wgq gas quality cover letter - final · north american energy standards board 1301 fannin, suite...

NORTH AMERICAN ENERGY STANDARDS BOARD 1301 Fannin, Suite 2350 • Houston, Texas 77002 • Phone: (713) 356-0060 • Fax: (713) 356-0067

email: [email protected] • Web Site Address: www.naesb.org

November 1, 2004

Filed Electronically The Honorable Magalie Salas Secretary Federal Energy Regulatory Commission 888 First Street N.E. Washington, D.C. 20426 RE: Standards for Business Practices of Interstate Natural Gas Pipelines (Docket No. RM96-

1 et al); Regulation of Short-Term Natural Gas Transportation Services and Regulation of Interstate Natural Gas Transportation Services (Docket No. RM 98-10 et al)

Dear Ms. Salas:

The Wholesale Gas Quadrant North American Energy Standards Board (NAESB) standards to implement gas quality reporting requirements have been ratified by its members. NAESB herewith submits this report to the Commission regarding NAESB’s activities from May to October 2004 drafting, amending and ratifying its voluntary standards.

The standards that were adopted by NAESB through member ratification on October 20 are included in the recommendation that is part of the ratification ballot. These standards will be provided as part of version 1.8 when that version is completed, but are also being provided now for the Commission’s information.

NAESB’s Wholesale Gas Quadrant (WGQ) Executive Committee approved a package of modifications to NAESB standards that included one modification to an existing standard, the creation of a new principle and the creation of four new standards. NAESB members approved the standards in balloting that closed October 20. The NAESB meetings where these standards were discussed and adopted took place from May to October 2004. The minutes of these meetings are provided as enclosures, which include the voting records. The ratification ballot and member ratification voting record results are also included as enclosures. Four sets of comments were provided during the comment period and were considered during the Executive Committee action. The September Executive Committee meeting where the standards were considered and adopted was transcribed. The transcripts are available for purchase from the transcription service and will be made available to the Commission at no charge for internal use only.

The report is being filed electronically in Adobe Acrobat® Print Document Format (.pdf), and each enclosure is bookmarked separately. All of the documents are also available on the NAESB web site (www.naesb.org). Please feel free to call me at (713) 356-0060 or refer to the NAESB website (www.naesb.org) should you have any questions or need additional information regarding the NAESB WGQ standards that implement gas quality reporting requirements.

NORTH AMERICAN ENERGY STANDARDS BOARD 1301 Fannin, Suite 2350 • Houston, Texas 77002 • Phone: (713) 356-0060 • Fax: (713) 356-0067

email: [email protected] • Web Site Address: www.naesb.org

November 1, 2004

Respectfully submitted,

Rae McQuade Ms. Rae McQuade Executive Director & COO

North American Energy Standards Board cc without appendices: Chairman Patrick H. Wood III, Federal Energy Regulatory Commission Commissioner Nora Mead Brownell, Federal Energy Regulatory Commission Commissioner Joseph Kelliher, Federal Energy Regulatory Commission Commissioner Suedeen Kelly, Federal Energy Regulatory Commission Michael D. Desselle, NAESB Chairman and CEO William P. Boswell, NAESB General Counsel Appendices (all available publicly on the NAESB web site – www.naesb.org: (1) Relevant NAESB Executive Committee Meeting Minutes and Subcommittee meetings

and Voting Records (2) Ratification Ballot (3) Ratification Ballot Results (4) Comments

UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION

REPORT OF THE NORTH AMERICAN ENERGY STANDARDS BOARD

ON GAS QUALITY REPORTING STANDARDS Standards for Business Practices of Interstate Natural Gas Pipelines (Docket No. RM96-1 et al); Regulation of Short-Term Natural Gas Transportation Services and Regulation of Interstate Natural Gas Transportation Services (Docket No. RM 98-10 et al)

The North American Energy Standards Board ("NAESB") is voluntarily submitting this report in accordance with the above referenced dockets. The report includes a list of the standards adopted by the Wholesale Gas Quadrant of the North American Energy Standards Board (NAESB), and several enclosures that document the efforts undertaken to define the standards, modifications to existing standards and adopt the standards that would pertain to gas quality reporting for the wholesale gas market.

Several enclosures provide supporting documentation. The enclosures are:

Appendix 1 NAESB Wholesale Gas Quadrant Subcommittee and Executive Committee meeting minutes and voting records related to gas quality reporting

Appendix 2 Ratification Ballot Appendix 3 Ratification Ballot Results Appendix 4 Comments on the standards considered by the Executive Committee

This report is intended solely as a status report from NAESB regarding the development of wholesale gas quality reporting standards. NAESB does not advocate that the Commission take a particular position on any of the issues presented.

STANDARDS RATIFIED BY THE NAESB WHOLESALE GAS QUADRANT MEMBERSHIP ON

October 20, 2004 Modified Standard: 4.3.23 Transportation Service Providers should establish an Informational Postings Web site

accessible via the Internet. The subcategories and labels for the categories of Informational Postings should be as follows:

CATEGORIES SUBCATEGORIES

Capacity Operationally Available Unsubscribed

Energy Affiliate Info Capacity Allocation Log (when applicable) Employee Transfers Names and Addresses Potential Mergers Shared Facilities

Gas Quality Index of Customers Non-discrimination Rqts Discounts

Emergency Deviations Implementation Procedures Information Disclosure Tariff Discretionary Actions

Notices Critical

Non-Critical Planned Service Outage

Organizational Charts Posted Imbalances Tariff Title Page

Table of Contents Preliminary Statement Map Currently Effective Rates Rate Schedules General Terms and Conditions Form of Service Agreement Entire Tariff Sheet Index

Transactional Reporting

These categories and labels should appear in the order specified above and before any others.

New Principle: 4.1.p1 For any location(s), the Transportation Service Provider (TSP) may, at its discretion,

elect to provide gas quality information in addition to that specified in NAESB WGQ Standard No. [S2]. The TSP may choose how to provide the information.

New Standard: 4.3.s1 A Transportation Service Provider (TSP) should provide on its Informational Postings

Web Site a link to the natural gas quality tariff provisions (or where no tariff exists in the general terms and conditions) or a simple reference guide to such information.

New Standard: 4.3.s2 The Transportation Service Provider (TSP) should provide on its Informational Postings

Web Site daily average gas quality information for prior gas day(s), to the extent available, for location(s) that are representative of mainline gas flow. The information available for the identified location(s) should be provided in a downloadable format. Information should be reported in units as specified in the tariff or general terms and conditions. In any event, compliance with gas quality requirements is in accordance with the TSP’s tariff or general terms and conditions.

The following are examples of gas quality attributes that could be included in the posting for the applicable Gas Day(s) and location(s): • Heating Value

• Hydrocarbon Components, % of C1 – Cnn, as used in determining Heating Value

• Specific Gravity

• Water

• Nitrogen

• Carbon Dioxide

• Oxygen

• Hydrogen

• Helium

• Total Sulfur

• Hydrogen Sulfide

• Carbonyl Sulfide

• Mercaptans

• Mercury and/or any other contaminants being measured

• Other pertinent gas quality information that is specified in the TSP’s tariff or the general terms and conditions.

New Standard: 4.3.s3 Data provided pursuant to NAESB WGQ Standard No. [S2] should be made available on

the Transportation Service Provider’s Web Site for the most recent three-month period. Beyond the initial three-month period, the historical data should be made available offline in accordance with regulatory requirements.

New Standard: 4.3.s4 Data provided pursuant to NAESB WGQ Standard No. [S2] should be provided in a

tabular downloadable file to be described by the Transportation Service Provider. The first row of the file should contain the column headers.

Appendix 1 Minutes

Minutes and voting records for the following wholesale gas quadrant subcommittee and Executive Committee meetings are contained in Appendix 1:

Business Practices Subcommittee

5/27/2004 6/15-16/2004 7/07-08/2004 8/04-05/2004 8/11/2004

Information Requirements & Technical Subcommittees 8/11/2004

Executive Committee 9/16/2004

North American Energy Standards Board 1301 Fannin, Suite 2350, Houston, Texas 77002 Phone: (713) 356-0060, Fax: (713) 356-0067, E-mail: [email protected]

Home Page: www.naesb.org

WGQ BPS Subcommittee Conference Call – Final Minutes, May 27, 2004 Page 1

via posting

TO: NAESB WGQ Business Practices Subcommittee Participants and Posting for Interested Parties

FROM: James Cargas, NAESB Deputy Director

RE: WGQ Business Practices Subcommittee Conference Call Minutes – May 27, 2004

DATE: June 7, 2004

NAESB Wholesale Gas Quadrant Business Practices Subcommittee Conference Call May 27, 2004 – 10:00 a.m. to 12:00 p.m. Central

Final Minutes

1. Welcome

Mr. Novak opened the meeting and the participants introduced themselves. Mr. Cargas gave the antitrust advice. The draft agenda was adopted by consensus without any modifications.

2. High Level Discussion of Gas Quality Work Papers and R03035

Mr. Novak opened the discussion by framing the goals of today’s meeting as setting the process that the Business Practices Subcommittee (BPS) will follow, identifying possible work papers, and setting the schedule of future meetings. The merits of Request #R03035 will not be discussed today.

Part A of R03035, reads, “Establish web-based reports for tracking all physical and chemical properties of natural gas defined in pipeline tariffs, including timelines for reporting.” Mr. Novak then led a discussion of possible topic areas this request could implicate.

• Educational Process

Mr. Novak suggested the BPS begin its first meeting on June 15-16 with Ms. Dona Gussow’s presentation to the Board since it offered a good overview of the details, objectives, and parameters of the request. Ms. Van Pelt noted that this approach was very successful at the Gas and Electric Coordination Task Force. It was decided not to solicit a presentation by the Natural Gas Council (NGC) since their gas quality activities were very technical in nature and not related to web-based reporting. Someone from the American Gas Association (AGA) would be helpful since AGA’s Publication 4A sets forth gas quality ranges for pipeline natural gas. Ms. Gussow noted that the pipelines have great expertise that needs to be engaged in this effort.

It was concluded that a general call for presentations would be made with a June 11 deadline.

• Litmus Test / Scope Issues

Mr. Novak made it clear that BPS needs to focus on Part A of the request and not be distracted by Parts B and C. Ms. Gussow clarified that pipeline tariffs have different formulas, gas quality standards, and definitions, and that BPS will not be standardizing them. Rather, BPS will only compile these diverse elements into a more user-friendly web-based format.

• EPA Environmental Alert

Ms. Gussow led a discussion of the June 2002 EPA Environmental Alert posted for this meeting and how EPA is setting pipelines gas quality standards (sulfur) at odds with those in FERC approved tariffs. Mr. Novak suggested that state agencies may also be promulgating incremental




and/or differing gas quality standards. It was concluded that gas quality standards not contained in interstate pipeline tariffs are outside the scope of BPS’s assignment.

• Range of Gas Quality Entries

Ms. Gussow explained her efforts to compile the gas quality specifications of the 14 pipelines Florida Power & Light (EPL) holds capacity on. Besides the various definitions of constituents, she found that not all pipelines monitor the same constituents, e.g., carbonyl sulfite. BPS will need to create place holders to allow for this variability. The challenge will come on parameters like the Wobbe Index, where the industry has multiple definitions of this parameter.

• Method of Reporting Information

BPS will need to consider the various formats available for reporting and displaying the information, e.g., EDI, XML, flat files, according to Mr. Novak. Ms. Gussow suggested a format that allows customers to pull information on a regular basis would be beneficial if paired with her system’s internal alarms. This would allow FPL to protect equipment before gas arrives at facility.

