Pipeline Posting Requirements Under Section 23 of the Natural Gas Act, 44893-44901 [2010-18312]

Agencies

• DEPARTMENT OF ENERGY
• Federal Energy Regulatory Commission

[Federal Register Volume 75, Number 146 (Friday, July 30, 2010)]
[Rules and Regulations]
[Pages 44893-44901]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-18312]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 284

[Docket Nos. RM08-2-002 and RM08-2-000; Order No. 720-B]


Pipeline Posting Requirements Under Section 23 of the Natural Gas 
Act

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule; order on rehearing and clarification.

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SUMMARY: The Federal Energy Regulatory Commission clarifies its 
regulations requiring major non-interstate pipelines to post daily 
scheduled volume information and other data for certain points, as well 
as its regulations requiring interstate pipelines to post information 
regarding the provision of no-notice service. These modifications 
include establishing the compliance deadline for major non-interstate 
pipelines after the effective date of this rule and clarifying the 
requirement for interstate pipelines to update posted no-notice service 
volumes.

DATES: Effective Date: This rule will become effective October 1, 2010.

FOR FURTHER INFORMATION CONTACT:
Christopher Ellsworth, Office of Enforcement, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426. (202) 502-
8228. Christopher.Ellsworth@ferc.gov.
Anna Fernandez, Office of the General Counsel, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426. 
(202) 502-6682. Anna.Fernandez@ferc.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

 
                                                               Paragraph
                                                                Numbers
 
I. Introduction.............................................           1
II. Background..............................................           3
III. Discussion.............................................          12
    A. Definition of Major Non-Interstate Pipeline..........          12
    B. Posting Requirements for Major Non-Interstate                  19
     Pipelines..............................................
        1. Point Design Capacity............................          20
        2. Timing of Posting Where Design Capacity is Known.          27
        3. Timing of Posting Where Design Capacity is                 30
         Unknown or Does Not Exist..........................
    C. Compliance Deadline for Future Major Non-Interstate            33
     Pipelines..............................................
    D. Confidentiality of Data to be Posted by Major Non-             37
     Interstate Pipelines...................................
    E. Interstate Pipeline Posting of No-Notice Service.....          48
IV. Information Collection Statement........................          55
V. Document Availability....................................          57
VI. Effective Date and Compliance Deadlines.................          60
 

United States of America Federal Energy Regulatory Commission

Before Commissioners: Jon Wellinghoff, Chairman; Marc Spitzer, 
Philip D. Moeller, John R. Norris, and Cheryl A. LaFleur.

Pipeline Posting Requirements under Section 23 of the Natural Gas 
Act, Docket Nos. RM08-2-002, Order No. 720-B, Order On Rehearing and 
Clarification
Issued July 21, 2010.

I. Introduction

    1. On November 20, 2008, the Federal Energy Regulatory Commission 
(Commission) issued Order No. 720 requiring interstate and certain 
major non-interstate natural gas pipelines to post limited information 
on publicly accessible Internet Web sites regarding their 
operations.\1\ On January 21, 2010, the Commission issued Order No. 
720-A in response to requests for rehearing and clarification of Order 
No. 720.\2\
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    \1\ Pipeline Posting Requirements under Section 23 of the 
Natural Gas Act, Order No. 720, 73 FR 73,494 (Dec. 2, 2008), FERC 
Stats. & Regs. ] 31,283 (2008) (Order No. 720).
    \2\ Pipeline Posting Requirements under Section 23 of the 
Natural Gas Act, Order No. 720-A, 75 FR 5178 (Jan. 21, 2010), FERC 
Stats. & Regs. ] 31,302 (2010) (Order No. 720-A).

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[[Page 44894]]

    2. Following the issuance of Order No. 720-A, three parties filed 
pleadings with the Commission seeking clarification and/or rehearing of 
Order No. 720-A. In this order, the Commission grants in part and 
denies in part those requests.

