Standards for Business Practices of Interstate Natural Gas Pipelines, 43590-43598 [2021-16915]
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Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Rules and Regulations
regulatory evaluation as the anticipated
impact is so minimal. Since this is a
routine matter that will only affect air
traffic procedures and air navigation, it
is certified that this rule, when
promulgated, would not have a
significant economic impact on a
substantial number of small entities
under the criteria of the Regulatory
Flexibility Act.
Environmental Review
The FAA has determined that this
action qualifies for categorical exclusion
under the National Environmental
Policy Act in accordance with FAA
Order 1050.1F, ‘‘Environmental
Impacts: Policies and Procedures,’’
paragraph 5–6.5a. This airspace action
is not expected to cause any potentially
significant environmental impacts, and
no extraordinary circumstances exist
that warrant the preparation of an
environmental assessment.
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference,
Navigation (air).
Adoption of the Amendment
In consideration of the foregoing, the
Federal Aviation Administration
amends 14 CFR part 71 as follows:
PART 71—DESIGNATION OF CLASS A,
B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND
REPORTING POINTS
1. The authority citation for 14 CFR
part 71 continues to read as follows:
■
Authority: 49 U.S.C. 106(f), 106(g), 40103,
40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR,
1959–1963 Comp., p. 389.
§ 71.1
[Amended]
2. The incorporation by reference in
14 CFR 71.1 of FAA Order 7400.11E,
Airspace Designations and Reporting
Points, dated July 21, 2020, and
effective September 15, 2020, is
amended as follows:
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■
Paragraph 5000
Class D Airspace.
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Final rule.
Paragraph 6004 Class E Airspace Areas
Designated as an Extension to a Class D or
Class E Surface Area.
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DATES:
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AAL AK E4 Kodiak, AK [Removed]
Kodiak Airport, AK
(Lat. 57°45′00″ N, long. 152°29′38″ W)
Paragraph 6005 Class E Airspace Areas
Extending Upward From 700 feet or More
Above the Surface of the Earth.
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AAL AK E5 Kodiak, AK [Amended]
Kodiak Airport, AK
(Lat. 57°44′59″ N, long. 152°29′38″ W)
That airspace extending upward from 700
feet above the surface within a 6.9-mile
radius of the airport, and within 8 miles
north and 4.1 miles south of the 071° bearing
from the airport, extending from the 6.9-mile
radius and extending from 5.2 miles east of
the airport to 21.2 miles east of the airport,
excluding that airspace extending beyond 12
miles of the shoreline; and that airspace
extending upward from 1,200 feet above the
surface within a 73-mile radius of the Kodiak
Airport, AK, excluding that airspace
extending beyond 12 miles of the shoreline.
[FR Doc. 2021–16827 Filed 8–9–21; 8:45 am]
BILLING CODE 4910–13–P
SUMMARY:
Effective date: This rule is effective
October 12, 2021.
Compliance date: Compliance filings
required by this rule are due on
November 12, 2021 and compliance
with the standards incorporated in this
rule is required on and after June 1,
2022.
Incorporation by reference: The
incorporation by reference of certain
publications listed in this rule is
approved by the Director of the Federal
Register as of October 12, 2021.
FOR FURTHER INFORMATION CONTACT:
Stanley Wolf (technical issues), Office of
Energy Policy and Innovation, Federal
Energy Regulatory Commission, 888
First Street NE, Washington, DC
20426, (202) 502–6841, stanley.wolf@
ferc.gov.
Oscar F. Santillana (technical issues),
Office of Energy Market Regulation,
Federal Energy Regulatory
Commission, 888 First Street NE,
Washington, DC 20426, (202) 502–
6392, oscar.santillana@ferc.gov.
Federal Energy Regulatory
Commission
Robert McLean (legal issues), Office of
the General Counsel, Federal Energy
Regulatory Commission, 888 First
Street NE, Washington, DC 20426,
(202) 502–8156, robert.mclean@
ferc.gov.
18 CFR Part 284
SUPPLEMENTARY INFORMATION:
[Docket No. RM96–1–042; Order No. 587–
Z]
Order No. 587–Z
Standards for Business Practices of
Interstate Natural Gas Pipelines
(Issued July 13, 2021)
*
16:06 Aug 09, 2021
ACTION:
The Federal Energy
Regulatory Commission is amending its
regulations to incorporate by reference,
with certain enumerated exceptions, the
latest version (Version 3.2) of business
practice standards adopted by the
Wholesale Gas Quadrant of the North
American Energy Standards Board
(NAESB) applicable to natural gas
pipelines in place of the currently
incorporated version (Version 3.1) of
those business practice standards. The
revisions made by NAESB in this
version of the standards are designed to
enhance the natural gas industries’
system and software security measures
and to clarify the processing of certain
business transactions.
Issued in Des Moines, Washington, on
August 2, 2021.
B.G. Chew,
Acting Group Manager, Operations Support
Group, Western Service Center.
AAL AK D Kodiak, AK [Amended]
Kodiak Airport, AK
(Lat. 57°44′59″ N, long. 152°29′38″ W)
Trident Basin Airport, AK
(Lat. 57°46′51″ N, long. 152°23′29″ W)
That airspace extending upward from the
surface to and including 2,600 feet MSL
within a 4.4-mile radius of the airport, and
within 1 mile each side of the 091° bearing
from the airport, extending from the 4.4-mile
radius to 6.1 miles east of Kodiak Airport,
excluding that airspace west and northwest
of a line beginning at the 228° bearing from
Kodiak Airport, to the 308° bearing at 2.9
miles from Kodiak Airport, to the 012°
VerDate Sep<11>2014
bearing from Kodiak Airport, and excluding
that airspace from the 024° bearing from the
Kodiak Airport to the 325° bearing at 1.0 mile
from Trident Basin Airport, and excluding
that airspace within a 1.0-mile radius of
Trident Basin Airport from the 325° bearing
from Trident Basin Airport counterclockwise
to the 250° bearing from Trident Basin
airport, and within a 0.3-mile radius of
Trident Basin Airport from the 250° bearing
from Trident Basin Airport counterclockwise
to the 119° bearing from the Trident Basin
Airport, and from the 119° bearing at 0.3
miles from Trident Basin Airport to the 072°
bearing at 4.4 miles from Kodiak Airport.
This Class D airspace area is effective during
the specific dates and times established in
advance by a Notice to Airmen. The effective
date and time will thereafter be continuously
published in the Chart Supplement.
DEPARTMENT OF ENERGY
Final Rule
Federal Energy Regulatory
Commission, Department of Energy.
AGENCY:
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43591
Table of Contents
Paragraph Nos.
I. Background ................................................................................................................................................................................
II. Discussion ................................................................................................................................................................................
A. The NAESB WGQ Version 3.2 Business Practice Standards .........................................................................................
1. Modifications to Previous Version of Standards .....................................................................................................
B. NAESB’s Process ...............................................................................................................................................................
C. Adoption of Version 3.2 of the Standards ......................................................................................................................
D. Required Compliance Filings ...........................................................................................................................................
E. Implementation Schedule ................................................................................................................................................
III. Notice of Use of Voluntary Consensus Standards ................................................................................................................
IV. Incorporation by Reference ....................................................................................................................................................
V. Information Collection Statement ...........................................................................................................................................
VI. Environmental Analysis .........................................................................................................................................................
VII. Regulatory Flexibility Act .....................................................................................................................................................
VIII. Document Availability .........................................................................................................................................................
IX. Effective Date and Congressional Notification .....................................................................................................................
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1. In this Final Rule, the Federal
Energy Regulatory Commission
(Commission) amends its regulations at
18 CFR 284.12 to incorporate by
reference, with certain enumerated
exceptions,1 the latest version (Version
3.2) of business practice standards
adopted by NAESB’s WGQ applicable to
natural gas pipelines that NAESB
reported to the Commission on August
17, 2020 in place of the currently
incorporated version (Version 3.1) of
those business practice standards. This
Final Rule requires interstate natural gas
pipelines to file compliance filings with
the Commission by November 12, 2021
and to comply with the standards
incorporated by reference in this rule on
and after June 1, 2022.
2. The implementation of these
standards and regulations will promote
the additional efficiency and reliability
of the natural gas industries’ operations
thereby helping the Commission to
carry out its responsibilities under the
Natural Gas Act (NGA). Further, the
implementation of these standards will
enhance the natural gas industries’
computer security requirements.2 In
addition, the implementation of these
data requirements will provide
additional transparency to Informational
Postings websites and will improve
communication standards.
3. The NAESB WGQ Version 3.2
package of standards contains revisions
to the NAESB WGQ Version 3.1 package
of standards. As explained further
below, in response to the
recommendations in the Sandia
1 As explained below, we are not incorporating by
reference in this Final Rule the optional model
contracts and the eTariff-related standards included
in the North American Energy Standards Board
(NAESB) Wholesale Gas Quadrant (WGQ) Version
3.2 package of business practice standards.
2 As explained below, NAESB has developed and
adopted, in conjunction with Sandia National
Laboratories, a series of business practice standards
to protect the natural gas industries’ internet
security.
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National Laboratory (Sandia) 3 report,
NAESB updated the Quadrant
Electronic Delivery Mechanism (EDM)
Related Standards and internet
Electronic Transport (IET) Related
Standards to specifically: (1) Require the
implementation of fixes or patches for
known vulnerabilities as soon as
reasonably practicable in coordination
with other trading partners; (2) specify
notification timelines to provide notice
to trading partners of any systems or
software that have not been updated and
the potential impact of using the
vulnerable system; (3) include both
specific and broad adoptions of system
security measures and specific
notification and coordination during
outages with affected trading partners;
(4) maintain a minimum encryption
strength of 128 bits, (5) specify that
OpenPGP 4 should be used to create
public and private keys for privacy and
digital signature applications; (6)
specify Hyper-Text Transport Protocol
Secure (HTTPS) 5 whenever secure
communication is required to protect
information in transit and support
overall privacy needs; (7) use the largest
feasible key length consistent with
implementation of current business
processes; (8) state that secure websites
3 Sandia is a multidisciplinary national laboratory
and federally funded research and development
center for the U.S. Department of Energy’s (DOE)
National Nuclear Security Administration that
supports numerous federal, state, and local
government agencies, companies, and
organizations.
4 OpenPGP is an encryption standard defined by
the internet Engineering Task Force enabling design
and implementation free of licensing fees. At
present, the encryption method is generally
considered the most secure.
5 HTTPS authentication encrypts username and
password combinations as part of a Uniform
Resource Locator address. To obtain an HTTPS
connection, a web browser must contact a trusted,
commercial Certificate Authority, such as a NAESB
Authorized Certificate Authority, to obtain the web
server’s public key, and follow other applicable
HTTPS procedures.
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should employ individual user
credentials; and (9) encourage security
assessments and coordination between
customers, vendors, and trading
partners.
4. Further, in response to industry
requests or through the normal course of
WGQ activities, NAESB: (1) Updated the
Nominations Related Standards to allow
a Service Requester to determine which
rights of the contract its segmentation
nomination is using; (2) updated the
Quadrant EDM Related Standards to (i)
define a NAESB standard time frame for
information to be retained on a
pipeline’s Informational Postings
website, (ii) allow for processing
functions at the line item level on
Customer Activities websites and allow
for the use of icons and/or graphical
control elements for navigation and/or
processing functions, and (iii) make
minor revisions designed to add clarity,
update the minimum technical
characteristics to account for changes in
technology since the previous version
(Version 3.1) of the WGQ standards, and
update the minimum and suggested
operating systems and web browsers
that entities should support; (3) updated
multiple sets of standards to remove
references to the term ‘‘gigacalories’’
and add the term ‘‘gigajoules’’ as the
standard quantity for nominations,
confirmations, and scheduling in
Mexico; and (4) revised the NAESB
WGQ data sets or other technical
implementation documentation while
not resulting in modifications to the
underlying business practice standards.
