GISB Expansion Would Include Power Standards

Acknowledging that the natural gas industry had converged to a point with the power industry where it is now one energy industry, the Gas Industry Standards Board (GISB) has adopted a working model for a new organization that would set the rules and practices for wholesale and retail electricity along with natural gas markets. By a unanimous 25-0 vote, GISB formally expanded its purpose to permit the "consideration of electric wholesale and retail standards and model business practices."

Although it still has no formal name, "Strawman 2.1," as the working document is known, changes the scope of GISB, which up to now has been charged with maintaining and improving existing natural gas wholesale market standards. The expanded organization would complement the activities of the North American Electric Reliability Council (NERC) by developing wholesale electricity business practice standards that are consistent with NERC's reliability standards.

"The energy marketplace has become more global and we have to adapt to the market," said William P. Boswell, chairman of GISB's board of directors. "This market is truly an energy market, not merely a gas market. If anything, the lessons of last week drove this home," he said, referring to the U.S. terrorist attacks, which have pushed energy security to the forefront for natural gas and power companies.

Under the overall plan, which Boswell envisions will be ready by early 2002, GISB would become the gas wholesale quadrant of the organization, and it would be up to the electric quadrant to develop its standards. "GISB has neither the interest or the expertise to do (electricity industry) standards," said Boswell. "But it will offer a platform" on which electricity industry standards formation can begin. "GISB is taking a risk...we are becoming less, but by becoming less, we will become something more."

By focusing on reliability, the new organization would not extend to developing standards already established and maintained by the American Gas Association or NERC that pertain to physical safety, physical reliability, facilities construction, equipment manufacturing or the operation of natural gas or electrical equipment.

The new energy board would be charged with standards development activities on electronic exchanges of information, record and data formats, communications protocols and related business practices to streamline the transactional and coordination processes of the electricity and natural gas markets.

Speaking to the GISB conference Thursday by speaker phone, Federal Energy Regulatory Commissioner William Massey said the move to one organization was "one of the most important in the evolution of the electric power industry markets." Noting that he and his fellow Commissioners had for years given their "strong support" to GISB, Massey said that its "extraordinarily fair procedures...with everyone having a voice" pointed to a strong power organization in the future.

"You are moving in the right direction," Massey said. "I believe the GISB has earned the trust and respect of the Commission, and as a whole (it) will applaud your efforts to engage in the same activities for the electric industry. Any reasonable strategy whereby GISB sets uniform business practices for the electric industry has my strongest support."

GISB's legal counsel will draft new bylaws and will release them for public comment by the middle of next month. At its Dec. 5 meeting, GISB is expected to review the comments and move the plan into its final stages. GISB's Strawman 2.1 is available for review on GISB's web site at www.gisb.org.

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