Mr. Conner noted that the cost implications should be considered. As a local distribution company (LDC) he feels he should not have to pay for the special needs of generators. Mr. Novak and Mr. Buccigross pointed out that who should pay for monitoring and what payment mechanism is used are policy decisions for the regulators to decide. NAESB should, however, consider the cost effectiveness of the various technologies available, Mr. Novak concluded.

• Timing Issues

Mr. Novak read Part A, which states, “including timelines for reporting,” and asked Ms. Gussow, the requester for clarification. Ms. Gussow noted that pipelines monitor different constituents at different intervals and this frequency of sampling should be included in the information displayed. The interval or frequency in the tariff is what BPS should look at. Mr. Novak noted that the timeliness of the data displayed, i.e., the length of time to post the information, may also be something BPS looks into.

3. Upcoming Meetings

The following meeting dates were set by consensus:

• June 15-16 in Houston at NAESB’s Offices. The June 16 time was changed to 8am to 3pm.

• July 7-8 in Houston. Panhandle Eastern may host this meeting. Otherwise, it will be held at the NAESB Offices. Times set at 9am to 5pm on July 7, and 8am to 3pm on July 8.

• Aug. 4-5 in Washington, DC. AGA may be able to host this meeting.

• Sept. 1-2 in Juno Beach, Florida hosted by FPL. Since this is hurricane season in Florida, therefore, Phoenix and West Palm Beach will also be considered.

• Oct. 14-15 in Buffalo, NY. National Fuel may host this meeting.

4. Other Business

Mr. Gussow inquired about the participation of other quadrants. Mr. Buccigross noted that all meetings are open and members of other quadrants will begin attending once the meeting dates are broadcasted to them.




5. Action Items

• Mr. Cargas (NAESB Office) will send out a call for presentations to be made a the first meeting on June 14-15, with a June 11 deadline.

• Mr. Cargas (NAESB Office) will distribute meeting dates to broadest possible NAESB list.

• Ms. Van Pelt will approach AGA for a presenter on their Publication 4A at the June 15-16 meeting in Houston. She will also inquire about AGA sharing this document and whether it can be posted on the NAESB web site without infringing on any copyrights.

6. Adjourn

The meeting adjourned at 11:20 p.m. Central.

7. Attendance Attendee: Organization:

1 Jeff Bittle Texas Gas 2 Jim Buccigross Group 8760, Inc. 3 Kathryn Burch Duke Energy Gas Transmission 4 James Cargas NAESB 5 Jennifer Chen SunGard Energy 6 Pete Connor NiSource 7 Valerie Crockett Tennessee Valley Authority 8 Kelly Daly Arizona Public Service Company 9 Andrew Dotterweich Consumers Energy

10 Mark Gracey Tennessee Gas Pipeline 11 Dona Gussow Florida Power & Light 12 Sheri Heslington Dominion 13 Iris King Dominion Transmission Inc 14 Paul Love NGPL 15 Prince McDougal Southern Natural Gas 16 Billy Miller Alpine 17 Michael Novak National Fuel Gas Distribution Co. 18 Maria Onufrow SunGard Engery 19 Marjorie Perlman Energy East 20 Micki Schmitz Northern Natural Gas 21 Donna Scott Transwestern Pipeline Company 22 Kim Van Pelt Panhandle Eastern Pipeline 23 Brian White NiSource Pipelines 24 Michelle Willis Center Point Energy



WGQ Business Practices Subcommittee Final Minutes – June 15-16, 2004 Page 1 of 7

Via email and posting

TO: Interested Industry Participants

FROM: Todd Oncken, Deputy Director

RE: WGQ Business Practices Subcommittee Final Minutes – June 15-16, 2004

DATE: June 17, 2004

NORTH AMERICAN ENERGY STANDARDS BOARD WGQ Business Practices Subcommittee Meeting

June 15-16, 2004 in Houston, TX hosted by NAESB

1. Administrative

Mr. Novak, Ms. Van Pelt and Ms. Burnett chaired the meeting. Mr. Oncken gave the antitrust advice. Participants introduced themselves. Mr. Bray moved, seconded by Mr. Griffith, to adopt the agenda as posted. The motion passed unanimously. The minutes from the May 27, 2004 conference call were reviewed. Mr. Hebenstreit moved, seconded by Mr. Griffith, to adopt the May 27, 2004 minutes without modification. The motion passed unanimously.

The chairs reminded participants that deliberations would be limited to the reporting aspect of Request R03035. As an example, Mr. Novak said that while discussing whether sulfur should be one of the elements included in the report would be appropriate, discussing limits on sulfur content would be inappropriate.

2. Presentations

Presentations were given by Ms. Gussow, Ms. Deegan, Mr. Griffith and Mr. Quraishi. Presentation materials from Ms. Gussow, Ms. Deegan and Mr. Griffith are available on the NAESB website (http://www.naesb.org/wgq/bps.asp). Each presentation included a question and answer session.

Ms. Gussow: Ms. Gussow’s presentation included two slide shows, FP&L Gas Quality Standardization Request to NAESB R03035 Presentation & Introductory Remarks, Facts and Opinions. Highlights of Ms. Gussow’s presentation included:

o Reports are needed because power generators have a need to know the chemical characteristics and physical properties for all fuels being burned at their facilities for operational reasons, collection and tracking of data for analysis or fuel choice decisions and for regulatory and emissions reporting purposes.

o Investor owned, regulated electric utilities have due diligence reporting obligations requiring review, understanding, and/or verification of processes directly impacting fuel expenses.

o End users do not have the ability to verify heating value and volume of gas supplied or delivered, two values which impact their bill.

o Fuel quality variability can lead to mechanical failures or excess emissions necessitating reduction in power output or removal of the unit from service.

o Natural gas liquids diminish the value of natural gas as a fuel.

o Contaminants, such as sulfur, can create burdensome emissions or operational problems.




o FPL views Request R03035 as a complete request, not three distinct parts of a request.

There was extensive discussion of Ms. Gussow’s presentation. It was noted that information on R03035B and R03035C was presented because the BPS chairs requested the FPL presentation to the Board be given in toto. Specific aspects of FPL’s measurement procedures were discussed. Ms. Gussow explained that FPL does not have custom meters for each of its facilities, but does verify pipeline data against a meter on the generating facilities and adhere to a due diligence program to monitor the pipeline calibration process. Additionally, discussion revealed that while there are special concerns with combustion turbine generators, gas quality is an overall concern because of the due diligence and emissions reporting requirements.

Ms. Gussow stated the gas quality information available is inconsistent across the country and the pipelines that serve FPL Energy’s generation facilities. For example, total sulfur is defined differently in different tariffs. Additionally, she noted availability of the data varies as well. Ms. Gussow stated that standard gas quality reports, in a user-friendly format, would assist end users in fulfilling their data requirements and allow an organization with facilities in diverse locations to develop an organization-wide data retrieval policy. Further, Ms. Gussow stated that downstream gas quality data would assist generators in making fuel decisions.

Discussion revealed that gas quality concerns are not unique to generators, but that other industry segments, such as the LDCs, might approach the concerns differently. For example, Ms Chezar stated that most LDCs have meters at their delivery points. Another LDC approach can be seen through Ms. Deegan’s presentation (following).

Ms. Deegan: Ms. Deegan’s presentation, ‘Natural Gas Interchangeability – Integrating supply diversity and end-use predictability,’ focused on the gas interchangeability solutions developed during the certification process for the Dominion Cove Point LNG facility. Ms. Deegan stated that the introduction of LNG at a higher Btu could cause the following potential changes combustion: thermal effects, lifting, flashback, yellow-tipping and incomplete combustion. Ms. Deegan defined interchangeability as the extent to which a substitute gas can replace the gas normally used and produce similar combustion characteristics. Additionally, Ms. Deegan stated that interchangeability was a local problem and required a local solution.

During discussion on her presentation, Ms. Deegan stated the data received for each gate station is not consistent, but the aspects of the data are based on particular needs. Ms. Deegan said it was important to have the flexibility to recognize that not all data is relevant at all locations. It was noted that any proposed standards that set reporting requirements below those contained in the Cove Point settlement would not impact the settlement, since NAESB standards were minimums and organizations could exceed the performance required by the standards.

Mr. Griffith: Mr. Griffith’s presentation, Interstate Pipeline Gas Quality Primer, reviewed the basis for gas quality specifications, gas quality data and gas quality specifications/applicability. Mr. Griffith stated that gas quality specifications have been developed based on operational safety, operational efficiency, and deliberate trade-offs between economics and requirements of production, transportation and end-use parameters. Mr. Griffith noted that not all gas quality data is available and/or monitored daily. Mr. Griffith’s presentation contained the following conclusions:

o Understanding the context of quality information is critical for its use.

o Not all gas quality information is captured at all points.

o Gas quality at any point is a mix of input qualities/quantities and existing line pack.




o Real-time information is probably not feasible for posting.

o Daily data (if electronic) may be the best available information, but would be blended information and would not necessarily be reflective of future flows.

During discussion on the presentation it was noted that type of meter was a function of location, size of interconnection, and mutual agreement between the two interconnected parties. Mr. Griffith stated pipeline gas quality requirements develop over time and the LDCs receiving gas from pipelines are getting gas that meets their requirements. For example, he said most pipelines have developed specific tariff requirements based on significant supply quality differences, such as Btu and hydrocarbon level. LDC representatives noted that LDCs receive different qualities of gas from different pipelines, but could be concerned with gas quality at specific locations. Ms. Deegan added that when considering supply variability, relevant factors include time of variation, length of variation, and load at time of variation.

Mr. Quraishi: Mr. Quraishi presented information on the American Gas Association and Natural Gas Council efforts concerning natural gas quality and interchangeability. Mr. Quraishi discussed AGA Report 4A, first published in 1971 and revised in 2001, which makes no particular recommendations but identifies natural gas properties that should be monitored. (Information on obtaining AGA Report 4A can be found on the AGA website.) He stated that historically gas supply was relatively constant, so gas quality remained relatively constant. However, he stated the recent introduction of new supply sources, such as coal-bed methane and LNG, has introduced gas quality concerns since each of the sources has different qualities and heating values.

To address the growing concern, Mr. Quraishi stated the Natural Gas Council took the lead in working with the FERC on gas quality issues. He stated the Natural Gas Council identified two issues to be discussed – hydrocarbon dewpoint and gas interchangeability – and established the NGC Hydrocarbon Dewpoint Task Group (HDP TG) and NGC Interchangeability Task Group (ITG). He said a whitepaper is expected from the HDP TG would be forthcoming in approximately two months. Mr. Quraishi encouraged participation in both task groups from any interested industry participants. The impact of NGC efforts on the reporting standards being developed by the subcommittee was not determined. However, Ms. Gussow suggested the reporting standards to be developed by the subcommittee could be modified if the NGC work produced different gas quality specifications or measurements.

Grid Integration Project Gas Quality Task Force Report: Mr. Bray provided a brief background for the Grid Integration Project Gas Quality Task Force Report, noting that gas quality was one area the stakeholder group addressed nearly ten years ago. Mr. Bray stated the report is very informative and would provide good background information on gas quality issues. The report is available on the NAESB website.

3. Evaluation of NAESB WGQ Request R03035A for Determination of Work Plan Items

The subcommittee discussed and developed the work plan for Request R03035A. Ms. Van Pelt noted that inclusion of a work plan item did not necessarily mean standards would be created related to that item. The subcommittee participated in a brainstorming session that resulted in the following work plan:

1. Natural Gas Quality Specification Sheet1

2. Historical Natural Gas Quality Reports 1 Items 1-5 of the work plan were based on a workpaper submitted by Ms. Gussow titled, ‘Scope of BPS NatGas Quality & Measurement Reporting Project.’