I. Background
5. Since 1996, the Commission has
adopted regulations to standardize the
business practices and communication
methodologies of interstate natural gas
pipelines to create a more integrated
and efficient pipeline system. These
regulations have been promulgated in
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the Order No. 587 series of orders,6
wherein the Commission has
incorporated by reference standards for
interstate natural gas pipeline business
practices and electronic
communications that were developed
and adopted by NAESB’s WGQ. Upon
incorporation by reference, this version
of the standards will replace the
currently incorporated version (Version
3.1) of those business practice
standards.
6. On August 17, 2020, NAESB filed
a report informing the Commission that
it had adopted and ratified WGQ
Version 3.2 of its business practice
standards applicable to interstate
natural gas pipelines. Version 3.2 of the
WGQ includes business practice
standards developed and modified in
response to industry requests and
directives from the NAESB Board of
Directors. This version also includes the
standards developed in response to the
recommendations of Sandia, which in
2019 issued a cybersecurity surety
assessment of the NAESB standards
sponsored by DOE (Sandia Surety
Assessment),7 and the standards
developed to enable the use of
distributed ledger technologies when
transacting the NAESB Base Contract for
Sale and Purchase of Natural Gas.
7. The NAESB report identifies all the
changes made to the WGQ Version 3.1
Standards and summarizes the
deliberations that led to the changes
being made. It also identifies changes to
the existing standards that were
considered but not adopted due to a
lack of consensus or other reasons.
8. On February 18, 2021, the
Commission issued a Notice of
Proposed Rulemaking proposing to
amend its regulations to incorporate by
reference, with certain enumerated
exceptions, the NAESB WGQ Version
6 This series of orders began with the
Commission’s issuance of Standards for Bus. Pracs.
of Interstate Nat. Gas Pipelines., Ord. No. 587, 61
FR 39053 (July 26, 1996), FERC Stats. & Regs.
¶ 31,038 (1996) (cross-referenced at 76 FERC
¶ 61,042).
7 In April 2017, NAESB announced that Sandia,
through funding provided by DOE, would be
performing a surety assessment of the NAESB
standards. As determined by Sandia and DOE, the
purpose of the surety assessment was to analyze
cybersecurity elements within the standards,
focusing on four areas: (1) The NAESB Certification
Program for Accredited Certification Authorities,
including the Wholesale Electric Quadrant (WEQ)–
012 Public Key Infrastructure Business Practice
Standards, the NAESB Accreditation Requirements
for Authorized Certificate Authorities, and the
Authorized Certification Authority Process; (2) the
WEQ Open Access Same-Time Information Systems
suite of standards; (3) the WGQ and Retail Markets
Quadrant IET and Quadrant EDM Related Standards
Manual; and (4) a high-level dependency analysis
between the gas and electric markets to evaluate the
different security paradigms the markets employ.
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3.2 business practice standards
(referenced above) applicable to natural
gas pipelines.8
9. In response to the Version 3.2
NOPR, NAESB and the Interstate
Natural Gas Association of America
(INGAA) filed comments. NAESB
clarifies that Standards 4.3.60 and
10.3.16 do not require multi-factor (e.g.,
two-factor) authentication on an
individual basis. NAESB clarifies that
Standard 4.3.60 states that a Customer
Activities website should be protected
by [Hyper-Text Transport Protocol]
(HTTP) 9 Basic Authentication using
transport layer security and require a
single logon/password pair for each user
session. NAESB further clarifies that
Standard 10.3.16 states that trading
partners should implement HTTP Basic
Authentication using transport layer
security.10 INGAA supports NAESB’s
clarifying comments.11
10. INGAA expresses support for the
Commission’s proposal to incorporate
by reference NAESB’s WGQ Version 3.2
business practice standards. INGAA also
supports the Commission’s proposal in
the Version 3.2 NOPR, but urges the
Commission to ensure that
implementation of a Final Rule in this
proceeding occurs for the first gas day
of the month, but not prior to April 1,
2022, after the winter heating season.
INGAA states that implementation of a
Final Rule in this proceeding will
require substantial time and effort from
both pipelines and their customers to
alter business systems, scheduling, and
coordination processes and, thus, it
would be best to schedule
implementation to not occur during the
winter heating season.12
11. Further, INGAA states that
requiring implementation to occur for
the first gas day of the month is
important for both pipelines and
shippers. INGAA explains that while
pipelines update their software to
accommodate the new NAESB version
ahead of the implementation date, both
pipelines and shippers need to ensure
that contract, nomination, allocation,
invoice, and other changes will be fully
in place and working properly with the
start of the gas month. INGAA states
that this is consistent with the
8 Standards for Bus. Pracs. of Interstate Nat. Gas
Pipelines, Notice of Proposed Rulemaking, 86 FR
12879 (Mar. 5, 2021), 174 FERC ¶ 61,103 (2021)
(Version 3.2 NOPR).
9 HTTP is the original communications protocol
of the internet which enables a web browser to
depict text, pictures, shapes, live data, and click
targets on a web browser. However, username and
password combinations are not encrypted in HTTP
Basic Authentication.
10 NAESB Cmts. at 1.
11 INGAA Cmts. at 3.
12 Id. at 2.
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industry’s monthly billing cycle and
shall avoid the complications of a midmonth transition.13
II. Discussion
A. The NAESB WGQ Version 3.2
Business Practice Standards
1. Modifications to Previous Version of
Standards
a. Modifications in Response to the
Sandia Surety Assessment
12. NAESB revised previously
incorporated standards and developed
new standards in response to the
recommendations in the Sandia Surety
Assessment. Specifically, NAESB
adopted revisions to the WGQ EDM
Related Business Practice Standards,
which establish the framework for the
electronic dissemination and
communication of information between
parties in the North American wholesale
gas marketplace, and to the WGQ IET
Related Business Practice Standards,
which define the implementation of
various technologies necessary to
communicate transactions and other
electronic data using standard protocols
for electronic commerce over the
internet between trading partners. First,
NAESB adopted two new standards,
4.3.109 and 10.3.28, to provide that
trading partners should evaluate
software fixes or patches for known
vulnerabilities within 30 days and
implement the fix or patch as soon as
reasonably practicable based on the
severity of the risk. Second, NAESB
adopted two new standards, 4.3.110 and
10.3.29, to provide that trading partners
should mutually agree to the version of
the EDM and IET to be used. Third, the
new standards specify notification and
coordination timelines with trading
partners, where applicable, to address
vulnerable systems or software as soon
as possible. Fourth, the Sandia Surety
Assessment recommended that NAESB
consider guidelines for configuration
and logging, network traffic monitoring,
alerting systems, and manual continuity
of operations in the event of abnormal
behavior or failure conditions within
the system. In response, NAESB added
language to new Standards 4.3.110 and
10.3.28 to include both specific and
broad adoptions of such system security
measures.
13. Further, NAESB added language
to existing Standards 4.3.60, 4.3.61,
10.2.33, and 10.3.25 to clarify the
Transport Layer Security protocol,14
13 Id.
14 The National Institute of Standards and
Technology Special Pub. 800–52 requires
government Transport Layer Security servers and
clients to support Transport Layer Security Version
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which encrypts data to hide information
from electronic observers on the
internet. NAESB also deleted all
references to the Secure Sockets Layer
protocol in the standards.
14. Concerning identification key
lengths, the Sandia Surety Assessment
recommended that Rivest-ShamirAdelman keys 15 must be no shorter
than 2048 bits, Elliptic Curve Digital
Signature Algorithm keys 16 must be no
shorter than 224 bits, Hash 17 algorithms
should be from the Secure Hash
Algorithm (SHA)–2 18 or SHA–3
families, and acceptable Advanced
Encryption Standard key lengths range
from 128, to 192, to 256. The Sandia
Surety Assessment recommended that,
in general, implementors use the largest
feasible key length consistent with
implementation of current business
processes. In response, NAESB deleted
Standard 4.3.83 to remove legacy
support references and maintain a
minimum encryption strength of 128
bits. Further, NAESB revised existing
Standards 10.2.34 and 10.3.15 to delete
a proprietary Pretty Good Privacy
(PGP) 19-related hyperlink and to
accommodate license-free OpenPGP,
respectively. NAESB also adopted a new
Standard 10.2.39 to specify that
OpenPGP should be used to create
public and private keys for privacy and
digital signature applications.
15. Further, NAESB revised existing
Standards 4.3.60, 4.3.84, 10.3.4, and
10.3.16 to specify HTTPS, which is an
encrypted version of HTTP, whenever a
secure communication is required to
protect information in transit and
support overall privacy needs.
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b. Modifications in Response to Industry
Requests
16. The following section describes
standards development efforts
undertaken by NAESB in response to
industry requests or through the normal
course of WGQ activities that resulted in
modifications to the Nomination
Related Standards, Quadrant EDM
1.2 and recommends support for Transport Layer
Security Version 1.3 by the year 2024.
15 Rivest-Shamir-Adelman is a public key
infrastructure algorithm composed of a public
component and a private component that is
typically installed on a recognized Certificate
Authority.
16 Elliptic Curve Digital Signature Algorithm
public keys generate an encrypted signature to
validate data.
17 A Hash is a cryptology technique used for
digital signatures in which a series of numbers that
may represent, for example, a password, an image,
a document, or an executable file is used to generate
a cryptographic hash (i.e., a large number).
18 SHA–2 is a set of cryptographic hash functions.
19 PGP is a proprietary (i.e., an organization must
pay to use it) encryption program developed to
enhance the confidentiality and integrity of data.
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Related Standards, and an effort that
impacted multiple sets of standards.
NAESB made corresponding revisions,
where appropriate, to the related data
sets and technical implementation as
part of the standards development
effort.
i. Nomination Related Standards
17. NAESB revised existing Standards
1.3.27, 1.4.1, and 1.4.2 to add a new
data element ‘‘Capacity Block ID’’ to
allow a Service Requester to determine
which primary point rights of the
contract their segmented nomination 20
is using and eliminate an existing
manual business process from the TSP
to automate the business process.
ii. Quadrant Electronic Delivery
Mechanism Related Standards
18. NAESB developed two new
standards, Standard 4.3.107 to establish
a standard data retention period for
retrieval of Operationally Available data
from the Informational Postings website,
and Standard 4.3.108, to establish a
standard data retention period for
retrieval of Notices for the subcategories
of Critical, Non-Critical, and Planned
Service Outage from the Informational
Postings website.
iii. Revisions Impacting Multiple
Standards
19. NAESB revised multiple
standards 21 and data sets 22 to remove
references to the term ‘‘gigacalories’’
and add the term ‘‘gigajoules,’’ as the
standard quantity for nominations,
confirmations, and scheduling in
Mexico.
iv. Other Material in NAESB’s Report
20. NAESB revised multiple data sets
which impacted technical
implementation documentation only.
21. Further, NAESB revised its
optional model contracts and
corresponding Mexican and Canadian
Addendums to reflect a standard digital
representation of natural gas trade
events. NAESB states that these
revisions are intended to capitalize on
smart contracts and distributed ledger
technologies.
