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News Analysis

But the standards board must surmount differences with electric brethren before repeating its gas industry success.
Fortnightly Magazine - April 1 2001

might prefer to allocate more of its gas to the capacity release contract to satisfy its minimum volume commitment.

Most stakeholders have agreed that the idea is a good one. The intention would be to enable shippers to allocate gas supplies across their contracts so that they could choose the most economical transportation. But the devil is in the details. The snag lies not in whether to do it, but how to do.

Yet GISB could only get so far before hitting a brick wall. That's when the standards board, which is accustomed to having other parties approach them for assistance, found itself going to the Federal Energy Regulatory Commission to help hammer out exactly how this would work. Last June, the standards board reported that its executive committee was unable to achieve a consensus on cross contract ranking and that in the committee's opinion, no further progress could be made.

The FERC followed by issuing a notice of proposed rulemaking proposing to require pipelines to permit shippers to designate and rank the pipeline contracts. That docket (RM96-1- 015) received a full day's worth of debate and stakeholder presentations at a FERC technical conference on Feb. 27, in which GISB participated.

GLASSY-EYED REGULATORS. Judging from the technical conference, it appears that the FERC will have no easier time of it. At the crux of the dispute is the amount of supplemental information pipelines should provide to shippers and over the method of confirmation with producers, independent of the cross-contracting issue. In the end, the conference seemed to create more questions than it answered. And while it may have drawn a pinch of passion from a couple participants, the conference caused others to nod off—literally. Similarly, the FERC staff, at times, appeared equally glassy-eyed by the presentations, spending much of its time asking and repeating questions for clarification. But such is the purpose of a technical conference.

"I'm glad we're getting this on tape," quipped one FERC staffer at one point when the discussion grew particularly thick.


EEI, meanwhile, opts for a slightly more segregated approach, dividing its business units into three: gas wholesale, retail gas and electric, and electric wholesale. Significantly, under EEI's model, the gas wholesale unit would consist of what is now known as GISB, which apparently would be locked inside the parameters of the gas wholesale unit, where it would perform the same role that it traditionally has performed. That, after all, is GISB's area of expertise, points out EEI. While GISB's mandate authorizes it to address gas retail standards even now, the EEI approach calls for the "continuing provision" of retail energy business practices by its Uniform Business Practices project, which has issued two reports addressing business practices, one on retail energy on Nov. 22, and the other on unbundled electricity on Dec. 5. (See)

Yet, working on retail standards for natural gas and electric simultaneously apparently was the reason that GISB become involved in the effort in the first place. From McQuaid's point of view, the CUBR came to GISB because it saw a need for