Reporting Interstate Natural Gas Pipeline Marketing Affiliates on the Internet

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 161

[Docket No. RM98-7-000; Order No. 599]

Reporting Interstate Natural Gas Pipeline Marketing Affiliates on

the Internet

Issued July 30, 1998.

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Federal Energy Regulatory Commission (Commission) is

amending its Standards of Conduct regulations to require that

interstate natural gas pipelines identify the names and addresses of

their marketing affiliates on their web sites on the Internet and

update the information within three business days of any change.

Pipelines will also be required to state the dates the information was

last updated.

EFFECTIVE DATE: September 11, 1998.

ADDRESSES: Federal Energy Regulatory Commission, 888 First Street,

N.E., Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT: Stuart Fischer, Office of General

Counsel, Federal Energy Regulatory Commission, 888 First Street, N.E.,

Washington, D.C. 20426, Telephone: (202) 208-1033.

SUPPLEMENTARY INFORMATION: In addition to publishing the full text of

this document in the Federal Register, the Commission also provides all

interested persons an opportunity to inspect or copy the contents of

this document during normal business hours in the Public Reference Room

at 888 First Street, N.E., Room 2A, Washington, D.C. 20426.

The Commission Issuance Posting System (CIPS) provides access to

the texts of formal documents issued by the Commission. CIPS can be

accessed via Internet through FERC's Homepage (http://www.ferc.fed.us)

using the CIPS Link or the Energy Information Online icon. The full

text of this document will be available on CIPS in ASCII and

WordPerfect 6.1 format. CIPS is also available through the Commission's

electronic bulletin board service at no charge to the user and may be

accessed using a personal computer with a modem by dialing 202-208-

1397, if dialing locally, or 1-800-856-3920, if dialing long distance.

To access CIPS, set your communications software to 19200, 14400,

12000, 9600, 7200, 4800, 2400, or 1200 bps, full duplex, no parity, 8

data bits and 1 stop bit. User assistance is available at 202-208-2474

or by E-mail to [email protected]

This document is also available through the Commission's Records

and Information Management System (RIMS), an electronic storage and

retrieval system of documents submitted to and issued by the Commission

after November 16, 1981. Documents from November 1995 to the present

can be viewed and printed. RIMS is available in the Public Reference

Room or remotely via Internet through FERC's Homepage using the RIMS

link or the Energy Information Online icon. User assistance is

available at 202-208-2222, or by E-mail to [email protected]

Finally, the complete text on diskette in WordPerfect format may be

purchased from the Commission's copy contractor, La Dorn System

Corporation. La Dorn Systems Corporation is located in the Public

Reference Room at 888 First Street, N.E., Washington, D.C. 20426.

I. Introduction

The Federal Energy Regulatory Commission (Commission) is amending

its regulations in section 161.3 to require that interstate natural gas

pipelines identify the names and addresses of their marketing

affiliates on their web sites on the Internet. By doing so, the

Commission will make it easier for the public to identify each

interstate gas pipeline's current marketing affiliates. The new

regulation is necessary to further assist the Commission in its

oversight efforts as well as to permit shippers to effectively monitor

transportation transactions between pipelines and their affiliated

marketers.

II. Background

A. Regulatory History

The Commission, in Order Nos. 497 et seq.1 and Order

Nos. 566 et seq.,2 established rules intended to prevent

interstate natural gas pipelines from providing preferential treatment

to their marketing or brokering affiliates. Specifically, the

Commission adopted Standards of Conduct (codified at Part 161 of the

Commission's regulations) 3 and reporting requirements

(codified in sections 161.3(h)(2) and 250.16).4

---------------------------------------------------------------------------

\1\ Order No. 497, 53 FR 22139 (June 14, 1988), FERC Stats. &

Regs. 1986-1990 para. 30,820 (188) (Order No. 497); Order No. 497-A,

order on rehearing, 54 FR 52781 (December 22, 1989), FERC Stats. &

Regs. 1986-1990 para. 30,868 91989); Order No. 497-B, order

extending sunset date, 55 FR 53291 (December 28, 1990), FERC Stats.

