pipelines

UPDATED on 12/27/2018
This article has been updated to reflect the defined dates for implementation of the NAESB requirements. The original version of this article was written before the issuance of order #587-Y and the timelines presented by the author were speculative.


As you may already be aware, FERC has proposed to adopt Version 3.1 of the NAESB Standards. Today we will provide an overview of the upcoming North American Energy Standards Board (NAESB) Version 3.1 Standards which have been proposed for adoption by the Federal Energy Regulatory Commission (FERC). Our organization has been involved with NAESB since its inception in 2002, and with the Gas Industry Standards Board (GISB), the precursor to NAESB, before that.
The changes in Version 3.1 are not nearly as dramatic as those in Version 3.0 which is the current standard. There are no new nomination cycles and no new or expanded gas-electric coordination measures. Many of the changes are data-centric – that is, they incorporate changes or additions to current NAESB data that appears on Customer Activities web sites and in EDI transactions. And many of these changes are “Business Conditional”, which means that they only are applicable if you, or your trading partners, decide to employ them. But before we dig into the technology and data changes and nomination paths, let’s look at the timing of NAESB Version 3.1.

Order Timing

FERC’s NAESB Version 3.1 Notice of Proposed Rule-Making (NOPR) was published September 1, 2018. This starts a 30-day public comment period, which ended on September 30, 2018. The order, which is order #587-Y was issued November 15, 2018 by the FERC and the implementation date is beginning August 1, 2019.  Additionally, the timeline for effective parties to file comporting tariffs is April 1, 2019. If you are a FERC-regulated entity, it is best to start your planning now. In the next section, we will cover the technology changes in Version 3.1.

Technology Changes

Rounding of EPSQ
With the addition of a fifth daily nom cycle in Version 3.0, the math required to calculate partial day flow amounts suddenly got tougher (What’s the decimal representation for 11/24ths?). To standardize the math, Version 3.1 clarifies that 7 decimal places should be used to calculate flow quantities.
On-Screen
Version 3.1 contains four changes to Customer Activities web sites. The first is an expansion of the length of the comment field. The second is an update of the flexibility for on-screen checkboxes and radio buttons. Third is an update to the allowable browser versions. And finally, the version of SSL used to secure Internet transactions has been updated.

NAESB 3.1 Nomination Paths

If you use – and understand – Pathed Nonthreaded nominations (a subject for another post), Version 3.1 changes the requirement to include the Shipper contract with nominations and scheduled quantities. Specifically, the contract is now Business Conditional in the unthreaded segment (it’s still required in the threaded segment). It’s tricky, but the change cleans up an issue that has been “worked around” for decades.
Agency
Since the creation of the initial NAESB standards, nominations (and related transactions) have contained only a single party reference – the service requester (read: shipper). Version 3.1 adds the option to include an “agent” field to make clear all the parties to the nomination.
Out of Balance
Shippers that trade pipeline imbalances may now have the option to specify additional info that helps define the trade time period, the quantity, and the contract for offered imbalances. The new standards also reinstate the ability for a counterparty to accept or reject the imbalance trade.
Measurement
NAESB also added two optional date elements that allow the sender of measurement data to specify “uncorrected” (or initial) data, and add explanatory comments.
Bad Credit
Finally, Version 3.1 incorporates an optional addition to capacity release transactions that allows the releasing shipper to waive the bidder’s credit requirements (if the pipeline tariff so allows).

Author:
Leigh Spangler is president at Latitude Technologies, an ESG Company, and serves as a member of the NAESB Board of Directors, the NAESB Wholesale Gas Quadrant (WSQ) Executive Committee, Chair of the WGQ Electronic Delivery Mechanism Subcommittee and Chair of the NAESB Board Certification Program Committee.

Spangler graduated from Virginia Polytechnic Institute and State University, where he studied electrical and electronics engineering and received his M.B.A. in business administration, management and operations from the University of Texas. He served on various NAESB task forces and subcommittees, including the WGQ FERC Forms Subcommittee, the GISB Future Technology Task Force and the GISB EBB-Internet Implementation Task Force.

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