3. Real Time Natural Gas Quality Measurement Datastream

4. Pipeline Maps with Locations of Natural Gas Quality

5. MSDS (Material Safety Data Sheet)

6. Applicability of NAESB Measured Volume Audit Statement (WGQ Standard 2.4.6)

In addition to the six work plan items, the following six questions were developed which should be addressed during discussion of each item:

a. What should we report?

b. Why (or why not) should the data be reported?

c. When should data be reported?

d. Who should be able to access the report?

e. How should data be reported?

f. Where should the data be reported?

The subcommittee agreed to address the items sequentially, noting that some items would obviously require more time than others.

4. Action on Work Plan

Item 1: Natural Gas Quality Specification Sheet

Several approaches for item 1 were discussed. Ms. Gussow reviewed a preliminary specifications list (Natural Gas Specs Sheet, page 3). It was decided that creating an exhaustive list of possible gas components based on tariff requirements (both receipts and deliveries) was the appropriate method for developing the report. See homework below. Ms. Gussow’s document will serve as a strawman for the information to be contained in the report. Additionally, participants agreed the content of the matrix would be a translation of tariff information into a comprehensive, more user-friendly format. There was discussion but not decision on whether elements beyond tariff requirements would be included and whether pipelines would have the option of posting data gathered beyond the tariff requirements. Linking a specific characteristic to a particular tariff section, or including a column showing tariff sheet number or tariff section was also discussed.

Mr. Young expressed concern about possible misrepresentations created by summarizations of tariff language. He stated numbers could be misleading without context. Mr. Novak suggested Mr. Young bring an example of his concern for discussion at the next meeting.

While specific implementation was not discussed, obvious choices include posting of the entire matrix with values shown for required elements or posting only the required elements. Mr. Gwilliam proposed following the traditional NAESB WGQ format of identifying the types of data to be reported and creating a ‘look and feel’ for the report, rather than developing a specific format.

Item 2: Historical Natural Gas Quality Reports

Participants agreed this item would address the report retention and accessibility requirements for reports generated pursuant to item 3 on a proactive basis. Ms. Gussow suggested that this portion of the request was not for additional formatted webpages, but rather that the documents should be retained on websites for a reasonable amount of time to allow interested parties to consistently collect the data. Ms. Davis noted there are FERC document retention




requirements for interstate pipelines. Given its reliance on item 3, discussion on item 2 was deferred until a determination is made on item 3.

Item 3: Real Time Natural Gas Quality Measurement Datastream

Discussion of item 3 was deferred until the next meeting due to time constraints.

Item 4: Pipeline Maps with Locations of Natural Gas Quality

Pipeline representatives expressed homeland security and feasibility concerns, especially for pipelines with hundreds of points. Ms. Gussow suggested locating the pipeline maps in the password protected section of the websites would address security concerns. However, Ms. Gussow agreed that while the map format was desirable, as long as specific information was made available on measurement locations the map was not necessary.

During this discussion, the number of reporting locations was discussed. Ms. Gussow suggested the information should be provided at any location the pipeline uses to test gas quality, and then the user of the report could identify the pertinent locations. Additionally, Ms. Gussow suggested that the pipeline provide information on where measurements are taken and where it would be feasible to provide the information. Ms. Davis suggested the pipelines could, at their discretion, identify five representative points for reporting. Additionally, Ms. Davis suggested the gas quality information should be made available to point operators, not shippers or ultimate end users. Ms. Gussow was amenable to the suggestion of representative points. Ms. Burnett suggested the number of proxy points could be determined based on length, location of receipt and delivery points, or some other criteria. Mr. Zavodnick suggested a translation of generation fuel-switching reaction times to distance from delivery point could provide valuable information to help determine appropriate proxy points.

It was noted that the quality of gas changes as it flows through the pipeline due to blending, so the measurements 50 miles upstream of a delivery point would not necessarily reflect the quality of gas delivered. Mr. Rogers said that differential would be particular troublesome if an end user adjusted equipment based on the 50 mile measurement and the actual delivery had different characteristics. Mr. Rogers stated the only accurate quality measurement would be a measurement at your specific delivery point.

Item 5: MSDS (Material Safety Data Sheet)

Ms. Gussow stated there is a need to have consistent safety information for the gas entering end use facilities. Mr. Schisler suggested the end user would be responsible for providing the information since it holds title to the gas and use occurred at its facility. Ms. Gussow suggested the pipelines should be responsible for the MSDS since the characteristics of the gas are typically changed while the pipeline has custody of the gas during transportation. Ms. Burnett stated that preparation of an MSDS was the responsibility of the end user, but since the document is not updated on a frequent basis, it would be more appropriate for the end user to address data needs with the pipeline on an individual basis. The subcommittee agreed that while the information contained in an MSDS was important, development and posting of the document was ancillary to gas quality reporting and would not be pursued.

5. Upcoming Meetings

July 7-8, 2004 Panhandle Eastern Pipe Line, Houston, TX August 4-5, 2004 AGA, Washington D.C. September 1-2, 2004 TBD, Salt Lake City, UT October 14-15, 2004 National Fuel Gas Distribution, Buffalo, NY




To prepare for additional discussion of item 1, participants should submit an amended matrix containing information on different gas quality tariff requirements to the NAESB Office for posting by Thursday, July 1. Additionally, participants should consider which characteristics lend themselves to minimum value/maximum value display and whether (and how) tariff references should be included. Additionally, Mr. Griffith suggested participants develop alternative language for item 3.

6. Adjourn

The meeting adjourned at 2:33 p.m. Central.

7. Attendance

Name Organization Day One Day Two Ed Anderson RJ Rudden In Person In Person Mariam Arnaout American Gas Association Phone Mike Bray Shell Gas Transmission In Person In Person Curt Brechtel Arizona Public Service Phone Kelly Brooks Williston Basin Phone Phone Kathryn Burch Duke Energy Gas Transmission In Person In Person Christopher Burden Williams Gas Pipeline In Person In Person Tina Burnett The Boeing Company In Person Jennifer Chen SunGard Energy Systems In Person Dolores Chezar KeySpan Energy In Person In Person Craig Colombo Dominion Resources Phone Phone Pete Connor NiSource Phone Phone Cynthia Corcoran Enbridge Pipeline In Person Valerie Crockett Tennessee Valley Authority In Person In Person Dale Davis Williams Gas Pipeline In Person In Person Jennifer Deegan Washington Gas Light In Person In Person Andrew Dotterweich Consumers Energy Phone Lisa Fitzgerald Columbia Gas Transmission In Person In Person Kirstin Gibbs Process Gas Consumers Phone Phone Mark Gracey Tennessee Gas Pipeline In Person Bill Griffith El Paso Western Pipelines In Person In Person Bill Grygar Panhandle Eastern Pipeline In Person In Person Dona Gussow Florida Power & Light In Person In Person Tom Gwilliam Iroquois Gas Transmission System In Person In Person Scott Hansen Questar Pipeline Co. In Person In Person Bill Hebenstreit El Paso Production Company In Person In Person Judy Hickman Columbia Gas In Person In Person Brad Holmes Transwestern Pipeline In Person In Person Rick Ishikawa SoCalGas In Person In Person Joe Kardas National Fuel Supply Corp. In Person In Person Iris King Dominion Transmission, Inc. In Person In Person Regis Klingler Consumers Energy Phone Toby Kuehl Northern Natural Gas In Person In Person Prince McDougal Southern Natural Gas Phone Phone Morris Nichols Center Point Energy In Person In Person




Mike Novak National Fuel Gas Distribution In Person In Person Todd Oncken NAESB In Person In Person Ali Quraishi AGA In Person In Person Jesse Rogers Trunkline Gas Transmission In Person In Person Richard Rudden RJ Rudden In Person In Person Keith Sappenfield Encana Corporation Phone Mike Schisler NGPL In Person In Person Don Sytsma RJ Rudden In Person In Person Kim Van Pelt Panhandle Eastern Pipeline In Person In Person Brian White NiSource Pipelines In Person In Person Michelle Willis CenterPoint In Person In Person Randy Young Gulf South Pipeline In Person In Person Steve Zavodnick Baltimore Gas & Electric Phone Phone



WGQ Business Practices Subcommittee Final Minutes – July 7-8, 2004 Page 1 of 8

Via email and posting

TO: Interested Industry Participants


RE: WGQ Business Practices Subcommittee Final Minutes – July 7-8, 2004

DATE: July 16, 2004 NORTH AMERICAN ENERGY STANDARDS BOARD

WHOLESALE GAS QUADRANT BUSINESS PRACTICES SUBCOMMITTEE

Hosted by NAESB in Houston, TX July 7-8, 2004

1. Administrative

Ms. Van Pelt called the meeting to order and welcomed participants. Mr. Oncken gave the antitrust advice. Participants introduced themselves. Mr. Love moved, seconded by Ms. Scott, to adopt the agenda as posted. The motion passed unanimously.

The draft minutes from the June 15-16, 2004 meeting were reviewed and minor changes were offered. The modified draft minutes were adopted unanimously.

2. Natural Gas Quality Specification Sheet (Work Plan Item 1)

Participants submitted company-specific Natural Gas Quality Specification Sheets as a work assignment from the last meeting. Approximately 50 work papers were submitted. The subcommittee discussed how to move forward with the project, and whether it would be appropriate to compile a master document containing all responses. Mr. Novak suggested the NAESB Office compile the matrix noting whether the item was contained in each of the work papers. Concern was expressed that there were cases where both customers and a pipeline submitted responses, and it was suggested that preference should be shown for the pipeline filing since they were the most knowledgeable entity regarding their tariff requirements. While it was ultimately determined that compilation of the compiled matrix was not required, several pipelines proposed to file revised sheets that reflect additional understanding gained during the meeting.

Some concern was expressed with the concept of creating a comprehensive list. For example, several parties commented on how the report would be implemented when individual tariffs contained only a portion of the items contained in the comprehensive list. Mr. Novak stated the format would contain a placeholder for reporting the data, if available. Additionally, Mr. Love noted that some pipelines have different gas quality requirements that are state, contract or facility specific.

Beyond determining which specifications should be included in the report, Mr. Novak stated the request also asks that units be specified. Mr. Novak suggested the subcommittee consider whether disclosure of units was appropriate; or, whether it would be more appropriate to standardize the units. Mr. Love opposed standardizing the units of measure, because those units are contained in the individual tariffs and impact pipeline operations.

As an alternative to the Natural Gas Quality Specification Sheet, Ms. Van Pelt proposed a menu item on the informational postings site that would contain a link directly to the tariff sheets that contain gas quality information. The proposal was generally supported by the pipeline segment representatives. Mr. Young supported the proposal, adding that the standard should




not contain specific implementations but instead identify the information to be provided and give the pipelines flexibility in providing the information. Mr. Schisler added that some tariff language is not quantifiable in tabular format. He expressed concern that gas quality information in a tabular format could be misleading. Ms. Gussow opposed the proposal, stating that tariff language is not consistent and easily understandable for operational personnel such as engineers and chemists. Instead, Ms. Gussow supported a format that was easily understandable by operational personnel. As an alternative, Ms. Gussow suggested pipelines file revised tariffs containing gas quality information in a tabular format. As a compromise, Ms. Crockett suggested a table to include links to specific information where pipelines felt the information was not quantifiable in a tabular format. Ms. Gussow added that notes are commonly used in technical documents and spec sheets.