II. Background

    3. In the Energy Policy Act of 2005 (EPAct 2005),\3\ Congress added 
section 23 to the Natural Gas Act (NGA) \4\ authorizing the Commission 
``to facilitate price transparency in markets for the sale or 
transportation of physical natural gas in interstate commerce, having 
due regard for the public interest, the integrity of those markets * * 
* and the protection of consumers.'' \5\ Section 23 further provides 
that the Commission may issue such rules as it deems necessary and 
appropriate to ``provide for the dissemination, on a timely basis, of 
information about the availability and prices of natural gas sold at 
wholesale and interstate commerce to the Commission, State commissions, 
buyers and sellers of wholesale natural gas, and the public.'' \6\
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    \3\ Energy Policy Act of 2005, Public Law 109-58, 119 Stat. 594 
(2005).
    \4\ NGA Sec.  23, 15 U.S.C. 717t-2 (2000 & Supp. V 2005).
    \5\ NGA Sec.  23, 15 U.S.C. 717t-2(a)(1) (2000 & Supp. V 2005).
    \6\ 15 U.S.C. 717t-2(a)(2).
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    4. On December 21, 2007, the Commission issued a Notice of Proposed 
Rulemaking (NOPR), proposing to require both interstate and certain 
major non-interstate natural gas pipelines to post daily information 
regarding their capacity, scheduled flow volumes, and actual flow 
volumes at major points and mainline segments.\7\ The Commission 
believed that the posting proposal would facilitate price transparency 
in markets for the sale or transportation of physical natural gas in 
interstate commerce to implement section 23 of the Natural Gas Act.\8\
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    \7\ Pipeline Posting Requirements under Section 23 of the 
Natural Gas Act, 73 FR 1116 (Jan. 7, 2008), FERC Stats. & Regs. 
Proposed Regulations 2004-2007 ] 32,626, at P 3 (2007).
    \8\ Id. P 5.
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    5. Acting under its authority in section 23 of the NGA, the 
Commission, on November 20, 2008, issued Order No. 720 requiring non-
exempt major non-interstate pipelines to post scheduled flow and other 
information for each receipt or delivery point with a design capacity 
greater than 15,000 MMBtu per day.\9\ Order No. 720 defined a ``major 
non-interstate pipeline'' as a natural gas pipeline that is not a 
natural gas company under the NGA and delivers annually more than 50 
million MMBtu measured in average deliveries over the past three years. 
The Commission found that information about scheduled natural gas flows 
on major non-interstate pipelines is necessary to fill in significant 
gaps in the information currently available to interstate market 
participants. The Commission found that a significant amount of natural 
gas flows from producing basins to interstate markets on non-interstate 
pipelines. These scheduled flows affect supply considerations in 
interstate markets. Similarly, flows on non-interstate pipelines at the 
end of the delivery chain affect the demand considerations in the 
interstate market. Without access to significant information about 
supply and demand, interstate natural gas market participants are left 
with incomplete information to understand interstate wholesale prices.
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    \9\ Order No. 720 at P 1.
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    6. Regarding interstate natural gas pipelines, Order No. 720 
expanded the Commission's existing posting requirements under 18 CFR 
Part 284 to require interstate pipelines to post volumes of no-notice 
service flows at each receipt and delivery point three days after the 
gas flow. The Commission stated that, without reporting of no-notice 
service, the market cannot see large and unexpected increases in gas 
demand and therefore cannot understand price formation during such 
occasions. The Commission found that reporting such information after 
the gas flows, as required by Order No. 720, allows market participants 
to understand historical patterns of flows and will enable them to 
better predict future no-notice flows, with less of a burden than 
requiring full posting of actual flows.
    7. Order No. 720 required major non-interstate pipelines to comply 
with the new rules within 150 days of Order No. 720's publication in 
the Federal Register.\10\ Subsequently, the Commission extended the 
compliance deadline for major non-interstate pipelines until 150 days 
after an order on rehearing of Order No. 720. Order No. 720 required 
interstate natural gas pipelines to comply with the posting 
requirements no later than 60 days following the order's publication, 
and the Commission did not extend that deadline.\11\
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    \10\ Id. P 168.
    \11\ Order No. 720 at P 167.
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    8. Following the issuance of Order No. 720, several parties filed 
requests for rehearing and clarification of Order No. 720. In Order No. 
720-A, the Commission generally affirmed Order No. 720, granting a 
number or requests for rehearing and clarification and adopting 
regulations consistent with its findings. Order No. 720-A, among other 
things: modified the definition of ``major non-interstate pipeline'' to 
include new pipelines (pipelines that have been operational for less 
than three years) with design capacities of more than 50 million MMBtu 
of natural gas annually; and established that, where design capacity is 
unknown or does not exist at a particular delivery or receipt point, a 
major non-interstate pipeline must post scheduling information for that 
point if gas volumes equal to or greater than 15,000 MMBtu were 
scheduled to it on any day within the prior three calendar years. Order 
No. 720-A also established a July 1, 2010 compliance deadline for major 
non-interstate pipelines (150 days following the publication of Order 
No. 720-A in the Federal Register).\12\ The Commission did not modify 
the January 30, 2009 compliance deadline for interstate pipelines.\13\
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    \12\ See Pipeline Posting Requirements Under Section 23 of the 
Natural Gas Act, Docket No. RM08-2-001 (Jan. 27, 2010) (Errata 
Notice On Compliance Deadline). The notice corrected paragraph 216 
of Order No. 720-A which incorrectly stated that major non-
interstate pipelines must comply with the order no later than 150 
days following its issuance.
    \13\ Id. P 215.
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    9. Following the issuance of Order No. 720-A, three parties filed 
pleadings with the Commission seeking clarification and/or rehearing of 
Order No. 720-A: Interstate Natural Gas Association of America (INGAA); 
American Gas Association (AGA); and Atmos Pipeline-Texas, a division of 
Atmos Energy Corporation (Atmos).
    10. In addition, subsequent to the issuance of Order No. 720-A, 
Atmos, AGA, the Railroad Commission of Texas, and Texas Pipeline 
Association made requests to the Commission to extend the July 1, 2010 
deadline for major non-interstate pipelines to comply with the 
requirements of Order Nos. 720 and 720-A. On May 28, 2010, the 
Secretary of the Commission issued a Notice of Extension of Time 
extending the compliance deadline from July 1, 2010 until September 1, 
2010.\14\
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    \14\ Pipeline Posting Requirements Under Section 23 of the 
Natural Gas Act, Docket No. RM08-2-000 (Issued May 28, 2010) (Notice 
of Extension of Time).
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    11. As discussed below, the Commission grants in part and denies in 
part the requests for rehearing and clarification of Order No. 720-A.

[[Page 44895]]