20 In order for a Service Requester to have control
over its segmented nomination(s), the
Transportation Service Provider (TSP) will require
a ‘‘Capacity Block ID’’ to be submitted with each
nomination line item specifying a Transaction Type
of ‘‘Segmented.’’
21 NAESB WGQ Version 3.2 Standards 1.3.14,
1.3.15, 1.3.82, and 3.3.3.
22 NAESB WGQ Version 3.2 Standards 0.4.1
through 0.4.3, 1.4.1, 1.4.3 through 1.4.6, 2.4.1, 2.4.6,
2.4.17, 3.4.1, 3.4.2, and 5.4.24 through 5.4.26.
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B. NAESB’s Process
22. NAESB used its consensus
procedures to develop and approve the
WGQ Version 3.2 Standards. As the
Commission found in Order No. 587,
the adoption of consensus standards is
appropriate, because the consensus
process helps ensure the reasonableness
of the standards by requiring that the
standards draw support from a broad
spectrum of industry participants
representing all segments of the
industry. Moreover, since the industry
itself must conduct business under
these standards, the Commission’s
regulations should reflect those
standards that have the widest possible
support. In section 12(d) of the National
Technology Transfer and Advancement
Act of 1995 (NTT&AA),23 Congress
affirmatively requires federal agencies to
use technical standards developed by
voluntary consensus standards
organizations, like NAESB, as means to
carry out policy objectives or activities
determined by the agencies unless an
agency determines that the use of such
standards would be inconsistent with
applicable law or otherwise impractical.
C. Adoption of Version 3.2 of the
Standards
23. In the Version 3.2 NOPR, the
Commission proposed to incorporate by
reference, in its regulations, Version 3.2
of the NAESB WGQ consensus business
practice standards, with the exception
of NAESB’s standards specifying the
terms of optional model contracts and
the eTariff-related standards.24 None of
the commenters opposed the
Commission’s proposal to incorporate
by reference the NAESB WGQ Version
3.2 business practice standards as
proposed in the Version 3.2 NOPR.25
24. After a review of the comments
filed in response to the Version 3.2
NOPR, and because the revisions made
by NAESB in this version of the
standards are designed to enhance the
natural gas industries’ system and
software security measures and to
clarify the processing of certain business
transactions, we amend Part 284 of the
Commission’s regulations to incorporate
by reference the NAESB WGQ Version
3.2 business practice standards, with the
exceptions (as explained in the Version
3.2 NOPR) of the optional model
contracts and the eTariff-related
standards.
23 Public Law 104–113, 12(d), 110 Stat. 775
(1996).
24 Version 3.2 NOPR, 174 FERC ¶ 61,103 at n.1 &
P 19.
25 NAESB’s clarifying comments regarding
revised existing Standards 4.3.60 and 10.3.16 are
discussed separately in section II above.
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D. Required Compliance Filings
25. As suggested by INGAA, we have
selected an implementation schedule for
compliance with this Final Rule that
delays implementation until after the
2021–2022 winter heating period. To
implement the standards that we are
incorporating by reference in this Final
Rule, we will require each interstate
natural gas pipeline to file a separate
tariff record reflecting the changed
standards by November 12, 2021, to take
effect on June 1, 2022 26 We are adopting
this implementation schedule to give
the interstate natural gas pipelines
subject to these standards adequate time
to implement these changes.
E. Implementation Schedule
26. To implement these standards, we
require interstate natural gas pipelines
to file tariff records to reflect the
changed standards by November 12,
2021. None of the comments took issue
with the Commission’s explanation of
its policies on tariff filings and on
waiver requests to comply with these
standards.27 Therefore, we are not
modifying these policies in this Final
Rule and affirm the explanation of those
policies the Commission made in the
Version 3.2 NOPR.
27. In addition, consistent with the
requirements in Order No. 587–W,28 we
are including the following filing
requirements for the November 12, 2021
compliance filing 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.
(1) The pipelines must designate a
single tariff record under which every
NAESB standard currently incorporated
by reference by the Commission is
listed.29 This section should be a
separate tariff record under the
Commission’s electronic tariff filing
requirement and should be filed
electronically using the eTariff portal
using the Type of Filing Code 580. We
will post on the Commission’s eLibrary
website (under Docket No. RM96–1–
042) a sample tariff record, to provide
filers an illustrative example to aid them
in preparing their compliance filings; 30
(2) For each standard, each pipeline
must specify in the tariff record a list of
all the NAESB standards currently
incorporated by reference by the
Commission:
(a) whether the standard is
incorporated by reference;
(b) for those standards not
incorporated by reference, the tariff
provision that complies with the
standard; 31 and
(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.32
(3) If the pipeline is requesting a
continuation of a previously granted
waiver or extension of time to comply
with certain NAESB WGQ standards, 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 of time was granted.
III. Notice of Use of Voluntary
Consensus Standards
28. Office of Management and Budget
(OMB) Circular A–119 (section 11) (Feb.
10, 1998) provides that when a federal
agency issues or revises a regulation
containing a standard, the agency
should publish a statement in the Final
Rule stating whether the adopted
standard is a voluntary consensus
standard or a government-unique
standard. In this Final Rule, we are
incorporating by reference voluntary
consensus standards developed by
NAESB’s 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
30 Id.
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26 To
aid in compliance, promptly after issuance
of this Final Rule, we will post a sample tariff
record on the Commission’s website that may be
accessed at https://www.ferc.gov/ferc-online/
elibrary. All interstate natural gas pipelines are to
file their tariff records in conformance with this
sample tariff record.
27 Version 3.2 NOPR, 174 FERC ¶ 61,103 at PP
20–24.
28 Standards for Bus. Pracs. of Interstate Nat. Gas
Pipelines, Ord. No. 587–W, 80 FR 67302 (Nov. 2,
2015), 153 FERC ¶ 61,061, at P 42 (2015) (Ord. No.
587–W).
29 See supra n.21.
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31 For example, pipelines are required to include
the full text of the NAESB nomination and capacity
release timeline standards (WGQ Standards 1.3.2(ivi) and 5.3.2, respectively) in their tariffs. See, e.g.,
Standards for Bus. Pracs. of Interstate Nat. Gas
Pipelines, Ord. No. 587–U, 75 FR 16337 (Apr. 1,
2010), 130 FERC ¶ 61,212, at P 39 & n.42 (2010).
Each pipeline’s submittal is to identify which tariff
provision complies with each of these standards.
32 Shippers can use the Commission’s electronic
tariff system to locate the tariff record containing
the NAESB WGQ standards, which will indicate the
docket number in which any waiver or extension
of time was granted.
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applicable law or otherwise
impractical.33
IV. Incorporation by Reference
29. The Office of the Federal Register
requires agencies incorporating material
by reference in final rules to discuss the
ways that the materials it incorporates
by reference are reasonably available to
interested parties and how interested
parties can obtain the materials.34 The
regulations also require agencies to
summarize, in the preamble of the final
rule, the material it incorporates by
reference. The standards that we are
incorporating by reference in this Final
Rule consist of seven suites of NAESB
WGQ Business Practice Standards that
address a variety of topics and are
designed to streamline the transactional
processes for the wholesale natural gas
industry by promoting a more
competitive and efficient market. These
include the: Additional Business
Practice Standards; Nominations
Related Business Practice Standards;
Flowing Gas Related Business Practice
Standards; Invoicing Related Business
Practice Standards; Quadrant Electronic
Delivery Mechanism Related Business
Practice Standards; Capacity Release
Related Business Practice Standards;
and internet Electronic Transport
Related Business Practice Standards. We
summarize these standards below.
30. The Additional Business Practice
Standards address six areas:
Creditworthiness; Storage Information;
Gas/Electric Operational
Communications; Operational Capacity;
Unsubscribed Capacity; and Location
Data Download.
• The Creditworthiness related
standards describe requirements for the
exchange of information, notification,
and communication between parties
during the creditworthiness evaluation
process.
• The Storage Information related
standards define the information to be
provided to natural gas service
requesters related to storage activities
and/or balances.
• The Gas/Electric Operational
Communications related standards
define communication protocols
intended to improve coordination
between the gas and electric industries
in daily operational communications
between transportation service
providers and gas-fired power plants.
The standards include requirements for
communicating anticipated power
generation fuel for the upcoming day as
33 Public Law 104–113, 12(d), 110 Stat. 775
(1996), 15 U.S.C. 272 note (1997).
34 1 CFR 51.5 (2020). See Incorporation by
Reference, 79 FR 66267 (Nov. 7, 2014).
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well as any operating problems that
might hinder gas-fired power plants
from receiving contractual gas
quantities.
• The Operational Capacity related
standards define requirements of the
transportation service provider related
to the reporting and requesting of a
transportation service provider’s
operational capacity, total scheduled
quantity, and operationally available
capacity.
• The Unsubscribed Capacity related
standards define requirements of the
transportation service provider related
to the reporting and requesting of a
transportation service provider’s
available unsubscribed capacity.
• The Location Data Download
related standards define requirements
for the use of codes assigned by the
transportation service provider for
locations and common codes for parties
communicating electronically.
31. The Nominations Related
Business Practice Standards define the
process by which a natural gas service
requester with a natural gas
transportation contract nominates (or
requests) service from a pipeline or a
transportation service provider for the
delivery of natural gas.
32. The Flowing Gas Related Business
Practice Standards define the business
processes related to the communication
of entitlement rights of flowing gas at a
location, of the entitlement rights on a
contractual basis, of the management of
imbalances, and of the measurement
and gas quality information of the actual
flow of gas.
33. The Invoicing Related Business
Practice Standards define the process
for the communication of charges for
services rendered (Invoice),
communication of details about funds
rendered in payment for services
rendered (Payment Remittance), and
communication of the financial status of
a customer’s account (Statement of
Account).
34. The Quadrant Electronic Delivery
Mechanism Related Business Practice
Standards define the framework for the
electronic dissemination and
communication of information between
parties in the North American wholesale
gas marketplace for Electronic Data
Interchange/EDM transfers, batch flat
file/EDM transfers, informational
postings websites, Electronic Bulletin
Boards/EDM, and interactive flat file/
EDM.
35. The Capacity Release Related
Business Practice Standards define the
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business processes for communication
of information related to the selling of
all or any portion of a transmission
service requester’s contract rights.
36. The internet Electronic Transport
Related Business Practice Standards
define the implementation of various
technologies necessary to communicate
transactions and other electronic data
using standard protocols for electronic
commerce over the internet between
trading partners.
37. The Commission’s regulations
provide that copies of the standards
incorporated by reference may be
obtained from NAESB at https://
www.naesb.org// or (713) 356–0060.
Once the Novel Coronavirus Disease
(COVID–19) restrictions are lifted,
copies of the standards may be
inspected at the Federal Energy
Regulatory Commission, Public
Reference Room, 888 First Street NE,
Washington, DC 20426, Phone: (202)
502–8371, https://www.ferc.gov/. At this
time, the Commission has suspended
access to the Commission’s Public
Reference Room due to the President’s
March 13, 2020 proclamation declaring
a National Emergency concerning
COVID–19.
38. NAESB is a private consensus
standards developer that develops
voluntary wholesale and retail
standards related to the energy industry.
The procedures used by NAESB make
its standards reasonably available to
those affected by Commission
regulations, which generally is
comprised of entities that have the
means to acquire the information they
need to effectively participate in
Commission proceedings. Participants
can join NAESB, for an annual
membership cost of $8,000, which
entitles them to full participation in
NAESB and enables them to obtain
these standards at no additional cost.