& Regs. 1986-1990 para. 30,908 (1990); Order No. 497-C, order

extending sunset date. 57 FR 9 (January 2, 1992), FERC Stats, &

Regs. 1991-1996 para. 30,934 (1991), rehearing denied, 57 FR 5815

(February 18, 1992), 58 FERC para. 61,139 (1992); Tenneco Gas v.

FERC (affirmed in part and remanded in part), 969 F.2d 1187 (D.C.

Cir. 1992); Order No. 497-D, order on remand and extending sunset

date, FERC Stats. & Regs. 1991-1996 para. 30,958 (December 4, 1992),

57 FR 48978 (December 14, 1992); Order No. 497-E, order on rehearing

and extending sunset date, 59 FR 243 (January 4, 1994), 65 FERC

para. 61,381 (December 23, 1993); Order No. 497-F, order denying

rehearing and granting clarification, 59 FR 15336 (April 1, 1994),

66 FERC para. 61,347 (March 24, 1994); and Order No. 497-G, order

extending sunset date, 59 FR 32884 (June 27, 1994), FERC Stats. &

Regs. 1991-1996 para. 30,996 (June 17, 1994).

\2\ Standards of Conduct and Reporting Requirements for

Transportation and Affiliate Transactions, Order No. 566, 59 FR

32885 (June 27, 1994), FERC Stats. & Regs. 1991-1996 para. 30,997

(June 17, 1994) (Order No. 566); Order No. 566-A, order on

rehearing, 59 FR 42896 (October 20, 1994), FERC Stats. & Regs. 1991-

1996 para. 31,002 (October 14, 1994) (Order No. 566-A); Order No.

566-B, Order on rehearing, 59 FR 65707 (December 21, 1994), 69 FERC

para. 61,334 (December 14, 1994).

\3\ 18 CFR 161.3 (1998).

\4\ 18 CFR 161.3(h)(2) and 250.16 (1998).

---------------------------------------------------------------------------

The Standards of Conduct govern the relationships between pipelines

and their marketing affiliates. In general, they provide that pipelines

and their marketing affiliates must function independently of each

other. Pipelines cannot favor their marketing affiliates of providing

transportation services or in providing transportation information or

transportation discounts not available to non-affiliates.

However, there was no requirement in the Commission's regulations

for pipelines to report the names of their marketing affiliates or

changes in the status of marketing affiliates as they occur through,

for example, acquisitions of new affiliates, or divestitures,

consolidations, or name changes of prior affiliates.

[[Page 43076]]

B. The NOPR

The May 13, 1998 Notice of Proposed Rulemaking (NOPR) 5

proposed to add section 161.3(l), which would require pipelines to post

on their web sites on the Internet, the names and addresses of their

marketing affiliates and to update this information within three

business days of any change. A pipeline would also be required to state

the date the information was last updated.

---------------------------------------------------------------------------

\5\ 83 FERC para. 61,146 (1998).

---------------------------------------------------------------------------

The NOPR stated that the proposed new regulation was necessary to

further assist the Commission's oversight efforts as well as to enable

the public to monitor pipeline-affiliate transactions. Marketing

affiliations change rapidly in today's business climate. It is

important for the public and the Commission to have a current picture

of the pipelines' marketing affiliates to determine if pipelines are

complying with the regulatory requirements.

The NOPR further stated that posting marketing affiliates' names

and addresses on a pipeline's web site on the Internet would minimize

the burden on pipelines and the Commission's administrative resources.

The NOPR concluded that the burden on pipelines would be slight, as

pipelines are already required to have web sites under Order No. 587-C

and would only have to add the affiliate information.

C. Federal Register Notice and Comments

The NOPR was published in the Federal Register on May 19,

1998,6 with comments due on or before June 19, 1998. The

Commission received seven comments, which are discussed below. The

commenters are: Shell Gas Pipeline Company (Shell); Michigan Gas

Storage Company (MGSC); Williston Basin Interstate Pipeline Company

(Williston); Great Lakes Gas Transmission Limited Partnership (Great

Lakes); Public Utilities Commission of Ohio (PUCO); the Interstate

Natural Gas Association of America (INGAA); and the Enron Interstate

Pipelines (Enron).