III. Discussion

A. Definition of Major Non-Interstate Pipeline

    12. In Order No. 720, the Commission adopted a definition of 
``major non-interstate pipeline'' as a pipeline that: (1) Is not a 
``natural gas pipeline'' under section 1 of the NGA; and (2) delivers 
annually more than 50 million MMBtu of natural gas measured in average 
deliveries over the past three years.'' \15\ Order No. 720 added that 
the delivery threshold would be applied on a ``facility-by-facility'' 
basis,\16\ which Order No. 720-A clarified applies both to determine 
whether a pipeline is a major non-interstate pipeline under 18 CFR 
284.1(d) and also whether a major non-interstate pipeline is exempted 
from the posting requirements as provided in 18 CFR 284.14(b).\17\ 
Order No. 720-A also explained that, under a facility-by-facility 
analysis, if a set of facilities is physically interconnected and 
operationally integrated (i.e., transports natural gas through a 
centralized scheduling process), then the facilities should be treated 
as one entity, as opposed to multiple entities.\18\ The Commission 
noted that whether pipelines are organized into separate corporate 
divisions or formal operating systems is irrelevant to the 
analysis.\19\
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    \15\ 18 CFR 284.1(d)(2).
    \16\ Order No. 720 at P 64.
    \17\ Order No. 720-A at P 76.
    \18\ Id. P 77.
    \19\ Id. P 78.
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1. Request for Clarification or Rehearing
    13. Atmos requests clarification or rehearing regarding certain 
facilities that are jointly owned by two or more parties, but which are 
operated by only one of the parties. In Atmos' hypothetical, Pipeline A 
and Pipeline B each own an undivided but equal interest in Facility X, 
which is a major non-interstate pipeline physically interconnected with 
other facilities of both Pipeline A and Pipeline B. Under its 
hypothetical, Pipeline A is the operator of Facility X and Pipeline B 
merely shares in the revenues and expenses from the ownership and 
operation of Facility X. Atmos believes that under this hypothetical 
the posting requirements are satisfied by Pipeline A's assumption of 
the reporting obligation for all eligible receipt and delivery points 
on Facility X inasmuch as Pipeline A is operating Facility X. Atmos 
also believes that, to the extent Pipeline B operates receipt or 
delivery points on Pipeline B's side of the interconnect with Facility 
X, Pipeline B would have the reporting obligation with respect to those 
points.
    14. Atmos also requests clarification that Facility X can be 
effectively treated as part of the larger system of Pipeline A for 
purposes of reporting requirements to the extent that Pipeline A 
operates Facility X as part of a larger, major non-interstate pipeline 
system that is both physically connected and operationally integrated.
    15. Lastly, Atmos requests clarification that annual information 
regarding transport and storage quantities reported on FERC Form 2 or a 
state equivalent form may be utilized by a major non-interstate 
pipeline for the initial and subsequent determinations of whether its 
average annual deliveries over the preceding three years exceeded 50 
million MMBtu.
2. Commission Determination
    16. Atmos' requests for clarification and rehearing are granted in 
part and denied in part. We agree with Atmos that where facilities are 
jointly owned by two or more parties, but are operated by only one of 
the parties, it is appropriate that the operating party post the 
necessary information regarding the jointly-owned facility.
    17. Regarding whether its hypothetical Facility X can be treated as 
part of the larger system of Pipeline A for purposes of the reporting 
requirements, the Commission explained in Order No. 720-A that, under a 
facility-by-facility analysis, physically interconnected and 
operationally integrated (i.e., utilize centralized scheduling process) 
facilities shall be treated as one entity for purposes of determining 
whether a pipeline is a major non-interstate pipeline. Consistent with 
that explanation, Facility X can be treated as part of the larger 
system of Pipeline A for purposes of the reporting requirement, and 
need not be treated as a stand-alone major non-interstate pipeline with 
an independent reporting requirement.\20\
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    \20\ As a reminder, the Commission's help desk can facilitate 
responses to questions regarding compliance with our regulations. 
See Obtaining Guidance on Regulatory Requirements, 123 FERC ] 61,157 
(2008).
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    18. Atmos' request for clarification regarding the use of FERC Form 
2 or a state equivalent for the threshold determinations is granted in 
part and denied in part. In order to determine if a pipeline qualifies 
as a major non-interstate pipeline under the rule, the pipeline must 
aggregate its natural gas deliveries over the previous three calendar 
years and divide by three. In making this calculation, a pipeline may 
use any data source, not limited to FERC Form 2 or a state equivalent, 
that accurately reports its total deliveries for each of the preceding 
three calendar years.

B. Posting Requirements for Major Non-Interstate Pipelines

    19. In Order No. 720, the Commission required all non-exempt major 
non-interstate pipelines to post both scheduled natural gas flow and 
design capacity information for each receipt and delivery point with a 
design capacity equal to or greater than 15,000 MMBtu per day.\21\ The 
Commission also amended its regulations in Order No. 720-A and found 
that, where design capacity is unknown or does not exist, major non-
interstate pipelines must post scheduling information for points with 
scheduled volumes equal to or greater than 15,000 MMBtu on any day 
within the prior three calendar years.\22\
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    \21\ Order No. 720 at P 82.
    \22\ Order No. 720-A at P 90.
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1. Point Design Capacity
    20. In Order No. 720, the Commission stated that, in circumstances 
where the design capacity of a receipt or delivery point could vary 
according to operational or usage conditions, a major non-interstate 
pipeline must post the design capacity for the most common operating 
conditions of its system during peak periods.\23\ Order No. 720-A also 
stated that, if the major non-interstate pipeline has greater capacity 
at its point than the interconnecting interstate pipeline, the major 
non-interstate pipelines must nevertheless post the actual design 
capacity of its point. That is because the obligation to post design 
capacity relates to the facilities of the major non-interstate 
pipeline. Order No. 720-A added that major non-interstate pipelines 
must use reasonable efforts to determine design capacity at physical 
receipt and delivery points and to the extent that a major non-
interstate pipeline is uncertain as to how to calculate design 
capacity, it is free to contact the Commission's compliance help desk 
for informal guidance.\24\ Further, major non-interstate pipelines are 
free to post additional information, including, for example, 
operational considerations that could affect available capacity.
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    \23\ Order No. 720 at P 92.
    \24\ Order No. 720-A at 107.
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a. Request for Clarification
    21. Atmos requests that the Commission clarify to a greater degree 
what constitutes ``reasonable efforts'' to determine the design 
capacity for a

