Standards versus Services

When does policy become an issue in setting standards?

There are many people in the natural gas industry that have big ideas on how to make our business better – myself included.  There are venues that have been made available, via the North American Energy Standards Board (NAESB) and via the Federal Energy Regulatory Commission (FERC) to present these ideas, vet them properly, and bring them to fruition.

There can be confusion on which venue to use in which situations.

If a pipeline wants to add a new service to the pipeline, then it must first get approval through FERC. Once that service is approved, if the existing NAESB standards for business process implementation do not support the service, then the pipeline can request new standards or modifications to existing standards through NAESB. Often pipelines are able to implement new services without requiring any changes from NAESB.

That seems simple and clear.

What if someone wants to require that all pipelines offer a specific service?  NAESB does not create services, pipelines create services.  And pipelines create services based on FERC policy.  In a case like this, the company needs to present their concept to FERC.  If the FERC determines that the request warrants new policy, that requires pipelines to offer the service, then FERC will issue the new policy. After that, pipelines will make corresponding changes to their pipeline tariffs defining the new service – and – if needed, the pipelines or their service providers will request NAESB to develop or modify standards to support those services.

Policy decisions are made by the FERC.

Not all pipelines offer the same services.  In such a case, NAESB will include language in the standards such as “Where a pipeline offers the service to . . . . then the following standards should be used . . . “ In this manner, pipelines can construct new services and ensure that they remain within the NAESB standards even though their service may be unique or may only be offered by a few pipelines.

Services are decided by the pipelines – the service provider.

NAESB writes standards to implement services and policy. There have been many occasions where the FERC set policy and looked to NAESB to set the corresponding standards so that the policy could be implemented in a consistent manner.  There are also many occasions where a pipeline has offered a new service and submits a request to NAESB to standardize the service.  The benefits of the service-related standards come when additional pipelines want to offer the same or similar services and can utilize the existing standards to accomplish the implementation.

NAESB sets standards for services and policy.

All of these components – services, policy and standards – work in harmony as long as we agree and accept where the lines are drawn and the limits of the scope / responsibility of each organization.