GISB Meeting Brings Promise, Compromise, Light Reprimand

Fortnightly Magazine - December 1995
The Gas Industry Standards Board (GISB) has extended its lifespan and broadened its scope to tighten business practices and improve electronic transactions.

At its first-ever annual meeting, held in Baltimore, MD, GISB also was gently chided and commended by James J. Hoecker of the Federal Energy Regulatory Commission (FERC): "I submit to you that GISB must not, in an attempt to please everyone, set standards at the lowest common denominator. Nor can GISB sidestep the ways it comes to grips with tough issues simply because a perfect consensus proved elusive."Hoecker's comments seemed to temper those of FERC chair Elizabeth A. Moler. At the Interstate Natural Gas Association (INGAA) meeting in mid-October, Moler used stronger language. She said the FERC wants real movement on electronic communication standards, and "we frankly don't care who gets this done."

The GISB Board of Directors meeting, October 23, proved to some members that GISB could reach consensus on tough issues. The board extended the date of its charter and broadened its scope (em a compromise with its gas producer segment after heavy debate.

GISB has 200 members in the pipeline, local distribution, producer, service, and end-user segments. Five representatives from each segment serve on the board of directors. GISB is independent, and plans to develop and maintain voluntary standards governing electronic transactions and communications. The FERC has mandated pipeline electronic bulletin boards (EBBs) and transport capacity-release transactions.

Board member Jerry Jordan of Clinton Gas Systems, Inc., a producer, told the board he liked the charter's "sunset provision." "Because if we don't make progress, I'm not sure this is the vehicle to do it," he said. He added that GISB was the right organization to accomplish the mission, but that he wasn't happy with its headway.

Stephen Chesebro', GISB board chairman, of Tenneco Gas, countered that it took a year and half simply for GISB to shape itself and to build trust among members. Dennis Holbrook, executive committee chairman, of National Fuel Gas Distribution Corp., noted that the board's aggressive 1996 plan places a high priority on electronic commerce. Some 47 of 48 action items in 1995 plan were completed.

An early vote failed, but when the resolution was split, dividing the sunset provision and the widened scope, both measures passed. One hundred "yes" votes from members were expected to ratify the board tally.

Once the vote is formalized, GISB's charter will end not on October 1, 1996, but December 31, 1998.

By expanding its scope, GISB will be able to deal with business practices related to electronic commerce. The change allows the board to get into the nuts and bolts of communication. Regarding nominations, for example, the board will be able to address such questions as: How much time is required? When are nominations due? What do pipelines require? A new GISB subcommittee will look into these and other business practice issues.

The board's actions may be timely, considering that the FERC issued a proposal October 25, the last day of the annual meeting, to inquire about the industry's progress in developing electronic communication standards.

On October 24, Hoecker told GISB members, "You are capable of achieving what government mandates can only approximate." He said the FERC had keen interest the market expanding on its own, yet "open access with flawed data and flawed communications is suboptimal." He said he was encouraged by the board's vote to expand its scope to address communications issues.

He also agreed that progress toward meaningful standardization of pipeline data and pipeline practices has been "unacceptably slow." Frustration in the gas industry is high; information is anything but transparent. The FERC wants the industry to evolve unimpeded, Hoecker insisted. "The proper response of this organization is to get moving." Once GISB reaches the widely respected status of standards groups in other industries, Hoecker predicted, "I see no reason for FERC to be involved at all."

While GISB debates standardization of electronic communications for pipelines, the FERC moves ahead with its real-time information networks (RINs) project for electric companies. GISB's 1996 plan, incidentally, calls for its executive director to report quarterly on the status of the RINs docket.

Depending on who you listen to, RINs developments are something to watch.

Hoecker, apparently quoting Moler, said electric utilities were "leap-frogging" ahead in electronic transaction/information standards.

But many of those at the conference quietly or firmly disagreed, including Randall Couch, GISB board treasurer, of Amoco Production Co., and Mary Jane McCartney, board first vice chair, of Consolidated Edison Co. of New York. "And I'm [an electric company], so I know," McCartney said from the dais.

Later, McCartney added that although the electric industry may be building electronic trading

systems, it isn't as far along as the gas industry when it comes to standards, either from company to company or region to region.

A convergence of the two industries, in electronic trading, is the next natural step, she said. "I don't know if it's the immediate next step," she added. "But we're seeing it in some of these mergers that are taking place, electrics and gas companies getting together. Con Edison is a combo and we're working more closely with our electric energy trading people than we ever did before. Because there are transactions going on where gas is being traded for electricity."

Although gas pipelines have been protective of their proprietary systems, McCartney noted that electronic data interchange (EDI) is a complex way to get around them. "I think in the end, the standards we establish for EDI are going to help the EBBs look more and more alike. So you accomplish both things. But it's not quick. It's not quick." t

Joseph F. Schuler, Jr. is associate editor of PUBLIC UTILITIES FORTNIGHTLY.

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