[[Page 44896]]

physical receipt or delivery point. Atmos states that it has performed 
some engineering analysis at receipt and delivery points on its system 
where the point capacity, either individually or combined with other 
points on the same pipeline or lateral, exceeds the delivery 
capabilities of the upstream or downstream pipeline or lateral. For 
example, Atmos states that one pipeline segment on its system has a 
maximum daily capacity of approximately 800 MMSCF per day. However, two 
eligible points on this segment each have a design capacity of 500 
MMSCF per day, so that the total capacity of the two points exceeds the 
segment capacity by 200 MMSCF. Therefore, Atmos submits, in this type 
of situation the design capacity of an individual receipt or delivery 
point is not a reasonable determination of the point's capacity in 
every instance.
    22. Atmos believes that a more reasonable determination of a 
point's capacity in such circumstances would be the highest scheduled 
volume to that point on any day during the three calendar years because 
that is truly reflective of known and actual pipeline system operating 
conditions and requests that the Commission allow a major non-
interstate pipeline to utilize this benchmark for point capacity 
posting purposes if (i) a reasonable attempt has been made to calculate 
design capacity consistent with the standard articulated in Order No. 
720-A and (ii) the calculated design capacity is not a reasonable 
representation of the capacity at the point due to upstream or 
downstream facility limitations. Atmos recognizes the Commission has 
authorized major non-interstate pipelines to post additional 
information that may affect available capacity, but Atmos anticipates 
that this will result in postings replete with footnotes and caveats 
that may only serve to create more confusion for data observers.
b. Commission Determination
    23. Atmos' request for clarification is approved in part and denied 
in part. In Order No. 720-A, the Commission provided clear instructions 
for determining the applicable capacity for points where design 
capacity is unknown; major non-interstate pipelines must post scheduled 
flow data for points where design capacity is unknown or does not exist 
with scheduled maximum natural gas volumes equal to or greater than 
15,000 MMBtu on any day within the prior three calendar years.\25\ The 
Commission adopted these rules with the understanding that there exist 
a small number of physical receipt and delivery points where major non-
interstate pipelines cannot reasonably determine a physical design 
capacity. While not identifying herein specific actions that would 
constitute ``reasonable'' effort in determining a point's capacity, the 
Commission will clarify that major non-interstate pipelines would not 
be expected to undertake studies that would involve a physical survey 
of the point in question or use information not on hand or easily 
obtainable by the company.
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    \25\ Order No. 720-A at P 90.
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    24. That clarification notwithstanding, Atmos' comments attempt to 
reopen the question about whether design capacity is the appropriate 
measure to be posted. The Commission elected to require posting based 
on each receipt and delivery point's design capacity as opposed to some 
measure of highest actual usage at a point, because a point's design 
capacity was relatively fixed and lent itself to stable posting 
requirements. Ultimately, the Commission also believed that this would 
be less burdensome for pipelines.\26\ In Order No. 720-A, the 
Commission affirmed its position and found that, despite the day-to-day 
operational factors that can sometimes affect available capacity, 
market participants should nevertheless be able to ascertain available 
capacity from the data to be posted by major non-interstate 
pipelines.\27\
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    \26\ Order No. 720 at P 91.
    \27\ Order No. 720-A at 104.
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    25. Atmos has not presented any evidence indicating that it is 
unable to determine the design capacity of the points on its system. In 
fact, in its example, the design capacity of each point is known to be 
500 MMSCF. Simply put, Atmos desires that the Commission require 
posting based on maximum scheduled flows at a point, as opposed to 
design capacity.
    26. As discussed above, the Commission believes that design 
capacity is a less burdensome and reasonably objective criterion, 
although operationally available capacity provides market participants 
additional information about capacity availability. If Atmos, or any 
other major non-interstate pipeline, desires to post on its Web site a 
point's operationally available capacity, in addition to its design 
capacity, we support its efforts to do so.
2. Timing of Posting Where Design Capacity Is Known
    27. In Order No. 720-A, the Commission required major non-
interstate pipelines to begin Internet posting for newly-eligible 
receipt and delivery points within 45 days of the date the point 
becomes eligible for posting.\28\
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    \28\ Id. P 115. This requirement is set forth in section 
284.14(a)(3) of the Commission's regulations, as revised by Order 
No. 720-A.
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a. Request for Clarification
    28. AGA asserts that it is not clear when a newly-installed point 
with a physically metered design capacity equal to or greater than 
15,000 MMBtu per day should be considered to become eligible for 
posting for purposes of triggering the 45-day period after which the 
pipeline must post information about the point. AGA recommends that the 
Commission clarify that such a new point does not become eligible for 
posting until the date the point has volumes scheduled to it. Atmos 
supports AGA's request for clarification.
b. Commission Determination
    29. The Commission clarifies that a newly installed point with a 
physically metered design capacity equal to or greater than 15,000 
MMBtu per day becomes eligible for posting on its in-service date. 
Therefore, the major non-interstate pipeline must begin posting the 
required information about that point 45 days after its in-service 
date. Scheduled volume information is only one category of the 
information section 284.14(a)(4) of the Commission's regulations 
requires major non-interstate pipelines to post. Also required is 
information regarding a point's design capacity. As the Commission 
found in Order No. 720, market participants can utilize design capacity 
and scheduled volume information to help determine available capacity 
at a particular point and therefore, required posting of both design 
capacity and scheduled volume information.\29\ When a new point is 
placed into service its capacity is available for use by shippers, and 
therefore the major non-interstate pipeline should begin posting the 
availability of capacity at that point within 45 days, regardless of 
whether volumes have yet been scheduled at that point. AGA's and Atmos' 
request to delay posting until volumes are first scheduled to a new 
point would frustrate this very purpose and therefore, their request is 
denied.
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    \29\ Order No. 720 at P 82, 84.
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3. Timing of Posting Where Design Capacity Is Unknown or Does Not Exist
    30. When the design capacity of a point is unknown or does not 
exist, major non-interstate pipelines must post scheduling information 
for that point if

