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NAESB Revised Standards for Pipelines Clear Regulatory Hurdle

FERC last Thursday approved several revised standards for business practices of interstate natural gas pipelines, which Commissioner Phillip Moeller acknowledged that while "maybe not glamorous are still essential to a safe and efficient pipeline operation."

The revised standards, which were developed by the North American Energy Standards Board (NAESB) and approved by the Federal Energy Regulatory Commission (FERC) in a final rule, would allow the use of price indexes to price capacity-release transactions and to "afford greater flexibility [at] receipt and delivery points for redirect of scheduled gas quantities," FERC staff said.

The revised standards also reflect the Commission's finding in recent orders for coordination of communications between natural gas pipelines and electric utilities on standards of conduct, capacity releases and on damage reports, according to FERC [RM96-1].

In addition, the final rule issued Thursday ended a multi-year effort to establish more flexible intraday natural gas scheduling practices. NAESB members found that "none of the nationwide scheduling solutions [that were examined] is superior to the balance between the users of firm and interruptible services provided by the current standards," FERC staff said.

"NAESB natural gas and electricity industry members worked together for several years seeking a consensus [intraday scheduling] standard. However, they failed to find a consensus method that would add greater flexibility for some shippers without imposing greater burdens on other shippers," the agency said.

The final rule also accepted the consensus business practice standard on gas quality issues, finding that the existing practices are "sufficient."

The Commission issued the final rule only four months after adopting the notice of proposed rulemaking on the business practice standards. The final rule requires interstate pipelines to file tariff sheets reflecting these changed standards by Sept. 1, with the revised standards to take effect Nov. 1. Pipelines will be required to begin implementing the revisions on Nov. 1.

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