---------------------------------------------------------------------------

\6\ 63 Fed. Reg. 27526 (May 19, 1998).

---------------------------------------------------------------------------

III. Discussion

A. Scope of the Rule

1. Comments

Shell states that, because the NOPR proposes an amendment to Part

161 of the Commission's regulations, the rule should be ``applicable

only for pipelines and marketing affiliates to which this Part applies,

as specified by section 161.1.'' Specifically, Shell asks for

clarification that the rule would not apply to interstate gas pipelines

that do not engage in transportation transactions with their marketing

affiliates.

Great Lakes comments that requiring a pipeline to list marketing

affiliates that it does not conduct business with places an unnecessary

burden on the pipeline to monitor the actions of its parents and

subsidiaries, and adds to the burden on the Commission and on non-

affiliated shippers to monitor companies that may never conduct

transactions with the pipeline subject to Commission oversight.

2. Commission Ruling

Section 161.1 of the Commission's regulations, 18 CFR 161.1 (1998),

limits the applicability of the standards of conduct to any pipeline

that has transportation transactions with its marketing or brokering

affiliate.7 The new Standard of Conduct is only applicable

to interstate natural gas pipelines that meet the criteria of section

161.1. Thus, the posting requirements would not apply to interstate

natural gas pipelines that do not have transportation transactions with

their marketing affiliates. Nor does the name and address of a

marketing affiliate have to be posted unless the marketing affiliate

has transportation transactions on the affiliated pipeline. We note

that a marketing affiliate need not be a shipper to have a

transportation transaction with its affiliated pipeline.8

---------------------------------------------------------------------------

\7\ Section 161.1 identifies transportation under Part 157,

Subpart A (Natural Gas Act certificate) and Part 284, Subparts B

(Natural Gas Policy Act) or G (blanket certificate under the Natural

Gas Act).

\8\ See Order No. 566, FERC Stats. & Regs. 1991-1996 at 31,068-

69 and Order No. 566-A, FERC Stats. & Regs. 1991-1996 at 31,126. For

example, a marketing affiliate may act as an agent in a transaction

by arranging for gas supplies and/or transportation for a shipper on

the related pipeline.

---------------------------------------------------------------------------

B. Posting Requirements

All of the commenters either supported or did not oppose the

requirements that interstate natural gas pipelines identify the names

and addresses of their marketing affiliates on their web sites and

update the information.

Enron states that the posting requirement provides an excellent

opportunity to update the Commission's regulations to take advantage of

advances in information technology.

PUCO states that it believes that the proposed rule will assist

Commission oversight efforts to ensure that pipelines adhere to the

standards of conduct. It further comments that the posting requirement

will ensure the availability of timely information, which is important

in today's environment of increasing and numerous acquisitions and

mergers. PUCO states that requiring the disclosure of affiliated

marketer information on each pipeline's web site will not impose a

significant additional burden on the pipeline, as the Commission has

previously required that each pipeline post information on a web site.

Finally, PUCO states that the availability of the names and addresses

of pipeline marketing affiliates will be important to its staff for

obtaining necessary and timely information.

Great Lakes states that it supports the Commission's effort to

utilize Internet technology to provide timely and relevant information

in a convenient way.

C. Timing of Postings

1. Comments

Several commenters opposed the proposal to update postings of the

names and addresses of marketing affiliates within three business days

of a change in the information. Williston commented that it did not

oppose the three business day deadline, but would be opposed to a

shorter period.

Enron and MGSC raised specific concerns that a three day period for

updates would be burdensome.9 Enron contends that a three

day reporting deadline will add a burden on pipeline staff and

resources without providing any additional protection against

discrimination. Enron states that the Commission does not fully

appreciate the resources that would be required for companies like

Enron to identify and post name changes within three days. It states

that most energy companies today are diverse organizations with

affiliates engaged in many different enterprises. By way of example,

Enron states that in 1997 its corporate family had 109 incorporations,

101 acquisitions, 43 name changes and six dissolutions, and that the

majority of the companies involved are not marketing affiliates.

