NOPR for NAESB 3.0 Issued July 16, 2015
On Thursday of last week, the FERC (Federal Energy Regulatory Commission) issued a Notice of Proposed Rulemaking (NOPR) proposing the adoption and implementation of Version 3.0 standards of the Whole Gas Quadrant (WGQ) of the North American Energy Standards Board (NAESB). Whew! That’s a mouthful!
This was a new and unusual position for NAESB in that the FERC never took action to adopt NAESB’s WGQ Version 2.1 standards. By adopting the Version 3.0 standards, the adoption will incorporate all changes made for Versions 2.1 and 3.0.
The FERC is proposing these standards be implemented for business on April 1, 2016. This makes a lot of sense and complements the timeline for the FERC’s recent Order 809 deadline of additional intraday cycles for April 1, 2016 (see other blog posts for other components of the Order 809 document). Additionally, this deadline gives everyone a big window of time to make the changes, test thoroughly and move into production for April 1.
So what does Version 3.0 contain?
1 – Moving the nomination deadline from 11:30 a.m. to a later 1 p.m. time.
2 –Addition of another Intraday cycle into the nomination timeline.
3 – Removal of the requirement to use, display and maintain common location codes through the Data Reference Number (DRN) location identifier.
4 – Reporting requirements for Design Capacity and definitions to distinguish Design Capacity from Operating Capacity.
5 – Requirement to post Offers to Purchase Released Capacity
6 – And, of course, the usual maintenance modifications, additions of new elements, additions of new codes.
The good news is that none of these are major game changes to the way we do business today. The other news, however, is that the impact on IT systems can often be deeper than anticipated.
Moving the nomination deadline from 11:30 a.m. to 1 p.m. sounds like a huge win because now shippers and marketers will have the ability to trade gas for an extra 1 ½ hours each day! The other side of that coin, however, is that now pipelines have to shorten their confirmation and scheduling window from 5 hours to 4 hours. Four hours may sound like plenty of time to schedule a pipeline but scheduling is not the only time consumer. The confirmations process may require several iterations between pipelines when the gas flows through multiple interconnects between the wellhead and the burnertip. And for pipelines with a complex scheduling scenario, such as multiple constraints and reticulated, the scheduling process requires multiple iterations; some before the confirmation process and some after. Pipelines that have solved this problem and whittled it down to a short a precise timeline will be able to move to a four hour window easily. Other pipelines that still struggle to meet the five hour window will have to have process changes and system changes to squeeze the process into four hours.
And this is one example. My point is that any of the seemingly clear and simple requirements of NAESB V3.0 and FERC Order 809 may be ones that cause difficult system changes for a pipeline or for a marketer.