights..........  ....................  no bump.
------------------------------------------------------------------------

[FR Doc. 2015-09275 Filed 4-23-15; 8:45 am]
 BILLING CODE 6717-01-P