---------------------------------------------------------------------------

\9\ In their comments, Enron, MGSC and Great Lakes referred to

the update period as three days, not three business days as stated

in the NOPR.

---------------------------------------------------------------------------

Enron contends that, to ensure compliance with the proposed rule,

pipelines must make a daily review of a complete roster of affiliates,

and that jointly-owned or partnership pipelines have the additional

task of reviewing records of both operating and non-operating companies

or partners. Enron states that only by reviewing a comprehensive

affiliate list, together with information on whether an affiliate buys

or sells or transports gas on the affiliated pipeline, can a pipeline

determine if a change must be posted.

MGSC comments that no showing has been made in the NOPR that the

posting

[[Page 43077]]

needs to be made as quickly as three days or 24 hours.10

MGSC states that pipelines do not have contemporaneous knowledge of

their marketing affiliates' business activities.

---------------------------------------------------------------------------

\10\ In a concurring opinion to the NOPR, Commissioner Massey

advocated a 24-hour period after a change occurs as a deadline for

posting updated information.

---------------------------------------------------------------------------

MGSC further comments that ``marketing affiliates,'' as defined in

section 161.2(a) of the Commission's regulations, can be distantly

related to a pipeline.11 MGSC states that its first

marketing affiliate was a partnership, a partner of which is a

subsidiary of MGSC's parent. MGSC states that its parent has one

representative on the management committee of the partnership, which is

primarily engaged in generating electricity. MGSC asserts that it is

not in a position to post or know of changes in the affiliate's

activities and status on a day-to-day basis.

---------------------------------------------------------------------------

\11\ Section 161.2(a) of the Commission's regulations states

that ``affiliate,'' when used in reference to any person in Part 161

or section 250.16, means another person which controls, is

controlled by, or is under common control with, such person. 18 CFR

161.2(a) (1998).

---------------------------------------------------------------------------

Both Enron and MGSC contend that a three-day update requirement

would lead to greater communications between pipelines and their

marketing affiliates. Enron states that the imposition of a 24-hour or

three-day update requirement would necessitate increased day-to-day

communications between the pipeline and the affiliate. MGSC states

that, under the proposed posting requirements, pipelines would be

required to keep closer contact with their marketing affiliates' plans

and activities. MGSC contends that this would be inconsistent with the

prohibitions against inappropriate entanglements between pipelines and

marketing affiliates.

INGAA proposes an alternative to the NOPR's three business day

update requirement, which was supported in the comments by Enron and

Great Lakes. INGAA proposes that pipelines report changes in marketing

affiliate names and addresses contemporaneously with any new

transportation transactions or discounts with their marketing

affiliates. Citing language from Order No. 497, INGAA argues that if a

marketing affiliate has no transactions on its affiliated pipeline,

then there is no possibility for abuse.12

---------------------------------------------------------------------------

\12\ Order No. 497, FERC Stats. & Regs. 1986-1990 at 31,131.

---------------------------------------------------------------------------

Enron contends that INGAA's suggestion that pipelines post names

contemporaneously with discounts or new transactions meets the

objective to protect against discrimination without requiring a lot of

time searching corporate records. Enron further argues that, unless the

pipeline enters into a new transaction or discount, the pipeline has no

immediate reason to know or anticipate affiliate name changes.

Great Lakes supports INGAA's comments and states that the

Commission's goal to enable it and nonaffiliated shippers to

efficiently monitor pipeline-affiliate transactions can be achieved by

more limited requirements than those described in the NOPR. Great Lakes

suggests that pipelines should report marketing affiliate names and

addresses contemporaneously with any regulated transaction that the

affiliate conducts with the pipeline.