Ms. Gussow moved, seconded by Ms. Crockett, Proposed Standard S1 as follows:

Transportation Service Providers should adopt the format provided in the NATGAS QUALITY SPECIFICATIONS LIST with each pipeline providing their specific tariff quality specifications. The format would include a table that would list the following information:

• a disclaimer that states the specifications list is a summary and for specific quality information the tariff should be referenced,

the table would include

• property or characteristic,

• symbol,

• measurement units(s) or condition,

• analytical test method,

• value…minimum value, maximum value, (or a single value column with appropriate mathematical notation of whether the value is a minimum or maximum or range),

• indicator of whether it applies to the receipt side or delivery side or both,

• a link to the tariff page where details may be provided on that characteristic or property,

• and any appropriate notes following the table.

During discussion of the motion it was noted that this standard would apply only to the information required by tariffs. The proposed standard was modified during discussion. Ms. Gussow noted the proposed standard was consistent with the request and stated the format would be more understandable for the intended audience. Ms. Gussow encouraged pipelines to report information beyond what is required in the tariff. Concerns about presenting the information in a tabular format were reiterated. Analytical testing method was given as an example of information that could not be presented in a table. Mr. Schisler stated the impact of the potential for misrepresentation could be large since businesses would likely be making decisions based on the data. Mr. Schisler suggested the group focus on the best way to present the information, and stated a tabular format was not the best presentation. Mr. Schisler stated the most efficient representation of the information is a link in the main menu structure and it links directly to the pages. Mr. Love added that including notes or references was not an adequate solution, because the language required to provide context for the table




could be more lengthy than the tariff language. Ms. Gussow responded that the possibility of misrepresentation should be limited since the pipelines would be interpreting their own tariffs.

Much of the discussion on the motion focused on how the elements would be addressed in cases where a particular pipeline tariff does not support such information. Mr. Novak noted that the customary convention is to post only the data that is available, so there would not be instances where only 10 pieces of data were posted against a list of 25 characteristics. Participants discussed, for instances when a pipeline has different maximums and minimums at different locations, whether it would be appropriate to make several postings, or instead use the system high and system low. Ms. Gussow suggested multiple postings, or including specific information in the notes for the posting.

There was also discussion on the specific characteristics to be reported. Ms. Davis stated that the characteristics should be named carefully, since each characteristic had a different calculation and meaning. For example, it was noted that High Heating Value (HHV) and maximum BTU are not synonymous. Ms. Davis suggested changing the characteristic to heat content, shown in BTU. Ms. Gussow stated that BTU does not necessarily mean HHV or Low Heating Value (LHV), but those terms have a definite meaning in chemistry. Ms. Gussow stated HHV and LHV were included because of discussions in the interchangeability tasks forces about the computation of a modified WOBBE index. There was no determination on this issue.

The revised Gussow motion reads as follows:

Transportation Service Providers should provide natural gas quality tariff (or general terms and conditions) information in a table, as applicable:

• property or characteristic,

• property or characteristic symbol,

• measurement unit(s) or condition,

• analytical test method,

• value(s) (minimum, maximum, range),

• indicator of whether the value for the characteristic or property applies to the receipt location(s) or delivery location(s) or both,

• a link to where details may be provided on that characteristic or property, and

• any notes or disclaimers.

The motion passed on a balanced vote. Segment Votes Cast Balanced Vote YES NO TOTAL YES NO TOTAL Producers 0 0 0 0 0 0 Pipelines 1 14 15 0.133333 1.866667 2 LDCs 3 0 3 2 0 2 Services 0 0 0 0 0 0 End Users 2 0 2 2 0 2 Total 6 14 20 4.133333 1.866667 6




Ms. Van Pelt stated NAESB WGQ Standard 4.3.23 should be modified to reflect the posting of gas quality information. After limited discussion, Mr. Bray moved, seconded by Mr. Kuehl, to include to a category for ‘Gas Quality’ between Energy Affiliate Info and Index of Customers. The motion passed. Segment Votes Cast Balanced Vote YES NO TOTAL YES NO TOTAL Producers 0 0 0 0 0 0 Pipelines 10 2 12 1.666667 0.333333 2 LDCs 3 0 3 2 0 2 Services 0 0 0 0 0 0 End Users 3 0 3 2 0 2 Total 16 2 18 5.666667 0.333333 6

3. Real Time Natural Gas Quality Measurement Datastream (Work Plan Item 3)

Participants discussed whether ‘Real Time’ should be defined in the standard so that users would have context to the data provided. Ms. Gussow stated that even if true real-time data was not available, the most recently available data would be preferable to historical average value. Ms. Gussow proposed that the data should be available as it is collected for the locations where it is collected (ie. SCADA data). Mr. Novak proposed defining real time as posting the data once per hour.

The timing of the availability of data was discussed at length. Mr. Rogers suggested that posting the data once per hour would be too frequent, especially since data will have to be processed before it can be posted. Mr. Young noted similar concerns on the availability of data for posting, adding that daily posting could also be problematic. Ms. Crockett stated end users were sensitive to data quality concerns, but data at major points with flaws would provide far more information than is currently available. Ms. Gussow added that users recognize the data is subject to revision and not billing quality, and could be collected at different times and different frequencies, but said access to any data the pipeline is receiving would help users analyze the data and calculate trends for the quality of the fuel entering their equipment. Mr. Novak noted a standard that incorporated a one day lag for posting would be consistent with the flowing gas standards, and an organization providing data more frequently would be exceeding the standard.

Mr. Rogers reiterated that the pipelines are very concerned about the validity of the data, and that while it may be intended for operational purposes, once the data is published it could be used for purposes beyond what was intended. Mr. Schisler noted that gas control staff does not monitor gas quality data as the SCADA data is received. Mr. Rogers added that gas control staff does not have time to prepare the data for posting. Additionally, Mr. Kardas stated that if end users adjust equipment based on the data, there could be liability if the operational projections were incorrect. Ms. Gussow noted that electric generators have experience monitoring the quality of other fuel sources based on raw data. Mr. Griffith suggested that since most pipeline business is done on the whole day, gas quality data should be provided no more frequently. In addition, he noted there should be time to collect, format and post the data, so it could be two day old data when available.

Participants discussed the locations where the data would be collected and posted. Ms. Gussow stated it would be helpful to receive data at some representative point that leads to the




various end users and could indicate any gas quality trends. Mr. Griffith stated that choosing representative points on some gas systems would be difficult.

The need for the data requested was briefly debated. It was noted that gas quality is very important for many industrial end users that are very sensitive to fuel inputs. Mr. Bray stated that for 60 years this has not been a problem. Ms. Gussow responded that the industry has changed because equipment and gas sources have changed. Ms. Gussow also noted that subsequent environmental and regulatory regulations have impacted end users, and in particular, electric generators. Mr. Novak added that while it may not be a problem today for the industry as a whole, gas quality would be important over the next several years as LNG sources are incorporated into the system and the BTU changes. Mr. Novak stated the LDC concern would not be an increase in BTU, but fluctuation in BTU on a daily basis. Mr. Novak stated this is a matter of being concerned and being proactive for sensitive customers.

Ms. Crockett stated that although her company has installed chromatographs at its delivery locations, those only measure the gas quality as it is delivered and that is too late. To give a specific example, she noted there have been instances where facilities have been out of service for a year due to gas quality.

Ms. Gussow moved, seconded by Ms. Crockett, to adopt the following standard (Proposed Standard S2) to address agenda items 3 and 4:

Transportation Service Providers shall provide website reports under Infomational Postings of daily average gas quality measurements, if available, in a downloadable table that includes the following information:

• Date • Location of measurement (at representative points entering the market area) • Heating Value (used to determine natural gas quantities, receipts and deliveries) • Hydrocarbon Components, % of C1 – C???, as used in determining Heating Value • Specific Gravity • Water (lbs.MMscf) • Nitrogen, % • Carbon Dioxide, % • Oxygen, % • Hydrogen, % • Helium, % • Any other gases being measured • Total Sulfur, grains/100scf and ppm • Hydrogen Sulfide, grains/100scf and ppm • Carbonyl Sulfide, grains/100scf and ppm % • Mercaptans, grains/100scf and ppm • Any other sulfur compounds being measured • Mercury and/or any other contaminants being • Indicator if above data is preliminary or final

Data shall be posted daily as soon as available for the Gas Day being reported and noted as “preliminary”. When data is judged to be final, the Indicator will be updated to “final” and classified as historical.




Among the accompanying Notes, provide the following:

• Pipeline’s definition or scope of “total sulfur” measurement (what’s included or excluded).

Report number of values used in calculating the above “final” daily averages [is it one, two, five or 500] and/or timing and frequency of measurement cycle.

Ms. Gussow reviewed the proposal. There was extended debate on the motion. Much of the discussion on the motion centered around whether it would be appropriate to post the information on the Informational Postings site, as requested, or on the Customer Activities site where it would be password protected. Ms. Gussow stated one advantage of posting the reports on the Informational Postings site was that it would eliminate the need to issue passwords to staff members or contractors that would have no other need to access the Customer Activities site. She also noted that posting in this manner would allow end users, who are not necessarily shippers, to access the valuable data. Ms. Crockett added that putting the data under Informational Postings would allow contractors (engineers and chemists) without security clearance to use the data. Mr. Young stated the data should only be available to the point operators. Ms. Scott noted that some pipelines provide the data today without a password, and changing the posting location to Customer Activities would force them to password protect the data. Mr. Mills concurred that password protection was not necessary, since there would not likely be any national security concerns. One suggestion was to allow the pipeline to have the option of posting the information on Informational Postings or Customer Activities. Ms. Gussow stated that if the information was password protected, there should be a better way of managing passwords. If there were security concerns about locations, Ms. Gussow suggested the location be coded and parties wanting to know the specific location could contact the pipeline to find out that information. Mr. Mills stated that the producers have continually asked for gas quality information, and it is FERC’s intent that the information be transparent and easily accessible. Mr. Burden noted that if the information is not password protected, it will be available for query on search engines, like Google. Ms. Van Pelt stated that if there is a subsequent request to standardize reporting points and the current report is located under informational postings, it will likely follow that the proprietary information will be posted there as well.

There was additional discussion about posting locations. Mr. Novak noted that the motion did not, and would not appropriately, address the locations where the data was collected. On representative points, Ms. Crockett stated the information needed was typical blended mainstream gas, not production area points. Mr. Love stated that on a reticulated pipeline, it is virtually impossible to define a representative point, since gas enters and leaves the system at the same points, and added that it sometimes relates to how the pipeline is configured that day. Ms. Gussow stated that heating content information is included in billing, so the data that supports those calculations should be available. Mr. Novak stated that since the standard does not direct posting at a particular point, the location will vary according to pipeline.

Mr. Rogers suggested there were two types of gas quality data – gas quality data available at a representative point not necessarily connected with a measurement station (mainline) and custody gas quality information used for gas measurement (proprietary). He stated the first type of gas quality data could be non-password protected, or protected under a blanket password, while the second type of information should be password protected and available only to the interconnecting party. He suggested the subcommittee evaluate the two types of data separately. The subcommittee generally agreed with the concept that there were two different types of gas quality information; however, Mr. Mills stated there should be no differentiation in the treatment of the data.




Ms. Gussow presented a revised motion. After Ms. Gussow left the meeting, Ms. Crockett and Ms. Scott sponsored the revised motion. There was continued discussion and refinement of the revised proposal. On Mr. Young’s suggestion, Ms. Crockett and Ms. Scott agreed to postpone voting on the second revised motion (See Proposed Standard S2, attached) until the next meeting.