[[Page 44897]]

its scheduled volumes were equal to or greater than 15,000 MMBtu on any 
day within the prior three calendar years. Order No. 720-A held that 
major non-interstate pipelines need only review scheduled volume data 
annually to determine whether points where no design capacity is known 
must be posted. Therefore, such points do not become eligible for 
posting until January 1 of the year after the first day on which 
scheduled volumes equaled or exceeded 15,000 MMBtu.\30\ This means that 
major non-interstate pipelines do not have to begin posting the 
required information about that point until 45 days after January 1, or 
on February 15.
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    \30\ Order No. 720-A at P 94.
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a. Request for Clarification or Rehearing
    31. AGA contends that a January 1 eligibility date for points where 
design capacity is unknown or does not exist is problematic because it 
means that, by February 15 of each year, the pipeline must, both 
collect and analyze the data necessary to determine whether a point 
would be eligible and make the necessary system changes to begin 
posting each eligible point. AGA recommends that the Commission clarify 
that for a point where the physically metered design capacity is not 
known or does not exist, such points become eligible for posting on 
February 1 of the following year, thus, postponing the date when the 
major non-interstate pipeline must begin posting information about the 
points until March 18 of the following year. Atmos supports AGA's 
request for clarification.
b. Commission Determination
    32. AGA's request is denied. As described above, the eligibility 
determination for points whose design capacity is unknown or does not 
exist is based on calendar year data. Therefore, it is appropriate that 
the point be considered eligible for posting immediately upon 
completion of the calendar year during which scheduled volumes at the 
point reached or exceeded 15,000 MMBtu for at least one day. By 
requesting that the Commission move the eligibility date for such 
points from January 1 to February 1, AGA is effectively asking that the 
Commission extend the 45-day deadline to commence posting by one month, 
to 76 days. In denying earlier requests to expand the 45-day period, 
the Commission found that major non-interstate pipelines have access 
to, and utilize on a daily basis all of the information necessary to 
determine whether a receipt or delivery point must be posted under the 
new regulations.\31\ Further, the Commission found that the posting of 
newly eligible points is of substantial value to market participants as 
new receipt and delivery points or increased scheduled flow to points 
could have immediate, substantial effect on market prices.\32\ 
Balancing the transparency benefits of timely posting for newly 
eligible points with the burden of collecting and analyzing the data 
necessary to determine whether a point would be eligible and making the 
necessary system changes to begin posting, the Commission concluded 
that 45 days is appropriate.\33\ AGA has not provided any specific 
evidence that would contradict the Commission's findings, even where 
design capacity is unknown or does not exist. Therefore, its request is 
denied.
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    \31\ Id. P 116.
    \32\ Id.
    \33\ Id.
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C. Compliance Deadline for Future Major Non-Interstate Pipelines

    33. A ``major non-interstate pipeline'' is defined as a natural gas 
pipeline that is not a natural gas company under the NGA and delivers 
annually more than 50 million MMBtu measured in average deliveries over 
the past three calendar years.
a. Request for Clarification
    34. Atmos and AGA state that a pipeline may not currently qualify 
as a major non-interstate pipeline because its average deliveries over 
the last three calendar years were less than 50 million MMBtu. However, 
the pipeline could subsequently qualify as a major non-interstate 
pipeline if its annual deliveries increase. Atmos and AGA state that 
the Commission's posting regulations do not clearly articulate when a 
major non-interstate pipeline must begin complying with the posting 
requirements in subsequent years if its three-year deliveries average 
rises above the 50 million MMBtu threshold or it is no longer exempt. 
Atmos and AGA recommend that the Commission revise the regulations to 
make clear that after 2010, a pipeline that did not previously have to 
comply with the posting regulations, but then meets the definition of a 
major non-interstate pipeline and is not otherwise exempt, has until 
July 1 of that year to comply with the posting requirements. AGA argues 
that such pipelines should be permitted no less than 150 days to 
develop the systems and Internet resources to comply with the posting 
requirements, which is the same compliance period for pipelines today 
that meet the definition of a major non-interstate pipeline.
b. Commission Determination
    35. Atmos' and AGA's requests for clarification are granted in part 
and denied in part. The Commission will provide pipelines that: (a) 
Meet the definition of a major non-interstate pipeline in the future; 
and (b) currently exempt major non-interstate pipelines that in the 
future no longer qualify for an exemption, have 150 days from the date 
the pipeline meets the definition of a major non-interstate pipeline or 
is no longer exempt to comply with the posting requirements.\34\ 
However, this requires compliance by June 1, not July 1.
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    \34\ This time period is consistent with the time provided under 
Order No. 720 for major non-interstate pipelines to comply initially 
with the rule. Order No. 720 at P 168.
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    36. Similar to points where design capacity is unknown or does not 
exist, the threshold for determining if a pipeline meets the definition 
of a major non-interstate pipeline is based on calendar year data. 
Because points where design capacity is unknown or does not exist are 
based on calendar year data, they become eligible for posting on 
January 1 of the following year. Likewise, because the major non-
interstate pipeline delivery threshold and posting exemptions are based 
upon calendar year data, the pipelines become eligible on January 1 of 
the following year.