Non-members may obtain the Individual
Standards Manual or Booklets for each
of the seven Manuals by email for $250
per manual, which in the case of these
standards would total $1,750. Nonmembers also may obtain the complete
set of Standards Manuals, Booklets, and
Contracts on USB flash drive 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. In
addition, NAESB considers requests for
waivers of the charges on a case-by-case
basis depending on need.
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V. Information Collection Statement
39. OMB regulations require that
OMB approve certain reporting, record
keeping, and public disclosure
requirements (information collection)
imposed by an agency.35 Therefore, we
are submitting this proposed
information collection to OMB for
review in accordance with section
3507(d) of the Paperwork Reduction Act
of 1995. Upon approval of a collection
of information, OMB will assign an
OMB control number and an expiration
date. Respondents subject to the filing
requirements of a rule will not be
penalized for failing to respond to these
collections of information unless the
collection of information displays a
valid OMB control number.
40. The Commission solicited
comments on the need for this
information, whether the information
will have practical utility, the accuracy
of the provided burden estimates, ways
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. No comments
were filed raising any objections to the
burden estimate presented in the
Version 3.2 NOPR. Accordingly, we will
use that same burden estimate in this
Final Rule.
41. Public Reporting Burden: 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 information technology
work).
42. The collections of information
related to this Final Rule fall under
FERC–545 (Gas Pipeline Rates: Rate
Change (Non-Formal)) 36 and FERC–
549C (Standards for Business Practices
of Interstate Natural Gas Pipelines).37
The following estimates of reporting
burden are related only to this Final
Rule and include the costs to pipelines
for compliance with the Commission’s
directives in this Final Rule. The burden
estimates are primarily related to
implementing these standards and
regulations and will not result in
ongoing costs.
35 5
CFR 1320.11 (2020).
covers rate change filings made by
natural gas pipelines, including tariff changes.
37 FERC–549C covers Standards for Business
Practices of Interstate Natural Gas Pipelines.
36 FERC–545
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RM96–1–042 FINAL RULE (STANDARDS FOR BUSINESS PRACTICES OF INTERSTATE NATURAL GAS PIPELINES)
Number of
respondents 38
Annual
number of
responses
per respondent
Total number
of responses
Average burden
hr. per response
Total annual
burden hours &
total annual
cost 39
Annual costs
per
respondent
(1)
(2)
(1)*(2) = (3)
(4)
(3)*(4) = (5)
(5)/(1) = (6)
FERC–545 (one-time) ........................
178
1
178
10 hrs.; $1,010
FERC–549C (one-time) .....................
178
1
178
100 hrs.;
$10,100.
Total ...................................................
........................
........................
356
...........................
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The one-time burden (for both the
FERC–545 and FERC–549C) will take
place in Year 1 and will be averaged
over three years:
FERC–545: 1,780 hours ÷ 3 = 593 hours/
year over three years
FERC–549C: 17,800 hours ÷ 3 = 5,933
hours/year over three years
The number of responses is also
averaged over three years (for both the
FERC–545 and FERC–549C):
FERC–545: 178 responses ÷ 3 = 59
responses/year
FERC–549C: 178 responses ÷ 3 = 59
responses/year
The responses and burden for Years
1–3 will total respectively as follows:
Year 1: 59 responses; 593 hours (FERC–
545); 5,933 hours (FERC–549C)
Year 2: 59 responses; 593 hours (FERC–
545); 5,933 hours (FERC–549C)
Year 3: 59 responses; 593 hours (FERC–
545); 5,933 hours (FERC–549C)
Title: FERC–545, Gas Pipeline Rates:
Rates Change (Non-Formal); FERC–
549C, Standards for Business Practices
of Interstate Natural Gas Pipelines.
Action: Proposed information
collections.
38 The number of respondents is the number of
entities in which a change in burden from the
current standards to the proposed exists, not the
total number of entities from the current or
proposed standards that are applicable.
39 The estimated hourly cost (salary plus benefits)
provided in this section is based on the salary
figures for May 2019 posted by the Bureau of Labor
Statistics for the Utilities sector (available at https://
www.bls.gov/oes/current/naics3_221000.htm) and
scaled to reflect benefits using the relative
importance of employer costs for employee
compensation from June 2020 (available at https://
www.bls.gov/news.release/ecec.nr0.htm). The
hourly estimates for salary plus benefits are:
Computer and Information Systems Manager
(Occupation Code: 11–3021), $101.58
Computer and Information Analysts (Occupation
Code: 15–1210), $87.42
Electrical Engineer (Occupation Code: 17–2071),
$70.19
Legal (Occupation Code: 23–0000), $142.65
The average hourly cost (salary plus benefits),
weighting all of these skill sets evenly, is $100.50.
We round it to $101/hour.
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OMB Control Nos.: 1902–0154 (FERC–
545), 1902–0174 (FERC–549C).
Respondents: Business or other for
profit (e.g., Natural Gas Pipelines,
applicable to only a few small
businesses).
Frequency of Responses: One-time
implementation (related to business
procedures, capital/start-up).
Necessity of Information: In response
to the recommendations in the Sandia
report, the revisions in this Final Rule
to the Commission’s regulations will
upgrade current business practices and
communication standards by updating
the Quadrant EDM Related Standards
and IET Related Standards to
specifically: (1) Require the
implementation of fixes or patches for
known vulnerabilities as soon as
reasonably practicable in coordination
with other trading partners; (2) specify
notification timelines to provide notice
to trading partners of any systems or
software that have not been updated and
the potential impact of using the
vulnerable system; (3) include both
specific and broad adoptions of system
security measures and specific
notification and coordination during
outages with affected trading partners;
(4) maintain a minimum encryption
strength of 128 bits; (5) specify that
OpenPGP should be used to create
public and private keys for privacy and
digital signature applications; (6)
specify HTTPS whenever secure
communication is required to protect
information in transit and support
overall privacy needs; (7) use the largest
feasible key length consistent with
implementation of current business
processes; (8) state that secure websites
should employ individual user
credentials; and (9) encourage security
assessments and coordination between
customers, vendors, and trading
partners.
43. Further, in response to industry
requests or through the normal course of
WGQ activities, the revisions in this
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1,780 hrs.;
$179,780.
17,800 hrs.;
$1,797,800.
19,580 hrs.;
$1,977,580.
$1,010
$10,100
........................
Final Rule to the Commission’s
regulations will upgrade current
business practices and communication
standards by specifically: (1) Updating
the Nominations Related Standards to
allow a Service Requester to determine
which rights of the contract its
segmentation nomination is using; (2)
updating the Quadrant EDM Related
Standards to (i) define a NAESB
standard time frame for information to
be retained on a pipeline’s
Informational Postings website, (ii)
allow for processing functions at the
line item level on Customer Activities
websites and allow for the use of icons
and/or graphical control elements for
navigation and/or processing functions,
and (iii) make minor revisions designed
to add clarity, update the minimum
technical characteristics to account for
changes in technology since the
previous version (Version 3.1) of the
WGQ standards, and update the
minimum and suggested operating
systems and web browsers that entities
should support; (3) updating multiple
sets of standards to remove references to
the term ‘‘gigacalories’’ and add the
term ‘‘gigajoules’’ as the standard
quantity for nominations, confirmations,
and scheduling in Mexico; and (4)
revising the NAESB WGQ data sets or
other technical implementation
documentation while not resulting in
modifications to the underlying
business practice standards. The
package of standards also includes
minor corrections. The implementation
of these data requirements will provide
additional transparency to Informational
Postings websites and will improve
communication standards. The
implementation of these standards and
regulations will promote the additional
efficiency and reliability of the natural
gas industries’ operations thereby
helping the Commission to carry out its
responsibilities under the NGA. In
addition, the Commission’s Office of
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Enforcement will use the data for
general industry oversight.
Internal Review: We have reviewed
the requirements pertaining to business
practices of interstate natural gas
pipelines and have determined that the
revisions are necessary to establish a
more efficient and integrated pipeline
grid. These requirements conform to the
Commission’s plan for efficient
information collection, communication,
and management within the natural gas
pipeline industries. We determined,
through our internal review, that there
is specific, objective support for the
burden estimates associated with the
information requirements.
44. 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: DataClearance@ferc.gov,
telephone: (202) 502–8663, fax: (202)
273–0873.
45. Comments concerning the
collection of information(s) and the
associated burden estimate(s), should be
sent to the contact listed above 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: (202) 395–0710; fax: (202)
395–4718.
VI. Environmental Analysis
46. 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.40 The actions that we take
here fall within categorical exclusions
in the Commission’s regulations for
rules that are clarifying, corrective, or
procedural, for information gathering,
analysis, and dissemination, and for
rules regarding sales, exchange, and
transportation of natural gas that require
no construction of facilities.41
Therefore, an environmental review is
unnecessary and has not been prepared
as part of this Final Rule.
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VII. Regulatory Flexibility Act
47. The Regulatory Flexibility Act of
1980 (RFA) 42 generally requires a
description and analysis of final rules
40 Reguls. Implementing the Nat’l Envt’l Pol’y Act,
Ord. No. 486, 52 FR 47897 (Dec. 17, 1987), FERC
Stats. & Regs. Preambles 1986–1990 ¶ 30,783 (1987)
(cross-referenced at 41 FERC ¶ 61,284).
41 See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), and
380.4(a)(27) (2020).
42 5 U.S.C. 601–612.
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that will have significant economic
impact on a substantial number of small
entities. The Commission is not
required to make such analysis if
proposed regulations would not have
such an effect.
48. As we stated in the WGQ Version
3.2 NOPR, approximately 178 interstate
natural gas pipelines, both large and
small, are potential respondents subject
to the requirements adopted by this
rule. Most of the natural gas pipelines
regulated by the Commission do not fall
within the RFA’s definition of a small
entity,43 which is currently defined for
natural gas pipelines as a company that,
in combination with its affiliates, has
total annual receipts of $30 million or
less.44 For the year 2019, only 11
companies not affiliated with larger
companies had annual revenues in
combination with its affiliates of $30
million or less and therefore could be
considered a small entity under the
RFA. This represents about six percent
of the total universe of potential
respondents that may have a significant
burden imposed on them. We estimate
that the one-time implementation cost
of the proposals in this Final Rule is
$1,977,580 (or $11,110 per entity,
regardless of entity size).45 We do not
consider the estimated $11,110 impact
per entity to be significant. Moreover,
these requirements are designed to
benefit all customers, including small
businesses that must comply with them.
Further, as noted above, adoption of
consensus standards helps ensure the
reasonableness of the standards by
requiring that the standards draw
support from a broad spectrum of
industry participants representing all
segments of the industry. Because of
that representation and the fact that
industry conducts business under these
standards, the Commission’s regulations
should reflect those standards that have
the widest possible support.
49. Accordingly, pursuant to section
605(b) of the RFA,46 the regulations
being promulgated herein should not
have a significant economic impact on
a substantial number of small entities.
43 See 5 U.S.C. 601(3) citing section 3 of the Small
Business Act (SBA), 15 U.S.C. 623. Section 3 of the
SBA defines a ‘‘small business concern’’ as a
business which is independently owned and
operated, and which is not dominant in its field of
operation (2019).
44 13 CFR 121.201 (Subsector 486—Pipeline
Transportation; North American Industry
Classification System code 486210; Pipeline
Transportation of Natural Gas) (2020). ‘‘Annual
Receipts’’ are total income plus cost of goods sold.
45 This number is derived by dividing the total
cost figure by the number of respondents.