The subcommittee discussed the treatment of posting non-representative locations. It was noted that this was likely the proprietary information where password protection was possibly warranted. To make the intent of the subcommittee clear, the subcommittee drafted Proposed Principle P1 to address non-representative points. There was some concern stated by Ms. Scott that the gas quality information would not be centrally located. The following text was developed for Proposed Principle P1:

For any location(s), the Transportation Service Provider (TSP) may, at its discretion, elect to provide additional gas quality information in any format, including the format specified in NAESB WGQ Standard No. S2. The TSP may choose how to provide the information.

This item will be voted on at the next meeting.

Ms. Scott noted that data retention was an open issue. Mr. Young stated that FERC mandates a three year data retention policy. Mr. Love stated that since there was no specific FERC mandate on internet availability on this issue, the subcommittee could consider how long the data should be maintained on the website, with subsequent retention being through archives accessible by other means. Mr. Love suggested the group discuss this topic at the next meeting.

4. Historical Natural Gas Quality Reports (Work Plan Item 2)

This item was discussed within item 3 so no further discussion was required.

5. Discussion of Applicability of NAESB WGQ Standard 2.4.6

Mr. Novak noted that the discussion of NAESB WGQ Standard 2.4.6 was not applicable due to the proposed standards and principles discussed above.

6. Upcoming Meetings (further details to follow)

August 4-5, 2004 AGA, Washington D.C. September 1-2, 2004 Kern River Gas Transmission, Salt Lake City, UT October 14-15, 2004 National Fuel Gas, Buffalo, NY

7. Adjourn

The meeting adjourned on July 8 at 2:00 p.m. Central.

8. Attendees

Name Organization Day One Day Two Ed Anderson RJ Rudden Associates Phone Mariam Arnaout American Gas Association Phone Jeff Bittel Texas Gas Phone Martha Braddy BG LNG Services, LLC In Person Mike Bray Shell Gas Transmission In Person Curt Brechtel Arizona Public Service Phone Kelly Brooks Williston Basin Phone Phone




Name Organization Day One Day Two Kathryn Burch Duke Energy Gas Transmission In Person In Person Christopher Burden Williams Gas Pipeline Phone Phone Craig Colombo Dominion Resources Phone Phone Pete Connor Nisource Phone Phone Valerie Crockett Tennessee Valley Authority In Person In Person Dale Davis Williams Gas Pipeline Phone Tony Diocee BGLS In Person Andrew Dotterweich Consumers Energy Phone Mark Gracey Tennessee Gas Pipeline In Person In Person Bill Griffith El Paso Western Pipelines In Person In Person Bill Grygar Panhandle Eastern Pipe Line In Person Dona Gussow Florida Power & Light In Person In Person Sheri Heslington Dominion Exploration In Person Judy Hickman NiSource Pipelines In Person Joe Kardas National Fuel Gas Supply In Person In Person Iris King Dominion Transmission Phone Phone Toby Kuehl Northern Natural Gas In Person In Person Paul Love Kinder Morgan Interstate Gas In Person In Person Marcy McCain Duke Energy Gas Transmission Phone Phone Randy Mills ChevronTexaco In Person In Person Janie Nielsen Kern River Gas Transmission Co. In Person In Person Mike Novak National Fuel Gas Distribution In Person In Person Todd Oncken NAESB In Person In Person Marjorie Perlman Energy East Management Phone Phone Richard Pinion OATI In Person Jesse Rogers TGC In Person In Person Mike Schisler NGPL In Person In Person Donna Scott Transwestern Pipeline Co. In Person In Person Richard Smith ExxonMobil In Person Kim Van Pelt Panhandle Eastern Pipe Line In Person In Person Randy Young Gulf South Pipeline In Person In Person Steve Zavodnick Baltimore Gas & Electric In Person In Person

North American Energy Standards Board 1301 Fannin, Suite 2350, Houston, Texas 77002

Phone: (713) 356-0060, Fax: (713) 356-0067, E-mail: [email protected] Home Page: www.naesb.org

WGQ Business Practice Subcommittee Meeting Final Minutes – August 4-5, 2004

Page 1

TO: WGQ Business Practices Subcommittee and Interested Industry Participants


RE: Final Minutes for the WGQ Business Practices Subcommittee – August 4-5, 2004

DATE: August 10, 2004

NORTH AMERICAN ENERGY STANDARDS BOARD WHOLESALE GAS QUADRANT

BUSINESS PRACTICES SUBCOMMITTEE August 4-5, 2004 Hosted by American Gas Association

Final Minutes

1. Administrative

Mr. Novak called the meeting to order and welcomed participants. Mr. Oncken gave the antitrust advice. Participants introduced themselves.

Ms. Davis moved, seconded by Mr. Young, to adopt the draft agenda with the addition of Discussion of IR Question as item 2. The motion passed unanimously.

The draft minutes from July 7-8, 2004 were reviewed and minor modifications were offered. Ms. Perlman moved, seconded by Mr. Zavodnick, to adopt the draft minutes as modified. The motion passed unanimously.

2. Discussion of IR Question

Ms. Davis stated that the Information Requirements Subcommittee (IR) needed clarification on which data sets were impacted by Request R97110, since the BPS instruction to IR did not specify the data sets. She noted possible interpretations of the instructions would be to make the modifications to only the three data sets specifically stated in the request (offer, award, bid) or the seven capacity release data sets noted in the memo from IR. Ms. Davis moved, seconded by Ms. Chezar, as follows:

In response to the question from IR (memo dated July 27, 2004) regarding R97110 wherein the definition for Posting Date and Posting Time are being modified, such modifications should be applied to the following data sets:

Standard 5.4.1 Offer Download Standard 5.4.2 Bid Download Standard 5.4.3 Award Download Standard 5.4.4 Replacement Capacity Standard 5.4.13 Operationally Available and Unsubscribed Capacity Standard 5.4.16 System-Wide Notices Standard 5.4.17 Note/Special Instruction

During discussion, it was noted that the request related to capacity release at the time of the request. Being such, Mr. Gwilliam and Ms. Nielsen proposed the changes should be limited to those in the original request. Ms. Davis and Ms. Chezar accepted the modification (shown in redline above). The motion passed unanimously.




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3. Discussion and Vote

Workpaper – Modifications to Proposed Standard No. S1

Ms. Crockett moved, seconded by Mr. Colombo, to replace the original Proposed Standard S1, passed during the last meeting, with the modified Proposed Standard S1 submitted by National Fuel Distribution. There was extensive discussion on the proposed standard.

Mr. Love stated concern about reporting analytical test method, especially in cases where there could be different test methods for different locations. Mr. Love added that testing method might not apply to all elements of the table. Further, he said that testing method does not necessarily correlate to a specific characteristic; rather, a chromatograph or sample bottle could be used to test for multiple characteristics. Ms. Gussow explained that including this item in the report gives end users comfort that the testing process is standardized, without having to go into great detail. Additionally, she stated the requirement would go to testing method (such as specific ASTM Standards for determining BTU), not sampling methods. Mr. Novak proposed that in cases where multiple forms of testing are used, they are all listed. It was noted that in cases where the specific tariffs did not include testing methods, no information would be required to be posted. Mr. Novak added that entities providing more information than that contained in their tariff or General Terms and Conditions would be exceeding the standards.

As a result of the discussion, Ms. Crockett and Mr. Colombo accepted changes to their motion. As modified, modified Proposed Standard S1 reads:

A Transportation Service Provider (TSP) should provide on its Informational Postings Web Site the natural gas quality tariff provisions (or where no tariff exists in the general terms and conditions) information in a table, to include as applicable:

• property or characteristic, • property or characteristic symbol, • measurement unit(s), • testing method(s), • value(s) (minimum, maximum, range), • indicator of whether the value for the characteristic or property applies to the

receipt location(s) or delivery location(s) or both, • a table footnote or a link to where details may be provided on that characteristic

or property, and • any notes or disclaimers.

The table specified herein is intended to be a simple reference guide and is not intended to act as a replacement to the TSP’s tariff. If there are inconsistencies between the table specified herein and the TSP’s tariff, the tariff should control.

The motion passed on a balanced vote.

Segment Votes Cast Balanced Vote YES NO TOTAL YES NO TOTAL Producers 1 0 1 1 0 1

Pipelines 9 5 14 1.28571

4 0.71428

6 2 LDCs 9 0 9 2 0 2 Services 0 0 0

End Users 5 1 6 1.66666

7 0.33333

3 2




Page 3

Total 30 5.95238

1 1.04761

9 7




Page 4

4. Discussion and Vote

Workpaper – Proposed Standard No. S2

Ms. Gussow moved, seconded by Ms. Crockett, to adopt Proposed Standard S2. While discussing the proposed standard, it was noted that Mr. Connor submitted a workpaper containing alternate language for the opening paragraph. Although all of Mr. Connor’s proposed modifications were discussed and considered, Ms. Gussow and Ms. Crockett did not accept any of the proposed changes.

There was extensive discussion on the meaning of ‘location(s) that are representative of mainline gas flow.’ Mr. Mills clarified that the intent is not all points that would be representative of mainline gas flow, but a representative sample that would reflect the gas quality on discrete segments of the pipeline.

Participants discussed whether and how the locations would be determined. Ms. Chezar opposed the pipeline having complete discretion in selecting the locations, and added that customers should have the opportunity for input into that decision, possibly through the regulatory process. Ms. Chezar stated that while problems are not anticipated, safeguards to protect customers should be in place. Ms. Nielsen expressed concern that the current wording leaves it open for some parties to interpret the language to mean that all points should be posted, not just a sampling, and that was not the stated intent of the requester. Mr. Novak suggested that a principle should be drafted reflecting the understanding that it is not contemplated that sampling and posting would be done for every point and that the pipelines would have the first opportunity to propose locations, with customers responding through the regulatory process. Ms. Van Pelt stated she had not considered the possibility of a FERC compliance filing that would detail the locations. The potential for posting multiple points bothered many of the pipeline representatives. Ms. Chezar stated she expected the pipelines through the regulatory compliance filing process to circulate a list of proposed locations among their customers prior to finalizing the list.

Mr. Love expressed concern that specifically discussing the locations could be broaching a policy issue, since it goes far beyond report format. Ms. Davis expressed concern that without limiting the parameters, pipelines would face difficulties in determining the points and properly implementing the standards. Mr. Mills stated that the number of points is self-determining for most pipelines, except highly reticulated pipelines. Mr. Mills suggested including language that would limit the number of locations to 15. Ms. Gussow re-iterated that she is not looking for every receipt and delivery point. Ms. Chezar opposed Mr. Mills’ proposal because the number could change over time, especially with the forthcoming LNG supplies. Ms. Chezar also expressed concerns that limiting the number could hamper shippers’ ability to raise concerns.

Ms. Chezar noted that the original intent of this request was to protect very expensive electric generation equipment, but the information contained in the reports could be very useful to many parties. For example, she stated LDCs could use the information to gain a general understanding about what is going on with the system and why the BTU has crept up a little. Mr. White questioned the value of the information. Ms. Van Pelt agreed and added that the resulting standard might not address the needs contained in the request. Mr. Novak stated the value of the information is in the beholder and to the benefit of end users. Mr. Novak stated that LDCs could provide customers with advanced notice of quality-challenged gas. However, it was recognized that the concept of representative points could be problematic on some systems.

Mr. Gwilliam stated a stumbling block for the pipeline segment is posting this information on the Informational Postings Web Site. He stated the pipelines might not oppose the postings if




Page 5

they were on the Customer Activities Web Site and the location operators had access to the data. Ms. Chezar stated that information would not be helpful, since the meter operators would have access to it instead of the shippers or end users. Ms. Gussow added that there are also parties behind the city gates that need access to the information and it could be burdensome to manage passwords to Customer Activities Web Sites when only some people need to see this data.