D. Confidentiality of Data To Be Posted by Major Non-Interstate 
Pipelines

    37. In Order No. 720, the Commission required that all postings by 
major non-interstate pipelines pursuant to this rule be public. The 
Commission recognized that posting scheduled gas flows at eligible 
delivery points dedicated to a single customer could have some effect 
on the competitive position of that customer. However, the Commission 
found that posting such information will provide useful information to 
the Commission, market participants, and other market observers and 
will greatly increase market transparency. The Commission concluded 
that this benefit outweighs concerns about publicly posting information 
about scheduled flows to a customer with a dedicated delivery 
point.\35\ The Commission pointed out that interstate pipelines are 
required to post daily scheduled volumes for delivery points dedicated 
to a single customer, and there have been no indications that 
competitive balance

[[Page 44898]]

has been harmed since the interstate requirement to post was 
instituted.
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    \35\ Order No. 720 at P 88-89.
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    38. In Order No. 720-A, the Commission denied rehearing of its 
requirement that all postings be public.\36\ The Commission rejected 
contentions that this requirement would cause disclosure of potentially 
sensitive information regarding the physical location of receipt and 
delivery points or actual natural gas flows that would implicate 
national security.\37\ The Commission also found that there had been no 
showing that the public posting requirement would result in the 
violation of state commission rules regarding the disclosure of private 
customer data.\38\
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    \36\ Order No. 720-A at P 123.
    \37\ Id. P 124.
    \38\ Id. P 125.
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1. Request for Clarification or Rehearing
    39. AGA requests that the Commission clarify that major non-
interstate pipelines have flexibility in the manner in which they 
comply with the rule's posting requirements in order to prevent the 
disclosure of confidential information or the violation of state law or 
other regulatory requirements. Alternatively, AGA seeks rehearing on 
the grounds that the Commission's explanations for dismissing AGA's 
concerns are unsupported and contrary to law. AGA raises generally the 
same arguments that were discussed and rejected in Order Nos. 720 and 
720-A.
    40. AGA contends that not affording pipelines flexibility in this 
regard would be contrary to section 23 of the NGA, which provides that 
in determining the information to be disclosed, ``the Commission shall 
seek to ensure that consumers and competitive markets are protected 
from the adverse effects of potential collusion or other anti-
competitive behaviors that can be facilitated by untimely public 
disclosure of transaction-specific information.'' \39\ AGA contends 
that, under the revised regulations, if a particular delivery point 
services a single large customer and the current Location Name of the 
delivery point were designated as the name of the customer, then 
listing the Location Name as the name of the customer, the Posted 
Capacity of the customer's delivery point, and the customer's Scheduled 
Volumes on a daily basis would each disclose customer-specific 
information. AGA contends that this could be a violation of state law 
if a utility were prohibited from disclosing customer-specific 
information under state law. Likewise, AGA contends that if a Location 
Name is the name of a military installation, disclosing daily scheduled 
volumes could have national security implications. Further, AGA argues 
that the posting of scheduled natural gas volumes could have anti-
competitive effects.
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    \39\ AGA Request for Rehearing at 11 (citing NGA Sec.  
23(b)(2)).
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    41. AGA contends that potential ways of affording flexibility to 
major non-interstate pipelines would be to allow: (a) The Location Name 
to be changed to a region or county to protect the identity of the 
customer (e.g., [County Name] 1--Delivery, [County Name] 2--Delivery); 
(b) the pipeline to post information at an upstream aggregation point 
served by more than one customer; (c) the aggregation of customer data 
within given regions, instead of requiring the posting of the scheduled 
volumes of a single customer. Atmos supports AGA's request for 
clarification and rehearing.
2. Commission Determination
    42. The Commission grants in part AGA's request for clarification 
in order to give major non-interstate pipelines some flexibility in how 
they comply with the requirement that they publicly post scheduled 
flows at delivery points dedicated to a single customer. As the 
Commission pointed out in Order No. 720-A, the major non-interstate 
posting requirements do not mandate the disclosure of the physical 
location or composition of receipt and delivery point facilities.\40\ 
Nonetheless, the Commission will allow, although not require, a major 
non-interstate pipeline labeling a customer-specific point according to 
the city or county within which it is located, as opposed to the 
specific name of the customer, as proposed by AGA. Such an 
identification should provide the Commission, market participants, and 
other market observers sufficient information about the location where 
the gas flow is being delivered, to analyze and understand the demand 
conditions affecting price formation in that area, while not revealing 
the name of the specific customer to whom the gas is being delivered. 
The Commission will not require this alternative designation; if the 
major non-interstate pipeline chooses to identify a single-customer 
delivery point as interstate pipelines have for several years, it may 
do so.
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    \40\ Order No. 720-A at P 124.
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    43. However, AGA's other suggestions would appear to allow the 
pipeline to use broader geographic areas than just a single city or 
county for purposes of identifying the location of the delivery point. 
This could significantly reduce the value of the posted information to 
understand demand conditions affecting price formation. Therefore, the 
Commission denies AGA's request to allow pipelines to post information 
at an upstream aggregation point served by more than one customer or 
allow the aggregation of customer data within given regions.
    44. With regard to AGA's concern about the posting requirement 
violating state regulatory requirements, the Commission will not, in 
this rulemaking proceeding, grant major non-interstate pipelines a 
blanket exemption from posting scheduled flows to delivery points 
dedicated to a single customer whenever they believe such a posting 
might violate a state regulatory requirement. In section 23(a)(2) of 
the NGA, Congress called for any transparency rule to provide for the 
``dissemination, on a timely basis, of information about the 
availability and prices of natural gas sold at wholesale and interstate 
commerce to the Commission, State commissions, buyers and sellers of 
wholesale natural gas, and the public.'' \41\ The Commission believes 
that requiring all postings to be public is specifically in keeping 
with this directive. Moreover, the posting information will provide 
useful information to the Commission, market participants, and other 
market observers, thereby greatly increasing market transparency. As 
stated previously, the Commission believes that this benefit outweighs 
the concerns about publicly posting information about scheduled volumes 
to a customer.
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    \41\ Section 23(a)(2) of the NGA; 15 U.S.C. 717t-2(a)(2) (2000 & 
Supp. V 2005) (emphasis added).
---------------------------------------------------------------------------