$1,977,580/178 = $11,110.
46 5 U.S.C. 605(b).
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VIII. Document Availability
50. In addition to publishing the full
text of this document in the Federal
Register, we provide all interested
persons an opportunity to view and/or
print the contents of this document via
the internet through the Commission’s
Home Page (https://www.ferc.gov/). At
this time, we have suspended access to
the Commission’s Public Reference
Room due to the President’s March 13,
2020 proclamation declaring a National
Emergency concerning COVID–19.
51. 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.
52. User assistance is available for
eLibrary and the Commission’s website
during normal business hours from the
Commission’s 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. Email
the Public Reference Room at
public.referenceroom@ferc.gov.
IX. Effective Date and Congressional
Notification
53. These regulations are effective
October 12, 2021. We have 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. This Final Rule is
being submitted to the Senate, House,
and Government Accountability Office.
List of Subjects in 18 CFR Part 284
Incorporation by reference, Natural
gas, Reporting and recordkeeping
requirements.
By direction of the Commission.
Issued: July 15, 2021.
Debbie-Anne A. Reese,
Deputy Secretary.
In consideration of the foregoing, we
amend 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
1. The authority citation for part 284
continues to read as follows:
■
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Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Rules and Regulations
Authority: 15 U.S.C. 717–717z, 3301–
3432; 42 U.S.C. 7101–7352; 43 U.S.C. 1331–
1356.
2. Amend § 284.12 by revising
paragraphs (a)(1) and (2) to read as
follows:
■
§ 284.12 Standards for pipeline business
operations and communications.
jbell on DSKJLSW7X2PROD with RULES
(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.
VerDate Sep<11>2014
16:06 Aug 09, 2021
Jkt 253001
(i) Additional Standards (Version 3.2,
August 15, 2020);
(ii) Nominations Related Standards
(Version 3.2, August 15, 2020);
(iii) Flowing Gas Related Standards
(Version 3.2, August 15, 2020);
(iv) Invoicing Related Standards
(Version 3.2, August 15, 2020);
(v) Quadrant Electronic Delivery
Mechanism Related Standards (Version
3.2, August 15, 2020);
(vi) Capacity Release Related
Standards (Version 3.2, August 15,
2020); and
(vii) internet Electronic Transport
Related Standards (Version 3.2, August
15, 2020).
(2) This incorporation by reference
was approved by the Director of the
Federal Register in accordance with 5
U.S.C. 552(a) and 1 CFR part 51. Copies
PO 00000
Frm 00010
Fmt 4700
Sfmt 9990
of these standards may be obtained from
the North American Energy Standards
Board, 801 Travis Street, Suite 1675,
Houston, TX 77002, Phone: (713) 356–
0060. NAESB’s website is at https://
www.naesb.org/. Copies may be
inspected at the Federal Energy
Regulatory Commission, Public
Reference Room, 888 First Street NE,
Washington, DC 20426, Phone: (202)
502–8371, https://www.ferc.gov/, or at
the National Archives and Records
Administration (NARA). For
information on the availability of this
material at NARA, email fr.inspection@
nara.gov, or go to: www.archives.gov/
federal-register/cfr/ibr-locations.html.
*
*
*
*
*
[FR Doc. 2021–16915 Filed 8–9–21; 8:45 am]
BILLING CODE 6717–01–P
E:\FR\FM\10AUR1.SGM
10AUR1
]]>Agencies
[Federal Register Volume 86, Number 151 (Tuesday, August 10, 2021)]
[Rules and Regulations]
[Pages 43590-43598]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-16915]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 284
[Docket No. RM96-1-042; Order No. 587-Z]
Standards for Business Practices of Interstate Natural Gas
Pipelines
AGENCY: Federal Energy Regulatory Commission, Department of Energy.
ACTION: Final rule.
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SUMMARY: The Federal Energy Regulatory Commission is amending its
regulations to incorporate by reference, with certain enumerated
exceptions, the latest version (Version 3.2) of business practice
standards adopted by the Wholesale Gas Quadrant of the North American
Energy Standards Board (NAESB) applicable to natural gas pipelines in
place of the currently incorporated version (Version 3.1) of those
business practice standards. The revisions made by NAESB in this
version of the standards are designed to enhance the natural gas
industries' system and software security measures and to clarify the
processing of certain business transactions.
DATES:
Effective date: This rule is effective October 12, 2021.
Compliance date: Compliance filings required by this rule are due
on November 12, 2021 and compliance with the standards incorporated in
this rule is required on and after June 1, 2022.
Incorporation by reference: The incorporation by reference of
certain publications listed in this rule is approved by the Director of
the Federal Register as of October 12, 2021.
FOR FURTHER INFORMATION CONTACT:
Stanley Wolf (technical issues), Office of Energy Policy and
Innovation, Federal Energy Regulatory Commission, 888 First Street NE,
Washington, DC 20426, (202) 502-6841, [email protected].
Oscar F. Santillana (technical issues), Office of Energy Market
Regulation, Federal Energy Regulatory Commission, 888 First Street NE,
Washington, DC 20426, (202) 502-6392, [email protected].
Robert McLean (legal issues), Office of the General Counsel, Federal
Energy Regulatory Commission, 888 First Street NE, Washington, DC
20426, (202) 502-8156, [email protected].
SUPPLEMENTARY INFORMATION:
Order No. 587-Z
Final Rule
(Issued July 13, 2021)
[[Page 43591]]
Table of Contents
Paragraph Nos.
I. Background........................................ 5
II. Discussion....................................... 12
A. The NAESB WGQ Version 3.2 Business Practice 12
Standards.......................................
1. Modifications to Previous Version of 12
Standards...................................
B. NAESB's Process............................... 22
C. Adoption of Version 3.2 of the Standards...... 23
D. Required Compliance Filings................... 25
E. Implementation Schedule....................... 26
III. Notice of Use of Voluntary Consensus Standards.. 28
IV. Incorporation by Reference....................... 29
V. Information Collection Statement.................. 39
VI. Environmental Analysis........................... 46
VII. Regulatory Flexibility Act...................... 47
VIII. Document Availability.......................... 50
IX. Effective Date and Congressional Notification.... 53
1. In this Final Rule, the Federal Energy Regulatory Commission
(Commission) amends its regulations at 18 CFR 284.12 to incorporate by
reference, with certain enumerated exceptions,\1\ the latest version
(Version 3.2) of business practice standards adopted by NAESB's WGQ
applicable to natural gas pipelines that NAESB reported to the
Commission on August 17, 2020 in place of the currently incorporated
version (Version 3.1) of those business practice standards. This Final
Rule requires interstate natural gas pipelines to file compliance
filings with the Commission by November 12, 2021 and to comply with the
standards incorporated by reference in this rule on and after June 1,
2022.
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\1\ As explained below, we are not incorporating by reference in
this Final Rule the optional model contracts and the eTariff-related
standards included in the North American Energy Standards Board
(NAESB) Wholesale Gas Quadrant (WGQ) Version 3.2 package of business
practice standards.
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2. The implementation of these standards and regulations will
promote the additional efficiency and reliability of the natural gas
industries' operations thereby helping the Commission to carry out its
responsibilities under the Natural Gas Act (NGA). Further, the
implementation of these standards will enhance the natural gas
industries' computer security requirements.\2\ In addition, the
implementation of these data requirements will provide additional
transparency to Informational Postings websites and will improve
communication standards.
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\2\ As explained below, NAESB has developed and adopted, in
conjunction with Sandia National Laboratories, a series of business
practice standards to protect the natural gas industries' internet
security.
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3. The NAESB WGQ Version 3.2 package of standards contains
revisions to the NAESB WGQ Version 3.1 package of standards. As
explained further below, in response to the recommendations in the
Sandia National Laboratory (Sandia) \3\ report, NAESB updated the
Quadrant Electronic Delivery Mechanism (EDM) Related Standards and
internet Electronic Transport (IET) Related Standards to specifically:
(1) Require the implementation of fixes or patches for known
vulnerabilities as soon as reasonably practicable in coordination with
other trading partners; (2) specify notification timelines to provide
notice to trading partners of any systems or software that have not
been updated and the potential impact of using the vulnerable system;
(3) include both specific and broad adoptions of system security
measures and specific notification and coordination during outages with
affected trading partners; (4) maintain a minimum encryption strength
of 128 bits, (5) specify that OpenPGP \4\ should be used to create
public and private keys for privacy and digital signature applications;
(6) specify Hyper-Text Transport Protocol Secure (HTTPS) \5\ whenever
secure communication is required to protect information in transit and
support overall privacy needs; (7) use the largest feasible key length
consistent with implementation of current business processes; (8) state
that secure websites should employ individual user credentials; and (9)
encourage security assessments and coordination between customers,
vendors, and trading partners.
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\3\ Sandia is a multidisciplinary national laboratory and
federally funded research and development center for the U.S.
Department of Energy's (DOE) National Nuclear Security
Administration that supports numerous federal, state, and local
government agencies, companies, and organizations.
\4\ OpenPGP is an encryption standard defined by the internet
Engineering Task Force enabling design and implementation free of
licensing fees. At present, the encryption method is generally
considered the most secure.
\5\ HTTPS authentication encrypts username and password
combinations as part of a Uniform Resource Locator address. To
obtain an HTTPS connection, a web browser must contact a trusted,
commercial Certificate Authority, such as a NAESB Authorized
Certificate Authority, to obtain the web server's public key, and
follow other applicable HTTPS procedures.
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4. Further, in response to industry requests or through the normal
course of WGQ activities, NAESB: (1) Updated the Nominations Related
Standards to allow a Service Requester to determine which rights of the
contract its segmentation nomination is using; (2) updated the Quadrant
EDM Related Standards to (i) define a NAESB standard time frame for
information to be retained on a pipeline's Informational Postings
website, (ii) allow for processing functions at the line item level on
Customer Activities websites and allow for the use of icons and/or
graphical control elements for navigation and/or processing functions,
and (iii) make minor revisions designed to add clarity, update the
minimum technical characteristics to account for changes in technology
since the previous version (Version 3.1) of the WGQ standards, and
update the minimum and suggested operating systems and web browsers
that entities should support; (3) updated multiple sets of standards to
remove references to the term ``gigacalories'' and add the term
``gigajoules'' as the standard quantity for nominations, confirmations,
and scheduling in Mexico; and (4) revised the NAESB WGQ data sets or
other technical implementation documentation while not resulting in
modifications to the underlying business practice standards.
I. Background
5. Since 1996, the Commission has adopted regulations to
standardize the business practices and communication methodologies of
interstate natural gas pipelines to create a more integrated and
efficient pipeline system. These regulations have been promulgated in
[[Page 43592]]
the Order No. 587 series of orders,\6\ wherein the Commission has
incorporated by reference standards for interstate natural gas pipeline
business practices and electronic communications that were developed
and adopted by NAESB's WGQ. Upon incorporation by reference, this
version of the standards will replace the currently incorporated
version (Version 3.1) of those business practice standards.
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\6\ This series of orders began with the Commission's issuance
of Standards for Bus. Pracs. of Interstate Nat. Gas Pipelines., Ord.
No. 587, 61 FR 39053 (July 26, 1996), FERC Stats. & Regs. ] 31,038
(1996) (cross-referenced at 76 FERC ] 61,042).