Regarding the issue of BTU creep, Mr. Love stated the significant issue is whether the gas delivered meets the quality specifications in the tariff. Ms. Chezar explained that BTU impacts how distribution systems are operated. Ms. Chezar stated the information would be valuable because it could improve communications because potential problems could be identified and discussed before they become critical. Ms. Crockett added that while the delivery may be within tariff specifications, there are emissions restrictions that might be more stringent than the tariff specifications.

Participants discussed eliminating the list. Mr. Love opposed inclusion of the list because a strict interpretation of the standard could mean that points would have to be selected where reports could be presented on all of the items listed. Ms. Crockett stated that she thought the words “to the extent available” protected the TSP. Ms. Chezar opposed deleting the list. Ms. Gussow stated the list was a representative list developed based on several sources, so it does not necessarily encompass everything covered by every pipeline’s tariff. It was determined to treat the list as an example of the information that could be provided.

Ms. Gussow and Ms. Crockett accepted the modified language, as follows:

The Transportation Service Provider (TSP) should provide on its Informational Postings Web Site daily average gas quality information for prior gas day(s), to the extent available, for location(s) that are representative of mainline gas flow. The information available for the identified location(s) should be provided in a downloadable format. Information should be reported in units as specified in the tariff or general terms and conditions. In any event, compliance with gas quality requirements is in accordance with the TSP’s tariff or general terms and conditions.

The following are examples of gas quality attributes that could be included in the posting for the applicable Gas Day(s) and location(s):

• Heating Value • Hydrocarbon Components, % of C1 – Cnn, as used in determining Heating Value • Specific Gravity • Water • Nitrogen • Carbon Dioxide • Oxygen • Hydrogen • Helium • Total Sulfur • Hydrogen Sulfide • Carbonyl Sulfide • Mercaptans • Mercury and/or any other contaminants being measured • Other pertinent gas quality information that is specified in the TSP’s tariff or the

general terms and conditions.




Page 6

The motion passed. Segment Votes Cast Balanced Vote YES NO TOTAL YES NO TOTAL Producers 1 0 1 1 0 1

Pipelines 1 13 14 0.14285

7 1.85714

3 2 LDCs 7 0 7 2 0 2 Services 0 0 0 End Users 3 1 4 1.5 0.5 2

Total 4.64285

7 2.35714

3 7

Workpaper – Proposed Principle No. P1

Ms. Burch moved, seconded by Ms. Davis, Proposed Principle No. P1, as follows:

For any location(s), the Transportation Service Provider (TSP) may, at its discretion, elect to provide additional gas quality information. The TSP may choose how to provide the information.

Ms. Burch noted it was a minor modification from the original language contained in the workpaper. During discussion, Ms. Van Pelt reiterated that the proposed principle addresses concerns about comparability issues and pipeline’s ability to provide additional information. Ms. Burch and Ms. Davis accepted additional changes to the motion, which now reads:

For any location(s), the Transportation Service Provider (TSP) may, at its discretion, elect to provide gas quality information in addition to that specified in NAESB WGQ Standard No. [S2]. The TSP may choose how to provide the information.

The motion passed unanimously.

Segment Votes Cast Balanced Vote YES NO TOTAL YES NO TOTAL Producers 1 0 1 1 0 1 Pipelines 11 0 11 2 0 2 LDCs 7 0 7 2 0 2 Services 0 0 0 End Users 4 0 4 2 0 2 Total 7 0 7

5. Standards Development Discussion & Potential Vote(s)

Gas Quality Data Retention Period, Online/Offline Availability

Mr. Novak proposed retaining the report produced by Proposed Standard No. S2 on line for three months and archived for three years. There were several other options considered, including 90 days, three gas months, or six months to coincide with the invoice timelines. Mr. Love stated that the proposal mirrors typical FERC retention requirements.

Ms. Gussow moved, seconded by Ms. Crockett, Proposed Standard No. S3 as follows:

The online retention period be 3 months and for long term retention in accordance with regulatory requirements.




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There were several proposed changes during discussion to add specificity to the standard. While several parties would have preferred to delete language addressing long term retention to avoid potential conflicts in the future, Mr. Novak stated the language clarified that the information would be available offline for the period between three months and three years.


Data provided pursuant to NAESB WGQ Standard No. [S2] should be made available on the Transportation Service Provider’s Web Site for 3 months. Beyond this initial period, the data should be made available offline in accordance with regulatory requirements.

The motion passed unanimously.

Segment Votes Cast Balanced Vote YES NO TOTAL YES NO TOTAL Producers 0 0 0 0 0 0 Pipelines 9 0 9 2 0 2 LDCs 7 0 7 2 0 2 Services 1 0 1 1 0 1 End Users 4 0 4 2 0 2 Total 7 0 7

Download Format for Proposed Standard No. S2

The subcommittee discussed whether it was necessary to specify a file format for the downloadable file. Ms. Davis noted that the NAESB standard flat file format is defined in existing NAESB standards, and reviewed NAESB WGQ Standards 4.2.12, 4.3.80, 4.3.81 and 4.3.82, which relate to the flat file format. There was unanimous agreement that an EDI data set was not required.

Ms. Gussow moved, seconded by Ms. Crockett, Proposed Standard S4 as follows:

Data provided pursuant to NAESB WGQ Standard No. [S2] should be downloadable in the NAESB WGQ FF/EDM format.

During discussion, Ms. Davis noted that the FERC does not require all regulated entities to use flat files. Ms. Nielsen suggested drafting a standard that included NAESB flat file format or tab-delimited format. On further discussion, it was determined that including a description of the contents with the downloadable file would be more efficient and less restrictive on the companies providing the data.


Data provided pursuant to NAESB WGQ Standard No. [S2] should be provided in a tabular downloadable file to be described by the Transportation Service Provider. The first row of the file should contain the column headers.

The motion passed unanimously. Segment Votes Cast Balanced Vote YES NO TOTAL YES NO TOTAL Producers 0 0 0 0 0 0 Pipelines 6 0 6 2 0 2 LDCs 6 0 6 2 0 2 Services 1 0 1 1 0 1 End Users 4 0 4 2 0 2




Page 8

Total 7 0 7




Page 9

6. Upcoming Meetings (further details to follow) – potential cancellation

September 1-2, 2004 Kern River, Salt Lake City, UT October 14-15, 2004 National Fuel Gas, Buffalo, NY

The subcommittee’s work on gas quality has been completed. However, there was no change in the meeting schedule. Instead, the subcommittee will work on existing workload during the previously scheduled meetings. Additionally, a conference call the week of August 16 was discussed, but has not been scheduled.

7. Adjourn

The meeting adjourned on August 5 at 10:45 a.m. Eastern.

8. Attendees

Name Organization Segment Day One Day Two Mariam Arnaout American Gas Association NA In Person In Person Kathryn Burch Duke Energy Gas

Transmission Pipeline In Person In Person

Christopher Burden Williams Gas Pipeline Pipeline Phone Phone Tina Burnett The Boeing Company End User Phone Dolores Chezar KeySpan Energy LDC In Person Craig Colombo Dominion Resources LDC In Person In Person Pete Connor NiSource End User Phone Phone Valerie Crockett Tennessee Valley Authority End User In Person In Person Kelly Daly Stinson Morrison Hecker (rep.

APS) End User In Person

Dale Davis Williams Gas Pipeline Pipeline In Person In Person Lisa Fitzgerald NiSource Pipelines Pipeline In Person In Person Mark Gracey Tennessee Gas Pipeline Pipeline In Person In Person Bill Griffith El Paso Western Pipeline Pipeline In Person In Person Dona Gussow Florida Power & Light End User In Person In Person Tom Gwilliam Iroquois Gas Transmission Pipeline In Person In Person Amy Hamilton Peco Energy Co. LDC In Person In Person Judy Hickman NiSource Pipelines Pipeline In Person In Person Brad Holmes Transwestern Pipeline Pipeline In Person In Person Richard Ishikawa Southern California Gas Co. LDC In Person In Person Iris King Dominion Transmission Pipeline In Person In Person Rose Lennon Washington Gas LDC In Person Paul Love NGPL Pipeline In Person In Person Rae McQuade NAESB NA Phone Phone Chris Maturo Northern Indiana Public

Service LDC In Person In Person

Randy Mills ChevronTexaco Producer In Person Janie Nielsen Kern River Gas Transmission Pipeline In Person In Person Mike Novak National Fuel Distribution LDC In Person In Person Todd Oncken NAESB NA In Person In Person Marjorie Perlman Energy East Management LDC Phone Phone Jesse Rogers Trunkline Gas Company Pipeline Phone Phone Keith Sappenfield Encana Corporation Services Phone Phone Laura Schepis APGA LDC In Person




Page 10

Jim Templeton Comprehensive Energy End User Phone Phone Kim Van Pelt Panhandle Eastern Pipeline Pipeline Phone Phone Brian White NiSource Pipelines Pipeline In Person In Person Randy Young Gulf South Pipeline In Person In Person Steve Zavodnick Baltimore Gas & Electric LDC In Person In Person Denyse Zosa Stinson Morrison Hecker (rep.

APS) End User In Person In Person



Joint WGQ EDM/IR/Technical Subcommittee Conference Call Final Minutes– August 11, 2004

Page 1

TO: WGQ Business Practices Subcommittee, Information Requirements Subcommittee and Technical Subcommittee and Posting for Interested Industry Participants


RE: Final Minutes for a Joint WGQ Business Practices Subcommittee / Information Requirements Subcommittee / Technical Subcommittee Conference Call – August 11, 2004

DATE: August 18, 2004

NORTH AMERICAN ENERGY STANDARDS BOARD WHOLESALE GAS QUADRANT

JOINT BPS/IR/TECHNICAL SUBCOMMITTEES Conference Call

Wednesday, August 11, 2004: 1:00p.m. – 3:00p.m. Central FINAL MINUTES

1. Administrative:

Ms. Van Pelt called the meeting to order, welcomed attendees and gave the antitrust advice. Participants introduced themselves. Ms. Davis moved, seconded by Mr. Young to adopt the agenda as drafted. The motion passed unanimously.

2. Business Practices Subcommittee – Approval of Draft Minutes of August 4-5, 2004

The redlined draft minutes, submitted by Ms. Davis, from the August 4-5, 2004 WGQ Business Practices Subcommittee were reviewed. There was an additional minor revision. Ms. Davis moved, seconded by Mr. Young to adopt the revised redlined draft minutes from August 4-5, 2004. The motion passed unanimously.

3. Technical Implementation of Proposed Standards - R03035A – Gas Quality

Ms. Davis stated the WGQ Information Requirements Subcommittee (IR) has reviewed the proposed standards and determined there are no requirements for data elements. There was brief discussion about modifying the narrative section for Information Postings of the EDM Manual, but it was determined no changes were needed.

Ms. Van Pelt moved, seconded by Mr. Stender, that the NAESB WGQ Information Requirements has determined that no changes are necessary. The motion passed unanimously.

Ms. Davis moved, seconded by Mr. Stender, that based on the NAESB WGQ Information Requirements Subcommittee's conclusions, NAESB WGQ Technical Subcommittee has determined that no changes are necessary. The motion passed unanimously.

4. Adjourn

The conference call adjourned at 1:40 p.m. Central.



