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The Pipeline Business

Fortnightly Magazine - September 15 1995

account, invoices and remittances, all done electronically, in common format. The gas industry did not invent EDI, and it would be hard to imagine that consumers already well versed in bar code scanners at supermarkets, charge card gas pumps, ATM cash, auto-deposit payrolls, programmable answering machines, and home security systems would have trouble with EDI underpinning the purchase of gas at

home.

The only missing link is a bit of soft business-process engineering on the part of the interstates. If the industry were to move to a take-and-replace system in which firm suppliers provide pipeline linepack up front, flow gas every day, and order gas for the next 24 hours to replace what the consumer took in the last 24 hours, then this morning's meter reading would, indeed, be sufficient for mom to buy gas today.

Who wins? Everybody benefits. Consumers have firm, reliable service they understand and can afford. LDCs that have reserved interstate capacity can sell to the customer exactly what they need and lay off the rest, as is being done (albeit in a much more complicated series of market maneuvers) now. In fact, under certain circumstances, LDCs serving homeowners through behind-the-gate aggregators may be better off shedding the price risk associated with gas sales and selling offpeak capacity as a compliment to the sale of onpeak capacity. More potential customers means more opportunity for marketers and aggregators. Interstate pipelines would finally be able to reconcile on the basis of gas in-gas out, leave the old guess-and-go games behind, and focus on providing quality transportation service. Producers that get into the game will find that the millions in corporate image advertising spent to woo mom's taxi to the gas pumps can get her to pick that brand of natural gas, too.

Eugene R. McGrath

Chairman

Consolidated Edison Co. of New York, Inc.

After a rocky start, the industry and regulators appear to be making good progress toward standardizing EDI. More work is needed in the pipeline EBB area. Once the FERC ordered EBBs as part of 636, each pipeline company developed its own proprietary system. To clear up the resulting confusion, the FERC's EBB working groups worked hard to bring together the many market segments with different interests. In the past year, the new GISB, of which Con Edison is a strong supporting member, has taken the work of the EBB working groups and promulgated a number of industry standards for EDI. EDI will replace the multiple proprietary bulletin boards and allow users (LDCs, marketers, or end-use customers) to nominate and confirm gas transactions directly with the pipeline. For smaller companies that lack the inhouse expertise to develop these EDI systems, several competing service providers are developing "front-end systems" that will coordinate the many pipeline systems onto one screen or set of screens and move the data in accordance with standards established by GISB. I think that the gas industry has come a long way toward standardization in a relatively short time.

Michael Baly

President & CEO

American Gas Association

Excellent progress has been made on creating standards for