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6. On August 17, 2020, NAESB filed a report informing the
Commission that it had adopted and ratified WGQ Version 3.2 of its
business practice standards applicable to interstate natural gas
pipelines. Version 3.2 of the WGQ includes business practice standards
developed and modified in response to industry requests and directives
from the NAESB Board of Directors. This version also includes the
standards developed in response to the recommendations of Sandia, which
in 2019 issued a cybersecurity surety assessment of the NAESB standards
sponsored by DOE (Sandia Surety Assessment),\7\ and the standards
developed to enable the use of distributed ledger technologies when
transacting the NAESB Base Contract for Sale and Purchase of Natural
Gas.
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\7\ In April 2017, NAESB announced that Sandia, through funding
provided by DOE, would be performing a surety assessment of the
NAESB standards. As determined by Sandia and DOE, the purpose of the
surety assessment was to analyze cybersecurity elements within the
standards, focusing on four areas: (1) The NAESB Certification
Program for Accredited Certification Authorities, including the
Wholesale Electric Quadrant (WEQ)-012 Public Key Infrastructure
Business Practice Standards, the NAESB Accreditation Requirements
for Authorized Certificate Authorities, and the Authorized
Certification Authority Process; (2) the WEQ Open Access Same-Time
Information Systems suite of standards; (3) the WGQ and Retail
Markets Quadrant IET and Quadrant EDM Related Standards Manual; and
(4) a high-level dependency analysis between the gas and electric
markets to evaluate the different security paradigms the markets
employ.
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7. The NAESB report identifies all the changes made to the WGQ
Version 3.1 Standards and summarizes the deliberations that led to the
changes being made. It also identifies changes to the existing
standards that were considered but not adopted due to a lack of
consensus or other reasons.
8. On February 18, 2021, the Commission issued a Notice of Proposed
Rulemaking proposing to amend its regulations to incorporate by
reference, with certain enumerated exceptions, the NAESB WGQ Version
3.2 business practice standards (referenced above) applicable to
natural gas pipelines.\8\
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\8\ Standards for Bus. Pracs. of Interstate Nat. Gas Pipelines,
Notice of Proposed Rulemaking, 86 FR 12879 (Mar. 5, 2021), 174 FERC
] 61,103 (2021) (Version 3.2 NOPR).
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9. In response to the Version 3.2 NOPR, NAESB and the Interstate
Natural Gas Association of America (INGAA) filed comments. NAESB
clarifies that Standards 4.3.60 and 10.3.16 do not require multi-factor
(e.g., two-factor) authentication on an individual basis. NAESB
clarifies that Standard 4.3.60 states that a Customer Activities
website should be protected by [Hyper-Text Transport Protocol] (HTTP)
\9\ Basic Authentication using transport layer security and require a
single logon/password pair for each user session. NAESB further
clarifies that Standard 10.3.16 states that trading partners should
implement HTTP Basic Authentication using transport layer security.\10\
INGAA supports NAESB's clarifying comments.\11\
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\9\ HTTP is the original communications protocol of the internet
which enables a web browser to depict text, pictures, shapes, live
data, and click targets on a web browser. However, username and
password combinations are not encrypted in HTTP Basic
Authentication.
\10\ NAESB Cmts. at 1.
\11\ INGAA Cmts. at 3.
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10. INGAA expresses support for the Commission's proposal to
incorporate by reference NAESB's WGQ Version 3.2 business practice
standards. INGAA also supports the Commission's proposal in the Version
3.2 NOPR, but urges the Commission to ensure that implementation of a
Final Rule in this proceeding occurs for the first gas day of the
month, but not prior to April 1, 2022, after the winter heating season.
INGAA states that implementation of a Final Rule in this proceeding
will require substantial time and effort from both pipelines and their
customers to alter business systems, scheduling, and coordination
processes and, thus, it would be best to schedule implementation to not
occur during the winter heating season.\12\
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\12\ Id. at 2.
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11. Further, INGAA states that requiring implementation to occur
for the first gas day of the month is important for both pipelines and
shippers. INGAA explains that while pipelines update their software to
accommodate the new NAESB version ahead of the implementation date,
both pipelines and shippers need to ensure that contract, nomination,
allocation, invoice, and other changes will be fully in place and
working properly with the start of the gas month. INGAA states that
this is consistent with the industry's monthly billing cycle and shall
avoid the complications of a mid-month transition.\13\
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\13\ Id.
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II. Discussion
A. The NAESB WGQ Version 3.2 Business Practice Standards
1. Modifications to Previous Version of Standards
a. Modifications in Response to the Sandia Surety Assessment
12. NAESB revised previously incorporated standards and developed
new standards in response to the recommendations in the Sandia Surety
Assessment. Specifically, NAESB adopted revisions to the WGQ EDM
Related Business Practice Standards, which establish the framework for
the electronic dissemination and communication of information between
parties in the North American wholesale gas marketplace, and to the WGQ
IET Related Business Practice Standards, which define the
implementation of various technologies necessary to communicate
transactions and other electronic data using standard protocols for
electronic commerce over the internet between trading partners. First,
NAESB adopted two new standards, 4.3.109 and 10.3.28, to provide that
trading partners should evaluate software fixes or patches for known
vulnerabilities within 30 days and implement the fix or patch as soon
as reasonably practicable based on the severity of the risk. Second,
NAESB adopted two new standards, 4.3.110 and 10.3.29, to provide that
trading partners should mutually agree to the version of the EDM and
IET to be used. Third, the new standards specify notification and
coordination timelines with trading partners, where applicable, to
address vulnerable systems or software as soon as possible. Fourth, the
Sandia Surety Assessment recommended that NAESB consider guidelines for
configuration and logging, network traffic monitoring, alerting
systems, and manual continuity of operations in the event of abnormal
behavior or failure conditions within the system. In response, NAESB
added language to new Standards 4.3.110 and 10.3.28 to include both
specific and broad adoptions of such system security measures.
13. Further, NAESB added language to existing Standards 4.3.60,
4.3.61, 10.2.33, and 10.3.25 to clarify the Transport Layer Security
protocol,\14\
[[Page 43593]]
which encrypts data to hide information from electronic observers on
the internet. NAESB also deleted all references to the Secure Sockets
Layer protocol in the standards.
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\14\ The National Institute of Standards and Technology Special
Pub. 800-52 requires government Transport Layer Security servers and
clients to support Transport Layer Security Version 1.2 and
recommends support for Transport Layer Security Version 1.3 by the
year 2024.
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14. Concerning identification key lengths, the Sandia Surety
Assessment recommended that Rivest-Shamir-Adelman keys \15\ must be no
shorter than 2048 bits, Elliptic Curve Digital Signature Algorithm keys
\16\ must be no shorter than 224 bits, Hash \17\ algorithms should be
from the Secure Hash Algorithm (SHA)-2 \18\ or SHA-3 families, and
acceptable Advanced Encryption Standard key lengths range from 128, to
192, to 256. The Sandia Surety Assessment recommended that, in general,
implementors use the largest feasible key length consistent with
implementation of current business processes. In response, NAESB
deleted Standard 4.3.83 to remove legacy support references and
maintain a minimum encryption strength of 128 bits. Further, NAESB
revised existing Standards 10.2.34 and 10.3.15 to delete a proprietary
Pretty Good Privacy (PGP) \19\-related hyperlink and to accommodate
license-free OpenPGP, respectively. NAESB also adopted a new Standard
10.2.39 to specify that OpenPGP should be used to create public and
private keys for privacy and digital signature applications.
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\15\ Rivest-Shamir-Adelman is a public key infrastructure
algorithm composed of a public component and a private component
that is typically installed on a recognized Certificate Authority.
\16\ Elliptic Curve Digital Signature Algorithm public keys
generate an encrypted signature to validate data.
\17\ A Hash is a cryptology technique used for digital
signatures in which a series of numbers that may represent, for
example, a password, an image, a document, or an executable file is
used to generate a cryptographic hash (i.e., a large number).
\18\ SHA-2 is a set of cryptographic hash functions.
\19\ PGP is a proprietary (i.e., an organization must pay to use
it) encryption program developed to enhance the confidentiality and
integrity of data.
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15. Further, NAESB revised existing Standards 4.3.60, 4.3.84,
10.3.4, and 10.3.16 to specify HTTPS, which is an encrypted version of
HTTP, whenever a secure communication is required to protect
information in transit and support overall privacy needs.
b. Modifications in Response to Industry Requests
16. The following section describes standards development efforts
undertaken by NAESB in response to industry requests or through the
normal course of WGQ activities that resulted in modifications to the
Nomination Related Standards, Quadrant EDM Related Standards, and an
effort that impacted multiple sets of standards. NAESB made
corresponding revisions, where appropriate, to the related data sets
and technical implementation as part of the standards development
effort.
i. Nomination Related Standards
17. NAESB revised existing Standards 1.3.27, 1.4.1, and 1.4.2 to
add a new data element ``Capacity Block ID'' to allow a Service
Requester to determine which primary point rights of the contract their
segmented nomination \20\ is using and eliminate an existing manual
business process from the TSP to automate the business process.
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\20\ In order for a Service Requester to have control over its
segmented nomination(s), the Transportation Service Provider (TSP)
will require a ``Capacity Block ID'' to be submitted with each
nomination line item specifying a Transaction Type of ``Segmented.''
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ii. Quadrant Electronic Delivery Mechanism Related Standards
18. NAESB developed two new standards, Standard 4.3.107 to
establish a standard data retention period for retrieval of
Operationally Available data from the Informational Postings website,
and Standard 4.3.108, to establish a standard data retention period for
retrieval of Notices for the subcategories of Critical, Non-Critical,
and Planned Service Outage from the Informational Postings website.
iii. Revisions Impacting Multiple Standards
19. NAESB revised multiple standards \21\ and data sets \22\ to
remove references to the term ``gigacalories'' and add the term
``gigajoules,'' as the standard quantity for nominations,
confirmations, and scheduling in Mexico.
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\21\ NAESB WGQ Version 3.2 Standards 1.3.14, 1.3.15, 1.3.82, and
3.3.3.
\22\ NAESB WGQ Version 3.2 Standards 0.4.1 through 0.4.3, 1.4.1,
1.4.3 through 1.4.6, 2.4.1, 2.4.6, 2.4.17, 3.4.1, 3.4.2, and 5.4.24
through 5.4.26.
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iv. Other Material in NAESB's Report
20. NAESB revised multiple data sets which impacted technical
implementation documentation only.
21. Further, NAESB revised its optional model contracts and
corresponding Mexican and Canadian Addendums to reflect a standard
digital representation of natural gas trade events. NAESB states that
these revisions are intended to capitalize on smart contracts and
distributed ledger technologies.
B. NAESB's Process
22. NAESB used its consensus procedures to develop and approve the
WGQ Version 3.2 Standards. As the Commission found in Order No. 587,
the adoption of consensus standards is appropriate, because the
consensus process helps ensure the reasonableness of the standards by
requiring that the standards draw support from a broad spectrum of
industry participants representing all segments of the industry.
Moreover, since the industry itself must conduct business under these
standards, the Commission's regulations should reflect those standards
that have the widest possible support. In section 12(d) of the National
Technology Transfer and Advancement Act of 1995 (NTT&AA),\23\ Congress
affirmatively requires federal agencies to use technical standards
developed by voluntary consensus standards organizations, like NAESB,
as means to carry out policy objectives or activities determined by the
agencies unless an agency determines that the use of such standards
would be inconsistent with applicable law or otherwise impractical.
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\23\ Public Law 104-113, 12(d), 110 Stat. 775 (1996).