Joint WGQ EDM/IR/Technical Subcommittee Conference Call Final Minutes– August 11, 2004

Page 1

5. Attendees

Name Organization Notes Kathryn Burch Duke Energy Gas Transmission Christopher Burden Williams Gas Pipeline Not voting Delores Chezar Key Span Dale Davis Williams Gas Pipeline Lisa Fitzgerald NiSource Mark Gracey Tennessee Gas Pipeline Bill Griffith Colorado Interstate Gas Tom Gwilliam Iroquois Gas Transmission Systems Joe Kardas National Fuel Gas Michael Novak National Fuel Distribution Todd Oncken NAESB Admin Marjorie Perlman Energy East Management Corp. Steve Sappenfield EnCana Micki Schmitz Northern Natural Gas Donna Scott Transwestern Mike Stender El Paso Kim Van Pelt Panhandle Eastern Pipe Line Randy Young Gulf South Pipeline



WGQ Executive Committee Meeting Draft Minutes – September 16, 2004

via email and posting

TO: All NAESB Executive Committee Members and Posting for Interested Parties


RE: Wholesale Gas Quadrant EC Meeting Draft Minutes - September 16, 2004

DATE: September 17, 2004

NAESB Wholesale Gas Quadrant Executive Committee Meeting Driskill Hotel, 604 Brazos, Austin, Texas

September 16, 2004 – 1:00 pm to 3:00 pm Central DRAFT MINUTES

1. Administration

Ms. Van Pelt called the meeting to order and welcomed meeting participants. Mr. Oncken gave the antitrust advice. Ms. McQuade called the roll of Executive Committee members and noted that ballot had been received from five Executive Committee members in advance of the meeting. Quorum was established. Ms. Chezar moved, seconded by Mr. Griffith, to adopt the agenda as drafted. The motion passed unanimously.

2. Discussion of Proposed Gas Quality Reporting Standards and Submitted Comments

Please see discussion below.

3. Vote on Proposed Gas Quality Reporting Standards and any amendments made during the meeting

Mr. Novak moved, seconded by Ms. Burnett, to adopt the recommendation for R03035A with no changes – to modify NAESB WGQ Standard 4.3.23, add proposed NAESB WGQ Principle 4.1.p1, and add proposed NAESB WGQ Standards 4.3.s1, 4.3.s2, 4.3.s3 and 4.3.s4. Mr. Shepard proposed to modify proposed NAESB WGQ Standard 4.3.s3 to be consistent with his filed comments, stating the change would clarify the BPS’s intention that the information should be posted for three months on a rolling basis. Mr. Novak agreed the change would add clarity to the standard, but declined to accept the amendment so that the notational ballots submitted prior to the meeting could be considered on the motion. Instead, he suggested the Executive Committee consider the proposed language after the instant motion is considered. Mr. Novak reviewed the comments submitted by Williston Basin Pipeline, which provide a liability concern that service requesters could take action on incorrect information, but stated the issues raised in those comments were a regulatory concern and could not be addressed through the standards process.

Mr. Mills stated that concern had been raised by Mr. Frost of ConocoPhillips that shippers should have access to the universe of points available before representative points were determined. Mr. Gracey stated that pipelines have a long history of working with their customers prior to making a regulatory filing, and that model would likely continue for this issue. Ms. Davis noted that was an issue that should be discussed between the pipelines and shippers on an individual basis, and not in the standards setting process. Mr. Griffith added that the discussion during the Business Practices Subcommittee (BPS) meetings suggested that selecting representative points would be a collaborative effort to meet everyone’s needs.

A vote on the motion was taken and the motion received the requisite 67% of the EC members but did not receive 40% affirmative vote from the pipeline segment and as such failed with 17 in favor and 5 opposed..

Mr. Griffith moved, seconded by Mr. Young, to adopt proposed NAESB WGQ Standard 4.3.s2. On Mr. Novak’s suggestion that the Executive Committee consider a package of standards rather than




each proposed standard individually, Mr. Griffith and Mr. Young amended the motion to read as follows: modify NAESB WGQ Standard 4.3.23, add proposed NAESB WGQ Principle 4.1.p1, and add proposed NAESB WGQ Standards 4.3.s2, 4.3.s3 and 4.3.s4. Additionally, Mr. Griffith and Mr. Young agreed to consider Mr. Shepard’s proposed modification for proposed NAESB WGQ Standard 4.3.s3, so that it now reads:

Data provided pursuant to NAESB WGQ Standard No. [S2] should be made available on the Transportation Service Provider’s Web Site for the most recent three-month period3 months. Beyond the initial three-month periodthis initial period, the historical data should be made available offline in accordance with regulatory requirements.

Mr. Griffith commented on the pipeline segment’s lack of support for proposed NAESB WGQ Standard 4.3.s1. He stated that although the proposed standard passed the subcommittee on a balanced vote, it was unsupported by the pipeline segment. Mr. Griffith stated that all of the items contemplated by the proposed standard are currently incorporated in the posted tariffs, so posting them in a different format is redundant and could possibly lead to a misinterpretation of the tariff provisions. He added that the posted tariffs include search functionality, so locating the gas quality information is not difficult.

A vote on the motion was taken and the motion passed unanimously for a super majority vote – garnering 67% of the EC members and 40% of each segment with 19 votes in favor and 0 opposed.

Ms. Burnett moved, seconded by Ms. Daly, to adopt proposed NAESB WGQ Standard 4.3.s1. Mr. Novak suggested the proposed standard be considered as proposed NAESB WGQ Principle 4.1.p2 so that pipelines could optionally post the information. Mr. Novak stated that adopting the proposed standard as a principle could provide a starting point for discussions between pipelines and their customers. Ms. Davis questioned the value of adopting it as a principle, since pipelines could post the information anyway. Ms. Van Pelt added that there is a substantial record from the BPS process that the pipeline segment did not support this proposed standard, so it should not be surprising that the pipeline segment would not support the proposed standard at the Executive Committee. Ms. Burnett and Ms. Daly agreed to accept the modification. Mr. Griffith suggested that proposed NAESB WGQ Principle 4.1.p1 would address the posting of information that was contemplated under proposed NAESB WGQ Principle 4.1.p2 that was not duplicative of the tariff provisions. There was not consensus on this point.

A vote on the motion was taken and was opposed by the pipeline segment with 15 votes in favor and 5 opposed. There was discussion that because this was a principle, and not considered a standard, it required a simple majority rather than a super-majority vote.

Mr. Buccigross moved, seconded by Mr. Shepard, to adopt proposed NAESB WGQ Standard 4.3.s1, removing all references to a table. Ms. Van Pelt reiterated that the pipeline segment had concerns about posting information that is already posted as tariffs. Ms. Davis and Ms. Burnett proposed the following alternate language for proposed NAESB WGQ Standard 4.3.s1:

A Transportation Service Provider (TSP) should provide on its Informational Postings Web Site a link to the natural gas quality tariff provisions (or where no tariff exists in the general terms and conditions) or a simple reference guide to such information.

Mr. Buccigross and Mr. Shepard amended the motion to incorporate the alternate language.

A vote on the motion was taken and the motion passed unanimously for a super majority vote – garnering 67% of the EC members and 40% of each segment with 18 votes in favor and 0 opposed. Proposed NAESB WGQ Standard 4.3.s1, as adopted by the Executive Committee, will replace proposed NAESB WGQ Principle 4.1.p2.

4. Other Business

No other business was discussed.




5. Adjourn

The meeting adjourned on September 16 at 2:35 p.m. Central.




6. Executive Committee Attendance and Voting Record End User Segment Attendance Package

1 Package 2

Principle 4.1.p2

Standard 4.3.s1

Diane McVicker Sr. Principal Fuel Supply Analyst, Salt River Project Ballot BY Gary Hinners Director of Natural Gas Regulatory Issues, Reliant Energy

Services, Inc. Phone Y Y Y Y

Kelly Daly Partner, Stinson, Morrison & Hecker, rep. Arizona Public Service Co.

Phone Y Y Y Y

Dona Gussow Contracts Coordinator, Florida Power and Light Ballot BY Tina Burnett Natural Gas Operations Administrator, The Boeing Company In Person Y Y Y Y Distribution Segment Rick Ishikawa, alt. for R. Schwecke

Transportation Contract Administrator, Southern California Gas Company

In Person Y Y Y Y

Dolores Chezar Director, Regulatory Policy, KeySpan Energy In Person Y Y Y Chris Maturo Director, Operations Integration, NiSource, Inc. Phone Y Y Y Y Mike Novak Assistant General Manager, National Fuel Gas Distribution In Person Y Y Y Steve Zavodnick, alt. for S. Sullivan

Baltimore Gas & Electric Ballot BY BY BY BY

Pipeline Segment Mark Gracey El Paso Eastern Pipeline In Person N Y N Y Bill Griffith Director, Transmission & Storage, Colorado Interstate Gas Co. In Person N Y N Y Dale Davis Consultant, Williams Gas Pipeline In Person N Y N Y Randy Young Director Regulatory Compliance, Gulf South Pipeline In Person N Y N Y Kim Van Pelt NAESB Coordinator, Panhandle Eastern Pipe Line In Person N Y N Y Producer Segment Jim Busch Director of Energy Policy and Regulation, BP Energy Company Paul Keeler Managing Attorney, Marketing, Burlington Resources Trading Phone Y Y Y Sheri Heslington Dominion Exploration & Production, Inc. Ballot BY Richard Smith Regulatory, ExxonMobil Gas & Power Marketing Ballot/Phone BY Y Y Y Mike Shepard General Counsel, Mewbourne Oil Company Phone Y Y Y Y




Services Segment Suzanne Calcagno Associate Director – Regulatory Compliance, UBS Energy LLC Ballot/Phone BY Y Y V A C A N C Y Leigh Spangler CEO, Latitude Technologies In Person Y Y Y Y Jim Buccigross Vice President, 8760 Inc. Phone Y Y Y Y Keith Sappenfield Regional Director – US Regulatory Affairs, EnCana Marketing

(USA) Inc. In Person Y Y Y Y

Fails Passes Under Review

Passes

Other Attendance

Name Organization In Person/Phone Mariam Arnaout American Gas Association Phone Kathryn Burch Duke Energy Gas Transmission In Person Christopher Burden Williams Gas Pipeline In Person Michael Desselle American Electric Power In Person Bill Grygar Panhandle Eastern Pipe Line In Person Amy Hamilton PECO Energy Company Phone Laura Kennedy NAESB In Person DeDe Kirby NAESB In Person Richard Kruse Duke Energy Gas Transmission In Person Marcy McCain Duke Energy Gas Transmission In Person Bob McKay Constellation In Person Rae McQuade NAESB In Person Randy Mills ChevronTexaco In Person Todd Oncken NAESB In Person Matt Payne Not Provided Phone Bob Phillips Dominion Transmission Phone Veronica Thomason NAESB In Person Brian White NiSource Pipelines Phone

Appendix 2 Ratification Ballot

The ratification ballot, which includes the proposed standards that were adopted by the wholesale gas quadrant representatives on the Executive Committee, was sent out to the NAESB wholesale gas quadrant membership on September 20 with results returned by October 20.



via email TO: NAESB Wholesale Gas Quadrant Members FROM: Todd Oncken, Deputy Director RE: Member Ratification of Standards Adopted by the Wholesale Gas Quadrant of the

Executive Committee DATE: September 20, 2004

Please find the attached ballot to record your vote on the ratification of a recommendation approved by the Executive Committee on September 16, 2004. The draft minutes for this meeting are available on the NAESB web site, and the recommendation is attached to the ballot. To record your vote, please fill out page two of this communication and either email ([email protected]) or fax it (713-356-0067) to our office by October 20.

