In the view of local distribution companies, standardization canbe a good thing if it streamlines business practices. However,standardization efforts that ignore the uniqueness of individualLDCs, their customers and the states and markets they operate inare unacceptable. LDCs’ view of GISB and its standards is onereason cited for flagging LDC involvement in the standardsorganization.
While it can sometimes cut costs and create efficiencies, LDCsdon’t want standardization across the board, and voice oppositionto GISB standards they view as unworkable at the local LDC level.”Many aspects of unbundling programs are fundamentally differentfrom state to state,” said Andy Sonderman, general counsel forColumbia Gas Distribution Companies. He pointed to variations suchas whether capacity assignment is mandatory or voluntary and howdaily balancing is handled. “At this point in time, variations arenecessary and appropriate,” he told attendees at the Gas IndustryStandards Board’s (GISB) fourth annual meeting last week in SanAntonio.
“Some of the [GISB] standards just don’t make too much sense atthe local level,” said Mary Jane McCartney, senior vice presidentfor gas operations at Consolidated Edison. “The gas day, centralclock time, is useful at the state level if you live where centraltime is the time. But for us using central clock time dealing withNew York customers and New York providers doesn’t really make a lotof sense.
“At ConEdison, we’ve implemented quite a lot of the GISBstandards. The ones that don’t make sense at the state level wehaven’t. The first one and the one that we’ve had the most successwith is the [standardized] short-term contracts. I think that’suniversal. I think that that’s what brought the end user into our[GISB] membership.”
Mike Novak, assistant general manager of National Fuel GasDistribution, advocated a balanced view toward standardization atthe LDC level. “Over time we’ve found a way to balance what wasunique with what was common, and I don’t see that that can’tcontinue in the future, but we have to look at where it can apply.”Novak said National Fuel does much of its business using the GISBstandard contract. Noting that about 40% of National Fuelthroughput is transportation service, the bulk of it provided tosmaller marketers, Novak said his company can’t turn away shipperssimply because they can’t accommodate X12 EDI (electronic datainterchange) as a communication medium. “The final question youshould ask yourself is should GISB standards have a direct orindirect impact [on business]”
Last week FERC took heed of industry concerns over migration tothe Internet and gave pipelines an extra year to adopt interactiveweb sites and EDI. The FERC rule extended the deadline to June 1,2000. The order requires a combination of interactive web sites andEDI. “The fact that customers will have the choice of using EDI forbulk data transfer or standard interactive web sites, which seem tobe more the wave of the future, I think is very important,” saidFERC Chairman James J. Hoecker. “I think it’s important thatindustry has the time to adapt to these changes. This Commission islooking for a smooth transition and looking for the besttechnological solution…”
One of GISB’s goals in the coming year will be to drum upparticipation in the organization among LDCs. While 33 of GISB’s157 members are LDCs – making the industry segment the third mostheavily represented, behind pipelines and service providers – LDCinput into standards development could be greater, conceded GISBExecutive Director Rae McQuade. “We have not had much LDCparticipation, but the LDC participation that we have had has beenstellar. The LDC community as a whole is being represented by acouple of extremely strong leaders. I think the agenda that we have- we’re looking at web site standards – will necessarily bring moreLDCs in because that’s what they’re interested in.”
Losing LDC Members
However, GISB recently lost six LDC members who did not renewmemberships from last year, noted McCartney. She suggested the foursmaller LDCs of the non-renewing group probably were put off by aGISB dues increase. Dues now are $5,000/year for renewing membersand $2,000 for a new member’s first year of membership. McCartneyand other speakers pointed out some concerns LDCs have with regardto GISB. To some, she said, GISB is seen as a driving force pushingLDC unbundling. Mainly though, McCartney and others said LDCssimply fail to see the relevance of GISB to their businesses asthey view the standards organization as a player at the federallevel only.
That perception exists among regulators, too. “It has struck mefrom the beginning that GISB was known as an interstate pipelineactivity, one which would give them the tools with which to shareinformation and make information available to their customers,”said Bruce Ellsworth, a commissioner with the New Hampshire PublicUtilities Commission. However, “State regulators, I think, aregreatly affected by the activities of GISB because the LDCs aremore and more finding themselves affected by GISB. So that is why Ithink we have a presence on the advisory council. We have a verydefinite reason to want to protect the interests of the LDCs,protect the interests of the customers of the LDCs, and I thinkit’s fitting that we all work together in learning from theinterstate pipelines and their reaction to GISB.”
Joe Fisher, San Antonio
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