Enron, Great Lakes and MGSC also suggested alternative time periods

for updating changes in the names and addresses of marketing

affiliates. Enron asks that, if the Commission does not accept INGAA's

proposal, it adopt a 30-day deadline to update marketing affiliate

names. Great Lakes proposes that a pipeline should be responsible for

updating its posting of the names and addresses of its marketing

affiliates only after it has become aware of changes, regardless of the

actual effective dates of the changes. MGSC asserts that, because

marketing affiliates are customers of the pipelines, pipelines will

learn of their affiliates' changes in names and addresses in the

ordinary course of business. MGSC contends that the NOPR did not

present any reason for needing, or even wanting, such status changes

posted on a more expedited basis.

Finally, two commenters, Enron and Williston, specifically

addressed the 24-hour update deadline proposed in the concurrence to

the NOPR. Enron contends that the examples in the concurrence of 24-

hour reporting deadlines are not comparable to the updates proposed in

the NOPR. Enron contends that the 24-hour deadlines for electric

utilities to report emergency deviations on the OASIS and for

hydroelectric power licensees to report deviations from state water

quality standards involve exception-based reporting. In contrast, Enron

states that keeping track of changes to marketing affiliates would

require a continuous review of corporate organizational records. Enron

further states that the 24-hour posting deadline for discounts comports

with INGAA's suggestion to post name changes concurrently with posting

discounts to the marketing affiliate.

Williston states that requiring updates within a shorter time frame

than three business days would increase the administrative burden

associated with monitoring affiliate names and addresses and create

havoc if changes were received on short notice and the necessary

administrative personnel to post such information were unavailable.

Williston states that employees are not informed instantaneously of

companies that the pipeline has purchased. It asserts that closings

take place before the information is disseminated to pipeline

employees, making it difficult to ensure that the marketing affiliate

information is accurate in less than three business days. Williston

contends that the three business day requirement for posting changes to

marketing affiliate names and addresses affords the Commission and the

public adequate notice of any changes without causing the problems that

would be associated with a shorter time frame.

2. Commission Ruling

The Commission is retaining the three business day time period

after a change occurs in which a pipeline must update the names and

addresses of its marketing affiliates.

As discussed earlier, a pipeline must only post and update the

names and addresses of marketing affiliates that are involved in

transportation transactions on its pipeline facilities. Such

transactions are subject to the marketing affiliate rules.

Consequently, it is important that the pipeline, the marketing

affiliate, the Commission and the public know of the affiliate

relationship when such transactions occur. Pipelines have an obligation

to have up-to-date information on the identities of their marketing

affiliates, and to communicate that information to their employees, to

enable the employees to observe the marketing affiliate rules. For

example, under section 161.3(f), to the extent a pipeline provides to a

marketing affiliate information related to the transportation of

natural gas, it must provide that information contemporaneously to all

potential shippers, affiliated and non-affiliated, on its

system.13 Pipeline employees must know the identities of

relevant marketing affiliates to comply with that rule.

---------------------------------------------------------------------------

\13\ 18 CFR 161.3(f) (1998).

---------------------------------------------------------------------------

We believe that three business days is a sufficient and reasonable

period of time in which to provide the Commission and non-affiliated

shippers with a meaningful and timely opportunity to monitor pipelines'

compliance with the marketing affiliate rules. As Enron points out, the

pace of markets today is brisk. As a result,

[[Page 43078]]

unduly discriminatory actions must be corrected quickly if the

correction is to be meaningful. A deadline of three business days to

update changes in the names and addresses of marketing affiliates

should provide enough time for pipelines to obtain information about

changes and to update their web sites.

Williston does not object to the three business day

requirement.14 Only Enron and MGSC raised specific arguments

that three business days is an inadequate period of time in which to

update changes in the names and addresses of marketing

affiliates.15 Enron argues that it would have to conduct a

daily review of all of its corporate affiliations because of the

numerous changes that occur. However, because pipelines must post only

the names and addresses of marketing affiliates that have

transportation transactions with their affiliated pipelines, Enron

should not have to conduct an involved search to comply with this Final

Rule. Moreover, because pipelines are already required to know the

identities of their marketing affiliates so that they can comply with

the preexisting Standards of Conduct, we are unpersuaded that the

difficulty cited by MGSC concerning locating marketing affiliates

associated with a partnership is a legitimate reason for requiring a

longer update period than three business days.

---------------------------------------------------------------------------

\14\ Because the Commission is retaining the three business day

update period from the NOPR, we need not address Williston's and

Enron's comments concerning an update period of less than three

business days.

\15\ Great Lakes generally argued that it is not in a position

to ensure its compliance with the requirement, but did not provide

details. INGAA provided an alternative proposal, but did not address

why it believed that the three business day requirement would be

inadequate.

---------------------------------------------------------------------------

None of the alternative proposals made by the commenters would

further the purpose of enabling the Commission and non-affiliated

shippers to monitor transactions between a pipeline and its marketing

affiliates in a timely manner. INGAA proposed that a pipeline report

changes in a marketing affiliate's name or addresses contemporaneously

with any new transportation transaction or new discount with the

marketing affiliate. However, INGAA's proposal is inadequate for

monitoring all types of conduct covered by the Standards of Conduct in

Part 161 because it excludes existing transactions involving newly

acquired or renamed affiliates. For example, section 161.3(c) prohibits

preferences to affiliates in scheduling, balancing and curtailments,

all matters that apply to existing transactions. Further, pipelines

that have existing transportation agreements with marketing affiliates

may not disclose non-affiliated shipper information covered by section

161.3(e) or selectively disclose transportation information under

section 161.3(f). Accordingly, INGAA's proposal would leave an

information gap because marketing affiliates in existing transactions

would not be covered.

We also reject the alternate posting time periods proposed by MGSC,

Great Lakes and Enron. Choosing an amorphous standard such as when a

pipeline learns of the change in the ordinary course of business, as

suggested by MGSC and Great Lakes, or a 30-day deadline, as proposed by

Enron, would defeat the purpose of making up-to-date information

concerning pipelines' transactions with their marketing affiliates

publicly available.

Finally, we are unconvinced that, as suggested by Enron and MGSC,

keeping track of changes in the names and addresses of marketing

affiliates is inconsistent with the principles of separation between

pipelines and their marketing affiliates. The Standards of Conduct do

not prohibit transactions between a pipeline and its marketing

affiliates but place restrictions on those transactions to prevent

pipelines from providing undue preferences to their affiliates. To

ensure compliance with the marketing affiliate regulations, pipelines

must be aware of newly acquired marketing affiliates and changes in

status of preexisting marketing affiliates.

In conclusion, we find that three business days is an adequate and

reasonable amount of time for a pipeline to update on its web site

changes in the names and addresses of its marketing affiliates.

D. Effect on Other Regulatory Requirements

INGAA asks that the Commission relieve pipelines from the

``redundant'' requirement to update their tariffs to reflect marketing

affiliate name and address changes. However, there was no prior

requirement in the Commission's regulations that pipelines report the

names and addresses of their marketing affiliates in their tariffs.

There is a requirement, in section 250.16, that pipelines include

in tariff provisions a complete list of operating personnel and

facilities shared by the pipeline and its marketing affiliates, and the

procedures used to address and resolve complaints by shippers and

potential shippers. 18 CFR 250.16 (1998). This Final Rule does not

duplicate the requirements of section 250.16 and is not redundant.

Great Lakes asks that the Commission eliminate the requirement that

pipelines list all of their affiliated entities, including marketing

affiliates, in their annual Form 2 filings. Great Lakes argues that the

annual data in the Form 2 does not keep abreast of changes in affiliate

status and does not distinguish marketing or brokering affiliates.

We reject Great Lakes's request. The purpose of the Form 2 is to

provide adequate financial and statistical data on an annual basis to

allow the Commission, other government agencies and the public to

adequately assess a pipeline's operations and financial condition. To

this end, the requirement to list affiliates in the Form 2 includes all

affiliates, not just marketing affiliates. The Form 2 data serve a

valid purpose that the information required by this Final Rule does not

duplicate.

