The Federal Energy Regulatory Commission (FERC or Commission) last week released its final rule, Coordination of the Scheduling Processes of Interstate Natural Gas Pipelines and Public Utilities, 151 FERC ¶ 61,049 (2015) designated as Order No. 809, in docket RM14-2. In Order No. 809, the Commission took action on the Notice of Proposed Rulemaking (NOPR) where it had proposed changing the start of the gas day and making scheduling and other changes to the natural gas industry. The Commission in Order No. 809 (1) declined to adopt its NOPR proposal to move the 9 a.m. Central Clock Time (CCT) start of the gas day to 4 a.m. CCT; (2) adopted proposals submitted by the North American Energy Standards Board (NAESB) revising the interstate natural gas nomination timeline and adding an intraday nomination cycle; and (3) adopted a change in its regulations to allow contracting flexibility for natural gas customers through multi-party contracts.
The Commission did not “find a sufficient record at this time to revise the nationwide Gas Day start time as proposed in the NOPR,” and further noted that the record suggested “that the concerns . . . are primarily regional in nature.” Order No. 809 at P 25. Thus, the start of the Gas Day will remain at 9:00 am CCT. Order No. 809 also retains the Commission’s current “no bump” rule, which provides that shippers with firm transportation agreements may not bump flowing interruptible volumes at the last intra-day nomination cycle.
The revised timelines adopted in Order No. 809 are as follows:
In Order No. 809, the Commission also adopted a slightly modified version of its proposal set forth in the NOPR to revise Commission regulations to require interstate natural gas pipelines to permit shippers to enter into multi-party contracts. Order No. 809 clarifies that under a multi-party contract: (1) the shippers and agent must demonstrate their agency relationship in writing, and (2) the shippers must be willing to be treated jointly as one shipper for nomination, allocation and billing purposes. The Commission noted that it has allowed these types of multi-party contracts in individual cases in the past, and indicated that contracts that include these types of requirements were deemed to meet shipper-must-have-title requirements. Order No. 809 also makes clear that pipelines need only offer the multi-party contract option if they receive requests from shippers to enter into such contracts and that pipelines need not offer multi-party contracts for interruptible service.
In terms of next steps, the Commission will require pipelines to file tariff records to adopt the revised nomination and scheduling timelines by February 1, 2016 and to implement those timelines by April 1, 2016. Order No. 809 also notes that the Section 206 proceedings instituted in California Independent System Operator Corp., et al. Order Initiating Investigation into ISO/RTO Scheduling Practices and Establishing Paper Hearing Procedures, 146 FERC ¶ 61,202 (2014) are ongoing. Each ISO and RTO must, within 90 days of publication of Order No. 809 in the Federal Register, propose tariff revisions to coordinate its day-ahead market with the changes adopted in Order No. 809 or show cause why its existing scheduling practices need not be changed.