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C. Adoption of Version 3.2 of the Standards
23. In the Version 3.2 NOPR, the Commission proposed to incorporate
by reference, in its regulations, Version 3.2 of the NAESB WGQ
consensus business practice standards, with the exception of NAESB's
standards specifying the terms of optional model contracts and the
eTariff-related standards.\24\ None of the commenters opposed the
Commission's proposal to incorporate by reference the NAESB WGQ Version
3.2 business practice standards as proposed in the Version 3.2
NOPR.\25\
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\24\ Version 3.2 NOPR, 174 FERC ] 61,103 at n.1 & P 19.
\25\ NAESB's clarifying comments regarding revised existing
Standards 4.3.60 and 10.3.16 are discussed separately in section II
above.
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24. After a review of the comments filed in response to the Version
3.2 NOPR, and because the revisions made by NAESB in this version of
the standards are designed to enhance the natural gas industries'
system and software security measures and to clarify the processing of
certain business transactions, we amend Part 284 of the Commission's
regulations to incorporate by reference the NAESB WGQ Version 3.2
business practice standards, with the exceptions (as explained in the
Version 3.2 NOPR) of the optional model contracts and the eTariff-
related standards.
[[Page 43594]]
D. Required Compliance Filings
25. As suggested by INGAA, we have selected an implementation
schedule for compliance with this Final Rule that delays implementation
until after the 2021-2022 winter heating period. To implement the
standards that we are incorporating by reference in this Final Rule, we
will require each interstate natural gas pipeline to file a separate
tariff record reflecting the changed standards by November 12, 2021, to
take effect on June 1, 2022 \26\ We are adopting this implementation
schedule to give the interstate natural gas pipelines subject to these
standards adequate time to implement these changes.
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\26\ To aid in compliance, promptly after issuance of this Final
Rule, we will post a sample tariff record on the Commission's
website that may be accessed at https://www.ferc.gov/ferc-online/elibrary. All interstate natural gas pipelines are to file their
tariff records in conformance with this sample tariff record.
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E. Implementation Schedule
26. To implement these standards, we require interstate natural gas
pipelines to file tariff records to reflect the changed standards by
November 12, 2021. None of the comments took issue with the
Commission's explanation of its policies on tariff filings and on
waiver requests to comply with these standards.\27\ Therefore, we are
not modifying these policies in this Final Rule and affirm the
explanation of those policies the Commission made in the Version 3.2
NOPR.
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\27\ Version 3.2 NOPR, 174 FERC ] 61,103 at PP 20-24.
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27. In addition, consistent with the requirements in Order No. 587-
W,\28\ we are including the following filing requirements for the
November 12, 2021 compliance filing 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.
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\28\ Standards for Bus. Pracs. of Interstate Nat. Gas Pipelines,
Ord. No. 587-W, 80 FR 67302 (Nov. 2, 2015), 153 FERC ] 61,061, at P
42 (2015) (Ord. No. 587-W).
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(1) The pipelines must designate a single tariff record under which
every NAESB standard currently incorporated by reference by the
Commission is listed.\29\ This section should be a separate tariff
record under the Commission's electronic tariff filing requirement and
should be filed electronically using the eTariff portal using the Type
of Filing Code 580. We will post on the Commission's eLibrary website
(under Docket No. RM96-1-042) a sample tariff record, to provide filers
an illustrative example to aid them in preparing their compliance
filings; \30\
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\29\ See supra n.21.
\30\ Id.
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(2) For each standard, each pipeline must specify in the tariff
record a list of all the NAESB standards currently incorporated by
reference by the Commission:
(a) whether the standard is incorporated by reference;
(b) for those standards not incorporated by reference, the tariff
provision that complies with the standard; \31\ and
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\31\ 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-vi) and 5.3.2, respectively) in their
tariffs. See, e.g., Standards for Bus. Pracs. of Interstate Nat. Gas
Pipelines, Ord. No. 587-U, 75 FR 16337 (Apr. 1, 2010), 130 FERC ]
61,212, at P 39 & n.42 (2010). Each pipeline's submittal is to
identify which tariff provision complies with each of these
standards.
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(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.\32\
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\32\ Shippers can use the Commission's electronic tariff system
to locate the tariff record containing the NAESB WGQ standards,
which will indicate the docket number in which any waiver or
extension of time was granted.
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(3) If the pipeline is requesting a continuation of a previously
granted waiver or extension of time to comply with certain NAESB WGQ
standards, 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 of time was granted.
III. Notice of Use of Voluntary Consensus Standards
28. Office of Management and Budget (OMB) Circular A-119 (section
11) (Feb. 10, 1998) provides that when a federal agency issues or
revises a regulation containing a standard, the agency should publish a
statement in the Final Rule stating whether the adopted standard is a
voluntary consensus standard or a government-unique standard. In this
Final Rule, we are incorporating by reference voluntary consensus
standards developed by NAESB's 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.\33\
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\33\ Public Law 104-113, 12(d), 110 Stat. 775 (1996), 15 U.S.C.
272 note (1997).
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IV. Incorporation by Reference
29. The Office of the Federal Register requires agencies
incorporating material by reference in final rules to discuss the ways
that the materials it incorporates by reference are reasonably
available to interested parties and how interested parties can obtain
the materials.\34\ The regulations also require agencies to summarize,
in the preamble of the final rule, the material it incorporates by
reference. The standards that we are incorporating by reference in this
Final Rule consist of seven suites of NAESB WGQ Business Practice
Standards that address a variety of topics and are designed to
streamline the transactional processes for the wholesale natural gas
industry by promoting a more competitive and efficient market. These
include the: Additional Business Practice Standards; Nominations
Related Business Practice Standards; Flowing Gas Related Business
Practice Standards; Invoicing Related Business Practice Standards;
Quadrant Electronic Delivery Mechanism Related Business Practice
Standards; Capacity Release Related Business Practice Standards; and
internet Electronic Transport Related Business Practice Standards. We
summarize these standards below.
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\34\ 1 CFR 51.5 (2020). See Incorporation by Reference, 79 FR
66267 (Nov. 7, 2014).
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30. The Additional Business Practice Standards address six areas:
Creditworthiness; Storage Information; Gas/Electric Operational
Communications; Operational Capacity; Unsubscribed Capacity; and
Location Data Download.
The Creditworthiness related standards describe
requirements for the exchange of information, notification, and
communication between parties during the creditworthiness evaluation
process.
The Storage Information related standards define the
information to be provided to natural gas service requesters related to
storage activities and/or balances.
The Gas/Electric Operational Communications related
standards define communication protocols intended to improve
coordination between the gas and electric industries in daily
operational communications between transportation service providers and
gas-fired power plants. The standards include requirements for
communicating anticipated power generation fuel for the upcoming day as
[[Page 43595]]
well as any operating problems that might hinder gas-fired power plants
from receiving contractual gas quantities.
The Operational Capacity related standards define
requirements of the transportation service provider related to the
reporting and requesting of a transportation service provider's
operational capacity, total scheduled quantity, and operationally
available capacity.
The Unsubscribed Capacity related standards define
requirements of the transportation service provider related to the
reporting and requesting of a transportation service provider's
available unsubscribed capacity.
The Location Data Download related standards define
requirements for the use of codes assigned by the transportation
service provider for locations and common codes for parties
communicating electronically.
31. The Nominations Related Business Practice Standards define the
process by which a natural gas service requester with a natural gas
transportation contract nominates (or requests) service from a pipeline
or a transportation service provider for the delivery of natural gas.
32. The Flowing Gas Related Business Practice Standards define the
business processes related to the communication of entitlement rights
of flowing gas at a location, of the entitlement rights on a
contractual basis, of the management of imbalances, and of the
measurement and gas quality information of the actual flow of gas.
33. The Invoicing Related Business Practice Standards define the
process for the communication of charges for services rendered
(Invoice), communication of details about funds rendered in payment for
services rendered (Payment Remittance), and communication of the
financial status of a customer's account (Statement of Account).
34. The Quadrant Electronic Delivery Mechanism Related Business
Practice Standards define the framework for the electronic
dissemination and communication of information between parties in the
North American wholesale gas marketplace for Electronic Data
Interchange/EDM transfers, batch flat file/EDM transfers, informational
postings websites, Electronic Bulletin Boards/EDM, and interactive flat
file/EDM.
35. The Capacity Release Related Business Practice Standards define
the business processes for communication of information related to the
selling of all or any portion of a transmission service requester's
contract rights.
36. The internet Electronic Transport Related Business Practice
Standards define the implementation of various technologies necessary
to communicate transactions and other electronic data using standard
protocols for electronic commerce over the internet between trading
partners.
37. The Commission's regulations provide that copies of the
standards incorporated by reference may be obtained from NAESB at
https://www.naesb.org// or (713) 356-0060. Once the Novel Coronavirus
Disease (COVID-19) restrictions are lifted, copies of the standards may
be inspected at the Federal Energy Regulatory Commission, Public
Reference Room, 888 First Street NE, Washington, DC 20426, Phone: (202)
502-8371, https://www.ferc.gov/. At this time, the Commission has
suspended access to the Commission's Public Reference Room due to the
President's March 13, 2020 proclamation declaring a National Emergency
concerning COVID-19.
38. NAESB is a private consensus standards developer that develops
voluntary wholesale and retail standards related to the energy
industry. The procedures used by NAESB make its standards reasonably
available to those affected by Commission regulations, which generally
is comprised of entities that have the means to acquire the information
they need to effectively participate in Commission proceedings.
Participants can join NAESB, for an annual membership cost of $8,000,
which entitles them to full participation in NAESB and enables them to
obtain these standards at no additional cost. Non-members may obtain
the Individual Standards Manual or Booklets for each of the seven
Manuals by email for $250 per manual, which in the case of these
standards would total $1,750. Non-members also may obtain the complete
set of Standards Manuals, Booklets, and Contracts on USB flash drive
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. In
addition, NAESB considers requests for waivers of the charges on a
case-by-case basis depending on need.
V. Information Collection Statement
39. OMB regulations require that OMB approve certain reporting,
record keeping, and public disclosure requirements (information
collection) imposed by an agency.\35\ Therefore, we are submitting this
proposed information collection to OMB for review in accordance with
section 3507(d) of the Paperwork Reduction Act of 1995. Upon approval
of a collection of information, OMB will assign an OMB control number
and an expiration date. Respondents subject to the filing requirements
of a rule will not be penalized for failing to respond to these
collections of information unless the collection of information
displays a valid OMB control number.
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\35\ 5 CFR 1320.11 (2020).
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40. The Commission solicited comments on the need for this
information, whether the information will have practical utility, the
accuracy of the provided burden estimates, ways 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. No comments were filed raising any
objections to the burden estimate presented in the Version 3.2 NOPR.
Accordingly, we will use that same burden estimate in this Final Rule.
41. Public Reporting Burden: 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 information technology work).
42. The collections of information related to this Final Rule fall
under FERC-545 (Gas Pipeline Rates: Rate Change (Non-Formal)) \36\ and
FERC-549C (Standards for Business Practices of Interstate Natural Gas
Pipelines).\37\ The following estimates of reporting burden are related
only to this Final Rule and include the costs to pipelines for
compliance with the Commission's directives in this Final Rule. The
burden estimates are primarily related to implementing these standards
and regulations and will not result in ongoing costs.
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\36\ FERC-545 covers rate change filings made by natural gas
pipelines, including tariff changes.
\37\ FERC-549C covers Standards for Business Practices of
Interstate Natural Gas Pipelines.