E. Waivers

The NOPR did not address waivers of the requirements that a

pipeline post and update the names and addresses of its marketing

affiliates on its web site. At the time the Commission issued the NOPR,

it had not granted waivers of the GISB web site requirements of Order

No. 587, et seq.,16 that extended beyond June 1, 1998.

However, the Commission recently granted several waivers extending

beyond that date, including waivers to pipelines that have filed

Standards of Conduct.17

---------------------------------------------------------------------------

\16\ Standards For Business Practices Of Interstate Natural Gas

Pipelines, Order No. 587, 61 FR 39053 (Jul. 26, 1996), III FERC

Stats. & Regs. Regulations Preambles para. 31,038 (Jul. 17, 1996);

Order No. 587-B, 62 FR 5521 (Feb. 6, 1997), III FERC Stats. & Regs.

Regulations Preambles para. 31,046 (Jan. 30, 1997); Order No. 587-C,

62 FR 10684 (Mar. 10, 1997), III FERC Stats. & Regs. Regulations

Preambles para. 31,050 (Mar. 4, 1997); Order No. 587-D, order

denying rehearing, 62 FR 19921 (Apr. 24, 1997), III FERC Stats. &

Regs. Regulations Preambles para. 31,052 (Apr. 18, 1997); Order No.

587-E, order denying rehearing and request for waiver, 62 FR 25842

(May 12, 1997), III FERC Stats. & Regs. Regulations Preambles para.

31,053 (May 6, 1997); Order No. 587-G, 63 FR 20072 (April 23, 1998),

III FERC Stats. & Regs. Regulations Preambles para. 31,062 (April

16, 1998); and Order No. 587-H, 63 FR 39509 (July 23, 1998), III

FERC Stats. & Regs. Regulations Preambles para. ________(July 15,

1998).

\17\ E.g., KO Transmission Company (Docket No. RP98-200-000),

Midcoast Interstate Transmission Company (Docket No. RP97-278-000).

---------------------------------------------------------------------------

No commenter raised the waiver issue. Nevertheless, we do not want

to force pipelines that received waivers of the Order No. 587

requirements to have to seek additional waivers of the requirements of

this Final Rule. All of the pipelines with a waiver of the Order No.

587 requirements for posting information on a web site use either an

electronic bulletin board (EBB) or some

[[Page 43079]]

other means approved by the Commission to comply with other Standard of

Conduct requirements (e.g., section 161.3(h)).18 Such

pipelines can comply with the requirements of this Final Rule during

the waiver period by identifying the names and addresses of their

marketing affiliates on their EBBs, or if the Commission has granted

the pipeline a waiver of the EBB requirements, through the facility

approved by the Commission in lieu of an EBB.

---------------------------------------------------------------------------

\18\ For example, the Commission approved KO Transmission

Company's use of a telephone recorded message instead of an EBB. KO

Transmission Company, 74 FERC para. 61,101 at 61,311 (1996).

---------------------------------------------------------------------------

IV. Regulatory Flexibility Act Certification

The Regulatory Flexibility Act of 1980 (RFA) 19

generally requires a description and analysis of rules that will have

significant economic impact on a substantial number of small entities.

In the NOPR, the Commission concluded that the proposed rule would

benefit small entities by making it easier for small customers to

monitor pipelines' transactions with their marketing affiliates. No

comments were submitted alleging any significant economic effect on

small entities. Accordingly, pursuant to section 605(b) of the RFA, the

Commission hereby certifies that the regulations proposed herein will

not have a significant adverse impact on a substantial number of small

entities.

---------------------------------------------------------------------------

\19\ 5 U.S.C. 601-612 (1996).

---------------------------------------------------------------------------

V. Environmental Analysis

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.20 The

Commission has categorically excluded certain actions from these

requirements as not having a significant effect on the human

environment.21 This Final Rule falls within the categorical

exclusion which specifies that information gathering, analysis, and

dissemination are not major federal actions that have a significant

effect on the human environment.22 The Final Rule also falls

under the categorical exclusion for rules concerning the sale,

exchange, and transportation of natural gas that requires no

construction of facilities.23 Thus, neither an environmental

impact statement nor an environmental assessment is required.