The EC voting record and discussion on this item is contained within the EC minutes of

September 16, 2004. The EC minutes can be found on the NAESB home page (www.naesb.org), as can the request (www.naesb.ort/pdf/r03035.pdf), recommendation (www.naesb.org/pdf/03035A_rec.doc), and related subcommittee and task force minutes. Transcripts of the EC meeting where this recommendation was discussed can be ordered by calling the NAESB office – 713-356-0060.

Please feel free to call the NAESB office if you have any difficulty retrieving any of this

information.

Best Regards, Todd Oncken

cc: Rae McQuade, Executive Director



NAESB Membership Ratification Ballot for Wholesale Gas Quadrant Standards Due October 20, 2004

To NAESB Office (Fax Number 713-356-0067, email [email protected])

Please vote in favor of or in opposition to the Executive Committee (EC) action taken on September 16, 2004: Support Oppose Recommendation for Request No.: Recommendation R03035A: Modify NAESB WGQ Standard 4.3.23, add

proposed NAESB WGQ Principle 4.1.p1, and add proposed NAESB WGQ Standards 4.3.s1, 4.3.s2, 4.3.s3 and 4.3.s4 as adopted by the Executive Committee on September 16 ,2004.

Member Name: _______________________________________________________ Member Signature: _______________________________________________________ Member Company: _______________________________________________________ Date: _______________________________________________________



NAESB Wholesale Gas Quadrant Members as of September 17, 2004

Organization Segment Contact 8760 s Jim Buccigross

AEP Energy Services, Inc. s Cathy Szasz

Ameren Corporation l Scott Glaeser

Apache Corporation pr Michele Markey

Arizona Public Service Company e Gary Duede Kelly Daly Curt Brechtel

Ballard Natural Gas, LLC s Susan Thibodeaux

Baltimore Gas & Electric Co. l Steven Zavodnick

Barclays Bank PLC s Frank Rodriguez

BG LNG Services, LLC s Martha Braddy

Boeing Company, The e Tina Burnett

BP Energy pr Bill Benham Lauren Kaestner

Bridgeline Gas Marketing pl Georgia Blanchard

Burlington Resources pr Paul Keeler

Calpine Energy Services, LP e Janet Dixon Craig Chancellor

Cargill Incorporated s Kathy Gerken

Cascade Natural Gas Corporation l Mark Sellers-Vaughn

CenterPoint Energy Gas Services, Inc. s James G. Beste

CenterPoint Energy Gas Transmission Company pl Larry Thomas

CenterPoint Energy Mississippi River Transmission Corp. pl Robert Trost

Chevron/Texaco pr Randy Mills

Cinergy e John Procario

Cinergy Marketing and Trading s Randy Bevis

Columbia Gas Transmission pl Carl Levander

Columbia Gulf Transmission Co. pl Carl Levander

Comprehensive Energy Services e Jim Templeton

ConocoPhillips Gas and Power pr Peter Frost

Consolidated Edison Company of NY l Mary Jane McCartney Jim Stanzione

Constellation Power Source, Inc. s Robert McKay

Dauphin Island Gathering Partners pl Katie Rice

Defense Energy Support Center e Veronica Jones




Organization Segment Contact Jacob Moser

Department of Energy e Christopher Freitas

Dominion Exploration and Production, Inc. pr David Ogden Gary Weaver Sheri Heslington

Dominion Resources l Craig Colombo

Dominion Transmission, Inc. pl Gary Sypolt Iris King

DTE Energy Trading, Inc s Marcia Hissong

Duke Energy Gas Transmission - Texas Eastern pl Richard Kruse

Edison Mission Marketing and Trade e Christian Hnat William Roberts

El Paso Eastern Pipelines pl Larry Smith Mark Gracey

El Paso Natural Gas pl William Griffith

El Paso Production Company pr Bill Hebenstreit

Enbridge Energy Company, Inc. pl Terry McGill

EnCana Corporation pr Keith Sappenfield

EnCana Marketing (USA) Inc. s Keith Sappenfield

Energy East Management Corporation l Marjorie Perlman

Energy Velocity s Konni Keuter

Entergy Services, Inc. e Arlynn Kelleher Terry Shields

Equitable Gas Company l Steve Rafferty

Equitrans, L.P. pl Mina Speicher

ExxonMobil Gas Marketing pr Richard Smith Benjamin C. Harris

Florida Power & Light Company e Dona Gussow Joe Stepenovitch

Gas Transmission Northwest Corporation pl Jay Story

Great Lakes Gas Transmission pl Gene Fava

Group 8760 s Jim Buccigross

Gulf South Pipeline pl Claire Burum Randy Young

H S Resources Inc. pl Carol Hall

Imperial Irrigation District e William Rapp

Iroquois Gas Transmission System pl Tom Gwilliam

Kern River Gas Transmission Company pl Janie Nielsen




Organization Segment Contact KeySpan Energy l Dolores Chezar

Laclede Gas Co. l Kenneth Neises

Latitude Technologies s Leigh Spangler

Louis Dreyfus Energy Services L.P. s Mary Ellen Bell Ruby H. Melton

Lower Colorado River Authority e Mickey Bell

Marathon Oil Company pr Robin Perrine

Mewbourne Oil Company pr Michael F. Shepard

National Fuel Gas Distribution l Michael Novak

National Fuel Gas Supply Corp. pl Joseph Kardas

Natural Gas Pipeline Co of America pl Paul Love

Niagara Mohawk Power Corporation l Bruce Garcy

Nicor Gas l Nancy Brucher

NiSource Inc. l M. Christopher Maturo

Northern Natural Gas pl Mary Darveaux

Northwest Natural Gas Company l Randolph Friedman

NOVA Gas Transmission Ltd. pl Doug Miller

Occidental Energy Marketing Inc. (OEMI) pr Carol Wilson

Pacific Gas & Electric l John Breen

Panhandle Eastern Pipe Line pl Bill (William) Grygar Kim Van Pelt

PECO Energy Co. l Reed R. Horting Amy Hamilton

Pemex Gas Y Petroquimica Basica s Juan Enrique Gonzales Azuara

Peoples Gas Light & Coke Co. l Raulando de Lara

Platts s Bill Murphy

Portland General Electric pl Kathy Davies

Portland Natural Gas Transmission System pl David Morgan

PPL EnergyPlus, LLC e Anne Lovett

PPM Energy, Inc. e Scott Hannigan

Prospect Energy s Lyn Maddox

Public Service Electric & Gas l David Wohlfarth

Questar Pipeline Co. pl Scott Hansen

Quorum Business Solutions Inc. s Douglas Allen




Organization Segment Contact

Reliant Energy Services, Inc. e Gary Hinners John Orr Janie Mitcham

Sabine Pipe Line LLC pl Jan Rogers Salt River Project Agricultural Improvement & Power District e Diane McVicker

SCANA Corporation pl Jacquelyn Gettle

Sempra Energy - Southern California Gas Co. l Lee Stewart Rodger Schwecke

Sequent Energy Management, L.P. s Pat Metteauer

Shell Gas Transmission, LLC pl Chuck Cook

SolArc Inc. s Tim Curtis

Southern California Edison Company e Roman Bakke

Southern Company Services, Inc. e Carl Haga

Southern Natural Gas Co. pl Prince McDougal

Southern Star Central Gas Pipeline pl James L. Harder Dale Sanders

Southwest Gas Corporation l Larry Black

SunGard Energy Systems s Maria Onufrow Jennifer Chen

Telvent USA, Inc. s Glenn Irwin

Tennessee Valley Authority e Valerie Crockett

Texas Gas Transmission, LLC pl Jeff Bittel

Tiger Natural Gas s Tracy Phillips

Tractebel Energy Marketing, Inc. s Mark Hodges

TransCanada Pipelines pl Doug Miller

Transwestern Pipeline Co. pl Donna Scott

Trinity Apex Solutions, Inc. s Matt Armstrong

TXU Energy Trading Co. s Brad Jones

TXU Lone Star Pipeline Company pl Steve Easley

UBS Energy LLC s Suzanne Calcagno

Vector Pipeline L.P. pl Amy Bruhn

Washington Gas Light Co. l Adrian Chapman Tim Sherwood Jennifer Deegan

Westfield Gas & Electric Light Dept. l Joyce Bodak

Williams Gas Pipeline pl Dale Davis




Organization Segment Contact Ron Mucci

Williston Basin Interstate Pipeline pl Keith Tiggelaar

Wisconsin Public Service Corporation l Patrick Fox

RECOMMENDATION TO NAESB WGQ EXECUTIVE COMMITTEE

Requester: Florida Power & Light Co. Request No.: R03035(A)

Revised by the WGQ Executive Committee on September 16, 2004

1

1. RECOMMENDED ACTION: EFFECT OF EC VOTE TO ACCEPT

RECOMMENDED ACTION: Accept as requested X Change to Existing Practice Accept as modified below Status Quo Decline

2. TYPE OF MAINTENANCE

Per Request: Per Recommendation:

Initiation X Initiation Modification X Modification Interpretation Interpretation Withdrawal Withdrawal

Principle (x.1.z) X Principle (x.1.z) Definition (x.2.z) Definition (x.2.z) Business Practice Standard (x.3.z) X Business Practice Standard (x.3.z) Document (x.4.z) Document (x.4.z) Data Element (x.4.z) Data Element (x.4.z) Code Value (x.4.z) Code Value (x.4.z) X12 Implementation Guide X12 Implementation Guide Business Process Documentation Business Process Documentation

3. RECOMMENDATION SUMMARY: Modify the following NAESB WGQ Standard:

4.3.23 Add the following proposed NAESB WGQ Principle:

4.1.p1 Add the following proposed NAESB WGQ Standards:

4.3.s1, 4.3.s2. 4.3.s3, 4.3.s4




2

STANDARDS LANGUAGE: Proposed Modified Standard: 4.3.23 Transportation Service Providers should establish an Informational Postings Web site accessible

via the Internet. The subcategories and labels for the categories of Informational Postings should be as follows:

CATEGORIES SUBCATEGORIES Capacity Operationally Available

Unsubscribed Energy Affiliate Info Capacity Allocation Log (when applicable) Employee Transfers Names and Addresses Potential Mergers Shared Facilities

Gas Quality Index of Customers Non-discrimination Rqts Discounts

Emergency Deviations Implementation Procedures Information Disclosure Tariff Discretionary Actions

Notices Critical Non-Critical Planned Service Outage

Organizational Charts Posted Imbalances Tariff Title Page

Table of Contents Preliminary Statement Map Currently Effective Rates Rate Schedules General Terms and Conditions Form of Service Agreement Entire Tariff Sheet Index

Transactional Reporting

These categories and labels should appear in the order specified above and before any others.

Proposed Principle: 4.1.p1 For any location(s), the Transportation Service Provider (TSP) may, at its discretion, elect to

provide gas quality information in addition to that specified in NAESB WGQ Standard No. [S2]. The TSP may choose how to provide the information.




3

Proposed Standard: 4.3.s1 A Transportation Service Provider (TSP) should provide on its Informational Postings Web Site a

link to the natural gas quality tariff provisions (or where no tariff exists in the general terms and conditions) or a simple reference guide to such information.

Proposed Standard: 4.3.s2 The Transportation Service Provider (TSP) should provide on its Informational Postings Web Site

daily average gas quality information for prior gas day(s), to the extent available, for location(s) that are representative of mainline gas flow. The information available for the identified location(s) should be provided in a downloadable format. Information should be reported in units as specified in the tariff or general terms and conditions. In any event, compliance with gas quality requirements is in accordance with the TSP’s tariff or general terms and conditions.

The following are examples of gas quality attributes that could be included in the posting for the applicable Gas Day(s) and location(s): • Heating Value

• