Standards for Business Practices of Interstate Natural Gas Pipelines

<RULE> DEPARTMENT OF ENERGY <SUBAGY>Federal Energy Regulatory Commission</SUBAGY> <CFR>18 CFR Part 284</CFR> <DEPDOC>[Docket No. RM96-1-043; Order No. 587-AA]</DEPDOC> <SUBJECT>Standards for Business Practices of Interstate Natural Gas Pipelines</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Federal Energy Regulatory Commission. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Federal Energy Regulatory Commission amends its regulations to incorporate by reference, with certain enumerated exceptions, the latest version (Version 4.0) of Standards for Business Practices of Interstate Natural Gas Pipelines adopted by the Wholesale Gas Quadrant (WGQ) of the North American Energy Standards Board (NAESB). NAESB's revisions in this version of the standards are designed to promote greater efficiency and reliability of the natural gas industry's operations and strengthen the cybersecurity protections provided within the standards. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> <E T="03">Effective date:</E> This rule is effective February 7, 2025. <E T="03">Compliance date:</E> Compliance filings required by this final rule are due on February 3, 2025. Compliance with the standards incorporated by reference in this rule is required by August 1, 2025. <E T="03">Incorporation by reference:</E> The incorporation by reference of certain publications listed in this rule is approved by the Director of the Federal Register as of February 7, 2025. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> <FP SOURCE="FP-1">Jerry Chiang (Technical Issues), Office of Energy Policy and Innovation, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, (202) 502-8786</FP> <FP SOURCE="FP-1">Oscar F. Santillana (Technical Issues), Office of Energy Market Regulation, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, (202) 502-6392</FP> <FP SOURCE="FP-1">Carla Pettus (Legal Issues), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, (202) 502-8361</FP> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Table of Contents</HD> <EXTRACT> <GPOTABLE COLS="2" OPTS="L2,tp0,i1" CDEF="s200,12"> <TTITLE> </TTITLE> <CHED H="1"> </CHED> <CHED H="1">Paragraph Nos.</CHED> <ROW> <ENT I="01">I. Overview</ENT> <ENT> 1</ENT> </ROW> <ROW> <ENT I="01">II. Background </ENT> <ENT>3</ENT> </ROW> <ROW> <ENT I="01">III. Discussion </ENT> <ENT>9</ENT> </ROW> <ROW> <ENT I="03">A. The NAESB WGQ Version 4.0 Business Practice Standards </ENT> <ENT>13</ENT> </ROW> <ROW> <ENT I="03">1. WGQ Cybersecurity Related Standards </ENT> <ENT>15</ENT> </ROW> <ROW> <ENT I="03">2. Other Standards Modifications </ENT> <ENT>16</ENT> </ROW> <ROW> <ENT I="03">3. Standards Not Incorporated by Reference </ENT> <ENT>22</ENT> </ROW> <ROW> <ENT I="03">B. Required Compliance Filings </ENT> <ENT>23</ENT> </ROW> <ROW> <ENT I="03">C. Implementation Procedures </ENT> <ENT>24</ENT> </ROW> <ROW> <ENT I="01">IV. Notice of Use of Voluntary Consensus Standards </ENT> <ENT>30</ENT> </ROW> <ROW> <ENT I="01">V. Incorporation by Reference </ENT> <ENT>31</ENT> </ROW> <ROW> <ENT I="01">VI. Information Collection Statement </ENT> <ENT>43</ENT> </ROW> <ROW> <ENT I="01">VII. Environmental Analysis </ENT> <ENT>50</ENT> </ROW> <ROW> <ENT I="01">VIII. Regulatory Flexibility Act </ENT> <ENT>51</ENT> </ROW> <ROW> <ENT I="01">X. Effective Date and Congressional Notification </ENT> <ENT>57</ENT> </ROW> </GPOTABLE> </EXTRACT> <HD SOURCE="HD1">I. Overview</HD> 1. In this final rule, the Federal Energy Regulatory Commission (Commission) amends its regulations at 18 CFR 284.12 to incorporate by reference, with certain enumerated exceptions, <SU>1</SU> <FTREF/> the latest version (WGQ Version 4.0) of business practice standards applicable to natural gas pipelines. On October 2, 2023, NAESB reported to the Commission that it had approved WGQ Version 4.0 to replace the currently incorporated version (Version 3.2) of those business practice standards. On May 21, 2024, NAESB reported a minor correction to WGQ Version 4.0. This final rule requires interstate natural gas pipelines to file compliance filings with the Commission by February 3, 2025, with an effective date of the tariff records of August 1, 2025. <FTNT> <SU>1</SU>  As explained below, we are not incorporating by reference in this final rule the optional model contracts and the eTariff-related standards included in the North American Energy Standards Board (NAESB) Wholesale Gas Quadrant (WGQ) Version 4.0 package of business practice standards. </FTNT> 2. The implementation of these standards will promote greater efficiency and reliability of the natural gas industry's operations and strengthen the cybersecurity protections provided within the standards. <SU>2</SU> <FTREF/> <FTNT> <SU>2</SU>  As explained below, NAESB has developed and adopted, in conjunction with Sandia National Laboratories, a series of business practice standards to strengthen the cybersecurity protections provided within the standards. </FTNT> <HD SOURCE="HD1">II. Background</HD> 3. Since 1996, the Commission has adopted regulations to standardize the business practices and communication methodologies of interstate natural gas pipelines to create a more integrated and efficient pipeline system. These regulations have been promulgated in the Order No. 587 series of orders, <SU>3</SU> <FTREF/> wherein the Commission has incorporated by reference standards for interstate natural gas pipeline business practices and electronic communications that were developed and adopted by NAESB's WGQ. Upon incorporation by reference, this version of the standards will replace the currently incorporated version (Version 3.2) of those business practice standards. <FTNT> <SU>3</SU>  This series of orders began with the Commission's issuance of Order No. 587, <E T="03">Standards for Business Practices of Interstate Natural. Gas Pipelines.</E> 61 FR 39053 (July 26, 1996), FERC Stats. & Regs. ¶ 31,038 (1996) (cross-referenced at 76 FERC ¶ 61,042). </FTNT> 4. On October 2, 2023, NAESB filed a report (Informational Report) informing the Commission that it had adopted and ratified WGQ Version 4.0 of its business practice standards applicable to interstate natural gas pipelines. WGQ Version 4.0 includes business practice standards developed and modified in response to industry requests and directives from the NAESB Board of Directors. This version also includes the standards developed in response to the recommendations of Sandia National Laboratories (Sandia), <SU>4</SU> <FTREF/> which in 2019 issued a DOE-sponsored cybersecurity surety assessment of the NAESB standards. <SU>5</SU> <FTREF/> <FTNT> <SU>4</SU>  Sandia is a multidisciplinary national laboratory and federally funded research and development center for the U.S. Department of Energy's (DOE) National Nuclear Security Administration that supports numerous federal, state, and local government agencies, companies, and organizations. </FTNT> <FTNT> <SU>5</SU>  In April 2017, NAESB announced that Sandia, through funding provided by DOE, would be performing a surety assessment of the NAESB standards. As determined by Sandia and DOE, the purpose of the surety assessment was to analyze cybersecurity elements within the standards, focusing on four areas: (1) the NAESB Certification Program for Accredited Certification Authorities, including the Wholesale Electric Quadrant (WEQ)-012 Public Key Infrastructure Business Practice Standards, the NAESB Accreditation Requirements for Authorized Certificate Authorities, and the Authorized Certification Authority Process; (2) the WEQ Open Access Same-Time Information Systems suite of standards; (3) the WGQ and Retail Markets Quadrant internet Electronic Transport (IET) and Quadrant Electronic Delivery Mechanism (EDM) Related Standards Manual; and (4) a high-level dependency analysis between the gas and electric markets to evaluate the different security paradigms the markets employ. </FTNT> 5. NAESB's Informational Report identifies all the changes made to the WGQ Version 3.2 standards and summarizes the deliberations that led to the changes being made. It also identifies changes to the existing standards that were considered but not adopted due to a lack of consensus or other reasons. 6. On March 21, 2024, the Commission issued a Notice of Proposed Rulemaking proposing to amend its regulations to incorporate by reference, with certain enumerated exceptions, the WGQ Version 4.0 business practice standards applicable to interstate natural gas pipelines. <SU>6</SU> <FTREF/> <FTNT> <SU>6</SU>   <E T="03">Standards for Bus. Pracs. of Interstate Nat. Gas Pipelines,</E> Notice of Proposed Rulemaking, 89 FR 23954 (Apr. 4, 2024), 186 FERC ¶ 61,196 (2024) (WGQ Version 4.0 NOPR). </FTNT> 7. On May 21, 2024, NAESB submitted, and the Commission noticed for comment, an errata filing to update the Informational Report, noting a minor correction to an existing WGQ standard. <SU>7</SU> <FTREF/> The standard supports the communication of invoices between trading partners, including transactions for natural gas transportation and sales and related charges and/or allowances. NAESB states that it adopted and ratified the changes for that standard on March 23, 2020, which became effective on November 3, 2020, but were inadvertently omitted from WGQ Version 3.2 and WGQ Version 4.0. The minor correction revised the Electronic Delivery Mechanism (EDI) X12 Mapping Guidelines for existing WGQ standard 3.4.1—Transportation/Sales Invoice to add code values for five data elements. <SU>8</SU> <FTREF/> <FTNT> <SU>7</SU>   ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 52k characters. 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