---------------------------------------------------------------------------

\20\ Order No. 486, Regulations Implementing the National

Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Statutes

and Regulations, Regulations Preambles 1986-1990 para. 30,783

(1987).

\21\ 18 CFR 380.4 (1998).

\22\ 18 CFR 380.4(a)(5) (1998).

\23\ 18 CFR 380.4(a)(27) (1998).

---------------------------------------------------------------------------

VI. Information Collection Statement and Reporting Requirements

The OMB regulations require OMB to approve certain reporting and

record keeping (collections of information) imposed by agency

rule.24 OMB has approved the NOPR without comment. The Final

Rule will affect one existing data collection, FERC-592.

---------------------------------------------------------------------------

\24\ 5 CFR 1320.11 (1998).

---------------------------------------------------------------------------

Respondents subject to the filing requirements of this Final Rule

will not be penalized for failing to respond to these collections of

information unless the collections of information display a valid OMB

control number.

Title: FERC-592, Marketing Affiliates of Interstate Pipelines.

Action: Proposed Data Collection, OMB Control No. 1902-0157.

Respondents: Interstate natural gas pipelines (Business or other

for-profit, including small businesses).

Frequency of Responses: On Occasion.

Necessity of Information: The Final Rule revises the filing

requirements contained in 18 CFR Part 161.3 for Standards of Conduct

for interstate natural gas pipelines. The pipelines are being required

to identify the names and addresses of their marketing affiliates on

their web sites on the Internet. The new requirements are necessary for

the Commission's oversight activities and for the public to be able to

monitor pipeline-affiliate transactions. This additional information

provides the Commission and the public with current information on

marketing affiliates to make a determination that pipelines are in

compliance with regulatory requirements.

The Commission received seven comments on its NOPR but none on its

reporting or cost estimates. The Commission's responses to the comments

are addressed in Part III of this Final Rule. The Commission is

submitting a copy of this Final Rule to OMB for information purposes

because the Final Rule is not significantly different from the NOPR.

Interested persons may obtain information on the reporting

requirements by contacting the Federal Energy Regulatory Commission,

888 First Street, NE., Washington, DC 20426 [Attention: Michael Miller,

Office of the Chief Information Officer, (202) 208-1415 or send

comments to the Office of Management and Budget, Office of Information

and Regulatory Affairs (OIRA) (Attention: Desk Officer for the Federal

Energy Regulatory Commission (202) 395-3087, fax: (202) 395-7285).]

VII. Effective Date and Congressional Notification

This Final Rule will take effect on September 11, 1998. The

Commission has determined, with the concurrence of the Administrator of

the Office of Information and Regulatory Affairs of the Office of

Management and Budget, that this rule is not a ``major rule'' within

the meaning of section 251 of the Small Business Regulatory Enforcement

Fairness Act of 1996.25 The Commission will submit the rule

to both houses of Congress and the Comptroller General prior to its

publication in the Federal Register.

---------------------------------------------------------------------------

\25\ 5 U.S.C. 804(2).

---------------------------------------------------------------------------

List of Subjects in 18 CFR Part 161

Natural gas, Reporting and recordkeeping requirements.

By the Commission.

David P. Boergers,

Acting Secretary.

In consideration of the foregoing, the Commission amends Part 161,

Chapter I, Title 18 of the Code of Federal Regulations, as set forth

below.

PART 161--STANDARDS OF CONDUCT FOR INTERSTATE PIPELINES WITH

MARKETING AFFILIATES

1. The authority citation for Part 161 continues to read as

follows:

Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352.

2. In Sec. 161.3, paragraph (l) is added to read as follows:

Sec. 161.3 Standards of Conduct.

* * * * *

(l) A pipeline must post the names and addresses of its marketing

affiliates on its web site on the public Internet and update the

information within three business days of any change. A pipeline must

also state the date the information was last updated. Postings must

conform with the requirements of Sec. 284.10 of this chapter.

[FR Doc. 98-21573 Filed 8-11-98; 8:45 am]

BILLING CODE 6717-01-P