[[Page 43596]]
RM96-1-042 Final Rule (Standards for Business Practices of Interstate Natural Gas Pipelines)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Annual number
respondents of responses Total number Average burden hr. per Total annual burden hours Annual costs
\38\ per respondent of responses response & total annual cost \39\ per respondent
(1) (2) (1)*(2) = (3) (4)...................... (3)*(4) = (5)............ (5)/(1) = (6)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FERC-545 (one-time)............... 178 1 178 10 hrs.; $1,010.......... 1,780 hrs.; $179,780..... $1,010
FERC-549C (one-time).............. 178 1 178 100 hrs.; $10,100........ 17,800 hrs.; $1,797,800.. $10,100
---------------------------------------------------------------------------------------------------------------------
Total............................. .............. .............. 356 ......................... 19,580 hrs.; $1,977,580.. ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
The one-time burden (for both the FERC-545 and FERC-549C) will take
place in Year 1 and will be averaged over three years:
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\38 \ The number of respondents is the number of entities in
which a change in burden from the current standards to the proposed
exists, not the total number of entities from the current or
proposed standards that are applicable.
\39\ The estimated hourly cost (salary plus benefits) provided
in this section is based on the salary figures for May 2019 posted
by the Bureau of Labor Statistics for the Utilities sector
(available at https://www.bls.gov/oes/current/naics3_221000.htm) and
scaled to reflect benefits using the relative importance of employer
costs for employee compensation from June 2020 (available at https://www.bls.gov/news.release/ecec.nr0.htm). The hourly estimates for
salary plus benefits are:
Computer and Information Systems Manager (Occupation Code: 11-
3021), $101.58
Computer and Information Analysts (Occupation Code: 15-1210),
$87.42
Electrical Engineer (Occupation Code: 17-2071), $70.19
Legal (Occupation Code: 23-0000), $142.65
The average hourly cost (salary plus benefits), weighting all of
these skill sets evenly, is $100.50. We round it to $101/hour.
FERC-545: 1,780 hours / 3 = 593 hours/year over three years
FERC-549C: 17,800 hours / 3 = 5,933 hours/year over three years
The number of responses is also averaged over three years (for both
the FERC-545 and FERC-549C):
FERC-545: 178 responses / 3 = 59 responses/year
FERC-549C: 178 responses / 3 = 59 responses/year
The responses and burden for Years 1-3 will total respectively as
follows:
Year 1: 59 responses; 593 hours (FERC-545); 5,933 hours (FERC-549C)
Year 2: 59 responses; 593 hours (FERC-545); 5,933 hours (FERC-549C)
Year 3: 59 responses; 593 hours (FERC-545); 5,933 hours (FERC-549C)
Title: FERC-545, Gas Pipeline Rates: Rates Change (Non-Formal);
FERC-549C, Standards for Business Practices of Interstate Natural Gas
Pipelines.
Action: Proposed information collections.
OMB Control Nos.: 1902-0154 (FERC-545), 1902-0174 (FERC-549C).
Respondents: Business or other for profit (e.g., Natural Gas
Pipelines, applicable to only a few small businesses).
Frequency of Responses: One-time implementation (related to
business procedures, capital/start-up).
Necessity of Information: In response to the recommendations in the
Sandia report, the revisions in this Final Rule to the Commission's
regulations will upgrade current business practices and communication
standards by updating the Quadrant EDM Related Standards and IET
Related Standards to specifically: (1) Require the implementation of
fixes or patches for known vulnerabilities as soon as reasonably
practicable in coordination with other trading partners; (2) specify
notification timelines to provide notice to trading partners of any
systems or software that have not been updated and the potential impact
of using the vulnerable system; (3) include both specific and broad
adoptions of system security measures and specific notification and
coordination during outages with affected trading partners; (4)
maintain a minimum encryption strength of 128 bits; (5) specify that
OpenPGP should be used to create public and private keys for privacy
and digital signature applications; (6) specify HTTPS whenever secure
communication is required to protect information in transit and support
overall privacy needs; (7) use the largest feasible key length
consistent with implementation of current business processes; (8) state
that secure websites should employ individual user credentials; and (9)
encourage security assessments and coordination between customers,
vendors, and trading partners.
43. Further, in response to industry requests or through the normal
course of WGQ activities, the revisions in this Final Rule to the
Commission's regulations will upgrade current business practices and
communication standards by specifically: (1) Updating the Nominations
Related Standards to allow a Service Requester to determine which
rights of the contract its segmentation nomination is using; (2)
updating the Quadrant EDM Related Standards to (i) define a NAESB
standard time frame for information to be retained on a pipeline's
Informational Postings website, (ii) allow for processing functions at
the line item level on Customer Activities websites and allow for the
use of icons and/or graphical control elements for navigation and/or
processing functions, and (iii) make minor revisions designed to add
clarity, update the minimum technical characteristics to account for
changes in technology since the previous version (Version 3.1) of the
WGQ standards, and update the minimum and suggested operating systems
and web browsers that entities should support; (3) updating multiple
sets of standards to remove references to the term ``gigacalories'' and
add the term ``gigajoules'' as the standard quantity for nominations,
confirmations, and scheduling in Mexico; and (4) revising the NAESB WGQ
data sets or other technical implementation documentation while not
resulting in modifications to the underlying business practice
standards. The package of standards also includes minor corrections.
The implementation of these data requirements will provide additional
transparency to Informational Postings websites and will improve
communication standards. The implementation of these standards and
regulations will promote the additional efficiency and reliability of
the natural gas industries' operations thereby helping the Commission
to carry out its responsibilities under the NGA. In addition, the
Commission's Office of
[[Page 43597]]
Enforcement will use the data for general industry oversight.
Internal Review: We have reviewed the requirements pertaining to
business practices of interstate natural gas pipelines and have
determined that the revisions are necessary to establish a more
efficient and integrated pipeline grid. These requirements conform to
the Commission's plan for efficient information collection,
communication, and management within the natural gas pipeline
industries. We determined, through our internal review, that there is
specific, objective support for the burden estimates associated with
the information requirements.
44. 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 protected], telephone: (202) 502-8663, fax: (202) 273-0873.
45. Comments concerning the collection of information(s) and the
associated burden estimate(s), should be sent to the contact listed
above 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: (202) 395-
0710; fax: (202) 395-4718.
VI. Environmental Analysis
46. 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.\40\ The
actions that we take here fall within categorical exclusions in the
Commission's regulations for rules that are clarifying, corrective, or
procedural, for information gathering, analysis, and dissemination, and
for rules regarding sales, exchange, and transportation of natural gas
that require no construction of facilities.\41\ Therefore, an
environmental review is unnecessary and has not been prepared as part
of this Final Rule.
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\40\ Reguls. Implementing the Nat'l Envt'l Pol'y Act, Ord. No.
486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. Preambles
1986-1990 ] 30,783 (1987) (cross-referenced at 41 FERC ] 61,284).
\41\ See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), and 380.4(a)(27)
(2020).
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VII. Regulatory Flexibility Act
47. The Regulatory Flexibility Act of 1980 (RFA) \42\ generally
requires a description and analysis of final rules that will have
significant economic impact on a substantial number of small entities.
The Commission is not required to make such analysis if proposed
regulations would not have such an effect.
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\42\ 5 U.S.C. 601-612.
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48. As we stated in the WGQ Version 3.2 NOPR, approximately 178
interstate natural gas pipelines, both large and small, are potential
respondents subject to the requirements adopted by this rule. Most of
the natural gas pipelines regulated by the Commission do not fall
within the RFA's definition of a small entity,\43\ which is currently
defined for natural gas pipelines as a company that, in combination
with its affiliates, has total annual receipts of $30 million or
less.\44\ For the year 2019, only 11 companies not affiliated with
larger companies had annual revenues in combination with its affiliates
of $30 million or less and therefore could be considered a small entity
under the RFA. This represents about six percent of the total universe
of potential respondents that may have a significant burden imposed on
them. We estimate that the one-time implementation cost of the
proposals in this Final Rule is $1,977,580 (or $11,110 per entity,
regardless of entity size).\45\ We do not consider the estimated
$11,110 impact per entity to be significant. Moreover, these
requirements are designed to benefit all customers, including small
businesses that must comply with them. Further, as noted above,
adoption of consensus standards helps ensure the reasonableness of the
standards by requiring that the standards draw support from a broad
spectrum of industry participants representing all segments of the
industry. Because of that representation and the fact that industry
conducts business under these standards, the Commission's regulations
should reflect those standards that have the widest possible support.
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\43\ See 5 U.S.C. 601(3) citing section 3 of the Small Business
Act (SBA), 15 U.S.C. 623. Section 3 of the SBA defines a ``small
business concern'' as a business which is independently owned and
operated, and which is not dominant in its field of operation
(2019).
\44\ 13 CFR 121.201 (Subsector 486--Pipeline Transportation;
North American Industry Classification System code 486210; Pipeline
Transportation of Natural Gas) (2020). ``Annual Receipts'' are total
income plus cost of goods sold.
\45\ This number is derived by dividing the total cost figure by
the number of respondents. $1,977,580/178 = $11,110.
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49. Accordingly, pursuant to section 605(b) of the RFA,\46\ the
regulations being promulgated herein should not have a significant
economic impact on a substantial number of small entities.
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\46\ 5 U.S.C. 605(b).
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VIII. Document Availability
50. In addition to publishing the full text of this document in the
Federal Register, we provide all interested persons an opportunity to
view and/or print the contents of this document via the internet
through the Commission's Home Page (https://www.ferc.gov/). At this
time, we have suspended access to the Commission's Public Reference
Room due to the President's March 13, 2020 proclamation declaring a
National Emergency concerning COVID-19.
51. 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.
52. User assistance is available for eLibrary and the Commission's
website during normal business hours from the Commission's Online
Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at
[email protected].
IX. Effective Date and Congressional Notification
53. These regulations are effective October 12, 2021. We have
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. This Final Rule is being
submitted to the Senate, House, and Government Accountability Office.
List of Subjects in 18 CFR Part 284
Incorporation by reference, Natural gas, Reporting and
recordkeeping requirements.
By direction of the Commission.
Issued: July 15, 2021.
Debbie-Anne A. Reese,
Deputy Secretary.
In consideration of the foregoing, we amend 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:
[[Page 43598]]
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) and (2) 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.
(i) Additional Standards (Version 3.2, August 15, 2020);
(ii) Nominations Related Standards (Version 3.2, August 15, 2020);
(iii) Flowing Gas Related Standards (Version 3.2, August 15, 2020);
(iv) Invoicing Related Standards (Version 3.2, August 15, 2020);
(v) Quadrant Electronic Delivery Mechanism Related Standards
(Version 3.2, August 15, 2020);
(vi) Capacity Release Related Standards (Version 3.2, August 15,
2020); and
(vii) internet Electronic Transport Related Standards (Version 3.2,
August 15, 2020).
(2) This incorporation by reference was approved by the Director of
the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part
51. Copies of these standards may be obtained from the North American
Energy Standards Board, 801 Travis Street, Suite 1675, Houston, TX
77002, Phone: (713) 356-0060. NAESB's website is at https://www.naesb.org/. Copies may be inspected at the Federal Energy
Regulatory Commission, Public Reference Room, 888 First Street NE,
Washington, DC 20426, Phone: (202) 502-8371, https://www.ferc.gov/, or
at the National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, email
[email protected], or go to: www.archives.gov/federal-register/cfr/ibr-locations.html.
* * * * *
[FR Doc. 2021-16915 Filed 8-9-21; 8:45 am]
BILLING CODE 6717-01-P