    45. AGA points out that section 23(b)(2) provides, ``In determining 
the information to be made available under this section and the time to 
make the information to be available, the Commission shall seek to 
ensure that consumers and competitive markets are protected from the 
adverse effects of potential collusion or other anti-competitive 
behaviors that can be facilitated by untimely public disclosure of 
transaction-specific information.'' AGA appears to read this provision 
as requiring the Commission to exempt from public posting any 
information that might have some effect on the competitive position of 
a particular participant in the natural gas market. However, this 
provision only provides that, in requiring public disclosure, the 
Commission should seek to ensure that consumers and competitive markets 
are protected from ``the adverse effects of potential collusion or 
other anti-competitive behaviors'' (emphasis supplied). AGA has 
provided no

[[Page 44899]]

explanation as to how public disclosure of scheduled deliveries at 
points dedicated to a single customer would contribute to ``collusion 
or other anti-competitive behaviors.'' In fact, as the Commission found 
in Order No. 720-A, ``understanding * * * demand in large non-
interstate pipelines downstream of the interstate market will enable 
market observers to better understand prices and, therefore, identify 
potential cases of market manipulation.'' \42\ We therefore believe 
that the requirement to disclose scheduled flows at delivery points 
with significant load \43\ likely to affect market prices is more 
likely to minimize anti-competitive behaviors, than contribute to them.
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    \42\ Order No. 720-A at P 62.
    \43\ As discussed in Order No. 720, at P 90, the posting 
requirement only applies at delivery points with significant load, 
such as major pipeline interconnections and points with substantial 
industrial load.
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    46. Moreover, the Commission is not persuaded, based upon the 
limited information provided by AGA, that, even without the 
clarification granted above, the Commission's requirement that major 
non-interstate pipelines post scheduled flows at major delivery points 
dedicated to a single customer conflict with state prohibitions 
regarding the disclosure of private customer data. For example, AGA 
cites a provision in the tariff of Pacific Gas and Electric Co. (PG&E), 
approved by the California Public Utilities Commission (CPUC), 
providing that ``to preserve customer privacy, PG&E will not release 
confidential information, including financial information, to a third 
party without the customers electronic signature or the written 
consent.'' \44\ However, it is not clear that scheduled deliveries at a 
major delivery point would be considered confidential information, 
subject to this provision. As we noted in Order No. 720-A, not a single 
state commission has raised this issue in this proceeding.
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    \44\ AGA Request for Rehearing at 14.
---------------------------------------------------------------------------

    47. Nevertheless, if a major non-interstate pipeline believes that 
posting scheduled flows to eligible delivery points dedicated to a 
single customer violates a state regulatory confidentiality 
requirement, and if the flexibility provided in this order to identify 
the point by county or city is insufficient to avoid a violation of 
that requirement, the pipeline may request a waiver from the posting 
requirement. In any such waiver request, the pipeline should provide a 
complete explanation of why the state regulatory requirement is 
applicable, together with citations to any applicable state agency or 
court precedent supporting its interpretation of the state regulatory 
requirement. The Commission would also expect that in such a waiver 
request the applicant would affirmatively demonstrate that it has 
spoken with and obtained the support of the applicable state regulatory 
agency with respect to its waiver request.

E. Interstate Pipeline Posting of No-Notice Service

    48. Order No. 720 required interstate natural gas pipelines to post 
volumes of no-notice service flows at each receipt and delivery point 
before 11:30 a.m. central clock time three days after the day of gas 
flow.\45\ The Commission found that such information is valuable, even 
posted three days after gas flow, because it allows market participants 
to increase their understanding of historical patterns of no-notice gas 
flows and enables them to better anticipate future no-notice flows.
---------------------------------------------------------------------------

    \45\ Order No. 720 at P 160.
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    49. In Order No. 720-A, the Commission clarified that, because 
interstate pipelines have varying metering and measurement equipment, 
they are only required to post information that is available to 
them.\46\ The Order No. 720 regulations do not require construction of 
new metering equipment. Instead, the interstate pipelines should post 
whatever data it has available after three days, noting any 
deficiencies in the posting on its website. Order No. 720-A added that 
an interstate pipeline should update previously posted information if, 
subsequent to an initial posting, more complete no-notice service data 
becomes available.\47\
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    \46\ Order No. 720-A at P 190.
    \47\ Order No. 720-A at P 190.
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1. Request for Clarification or Rehearing
    50. INGAA's request for clarification or rehearing focuses on Order 
No. 720-A's statement that, ``if subsequent to an initial posting, more 
complete no-notice service data becomes available, interstate pipelines 
must update previously posted information.'' INGAA requests that the 
Commission clarify that an interstate pipeline's obligation to update 
previously posted information is limited to providing no-notice 
information where none was available within three days after the day of 
gas flow, as opposed to revising information that has already been 
posted.\48\ If, however, the obligation to update previously posted 
data goes beyond supplying missing data to revising data that has 
already been posted, INGAA prefers that the Commission eliminate the 
update requirement in its entirety or, in the alternative, limit it to 
one update for each posted figure, to be provided within ten business 
days after the end of the month in which the posted service was 
rendered.\49\
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    \48\ INGAA Request for Rehearing and Clarification at 2-3.
    \49\ Id. at 3-4.
---------------------------------------------------------------------------

    51. INGAA argues that the Commission promulgated the after-the-fact 
obligation to update initially posted no-notice information without 
developing a record on the cost of assembling and reporting this 
information or the benefit that updated no-notice data would provide 
either to market participants, price formation and other market 
behavior, or market transparency. INGAA contends that updated no-notice 
data is of no value to market participants, price formation or market 
transparency and that the minor and non-substantive changes that would 
be made to the originally posted data do not warrant the additional 
costs associated with providing it.
    52. INGAA contends that meter adjustments and the receipt of 
corrected data from third parties cause minor departures from initially 
posted no-notice information and as a result, certain no-notice 
quantities are not fully known until the ``close of measurement,'' 
which is defined by NAESB as five business days after the end of the 
month. If the Commission insists on some form of updating, INGAA urges 
limiting it to one update for each posted figure, to be provided within 
ten business days after the end of the month in which the posted 
service was rendered.
2. Commission Determination
    53. The Commission grants INGAA's request for rehearing in part and 
modifies 18 CFR 284.13(d) to provide that an interstate pipeline must 
provide no-notice transportation information based on its best estimate 
before 11:30 a.m. central clock time three days after the day of gas 
flow and make one update to each posted figure as necessary within ten 
business days after the month in which the posted service was 
performed. The Commission finds that requiring a single update should 
ensure that interstate pipelines provide accurate information about no-
notice gas flows, without burdening pipelines with a requirement to 
make frequent, minor changes in posted volumes. As stated in Order No. 
720, information on no-notice volumes is valuable even posted after the 
no-notice gas flows because it allows market participants and other 
market observers to understand the historical patterns of

[[Page 44900]]

flows and will enable them to better predict future no-notice 
flows.\50\ Updating the initially posted flow data based on corrected 
information obtained through the close of the NAESB measurement period 
will assist in understanding historical flow patterns and predicting 
future no-notice flows. We therefore decline to limit an interstate 
pipeline's obligation to update previously posted information to 
providing no-notice information where none was available within three 
days after the day of gas flow. Of course, if the no-notice information 
posted three days after the flow date does not change before the close 
of the NAESB measurement period, no update will be necessary.
---------------------------------------------------------------------------

    \50\ Order No. 720 at P 162.
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    54. Based upon INGAA's comments, interstate pipelines have access 
to reasonably accurate no-notice information within 3 days after gas 
flow, but within 5 business days of the end of the month of gas flow 
the no-notice information is more fully known by the interstate 
pipelines. The revised regulation takes into account this lag time in 
information, thus reducing the burden on interstate pipelines to 
continuously update estimated no-notice information. At the same time, 
however, this modification presents the Commission and the market with 
continued access to the most-accurate data, thereby enhancing 
transparency.

IV. Information Collection Statement

    55. The Office of Management and Budget (OMB) regulations require 
that OMB approve certain reporting, recordkeeping, and public 
disclosure (collections of information) imposed by and for an 
agency.\51\ The information collection requirements or FERC-551 were 
approved by OMB under OMB Control No. 1902-0243. This order further 
revises these requirements in order to more clearly state the 
obligations imposed in Order Nos. 720 and 720-A. In response to the 
requests for rehearing, the Commission has made several revisions that 
can be considered as ``substantive or material modifications'' to the 
information collection requirements,\52\ and we will submit them for 
OMB review under the Paperwork Reduction Act.\53\ The revisions in this 
order will not have a significant impact on the Commission's burden 
estimates expressed in Order No. 720-A and so the Commission will 
retain those estimates.
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    \51\ 5 CFR 1320.12 (2009).
    \52\ 5 CFR 1320.5(g).
    \53\ See 44 U.S.C. 3507(h)(3).
---------------------------------------------------------------------------

    56. 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: 
Michael Miller, Office of the Executive Director]; e-mail: 
DataClearance@ferc.gov, Phone: (202) 502-8415, Fax: (202) 273-0873. For 
submitting comments concerning the collection of information, please 
send your comments to the contact listed above and to: Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
725 17th Street, NW., Washington, DC 20503, [Attention: Desk Officer 
for the Federal Energy Regulatory Commission] Phone: (202) 395-4638, 
Fax: (202) 395-7285. Due to security concerns, comments should be sent 
electronically to the following e-mail address: oira_submission@omb.eop.gov. Please reference OMB Control No. 1902-0243 and 
the docket number of this order in your submission.

V. Document Availability

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

VI. Effective Date and Compliance Deadlines

    60. Changes to Order Nos. 720 and 720-A made in this Order on 
Rehearing will become effective on October 1, 2010. Accordingly, the 
compliance deadline for major non-interstate pipelines shall be 
extended to October 1, 2010.

List of Subjects in 18 CFR Part 284

    Continental shelf; Incorporation by reference; Natural gas; 
Reporting and recordkeeping requirements.

    By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

0
For the reasons set forth in the preamble, the Federal Energy 
Regulatory Commission amends 18 CFR part 284 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. 717-717w, 3301-3432; 42 U.S.C. 7101-7352; 
43 U.S.C. 1331-1356.

0
2. In Sec.  284.13, paragraph (d)(1), the last two sentences are 
revised and a third final sentence is added, to read as follows:


Sec.  284.13  Reporting requirements for interstate pipelines.

* * * * *
    (d) * * *
    (1) * * * An interstate pipeline must also provide information 
about the volumes of no-notice transportation provided pursuant to 
Sec.  284.7(a)(4). This information must be posted at each receipt and 
delivery point before 11:30 a.m. central clock time three days after 
the day of gas flow and must reflect the pipeline's best estimate. 
Updated information must be posted at each receipt and delivery point 
as necessary within ten business days after the month of gas flow.
* * * * *

0
3. Amend Sec.  284.14 by adding paragraph (a)(5) to read as follows:


Sec.  284.14.  Posting requirements of major non-interstate pipelines.

* * * * *
    (5) Newly constructed major non-interstate pipelines, which 
commence service after the effective date of this section, must comply 
with the requirements of this section upon their in-service date. 
Except for newly constructed major non-interstate pipelines, a major 
non-interstate pipeline that becomes subject to the requirements of 
this section in any year after the effective date of this section

[[Page 44901]]

has until June 1 of that year to comply with the requirements of this 
section.
* * * * *
[FR Doc. 2010-18312 Filed 7-29-10; 8:45 am]
BILLING CODE 6717-01-P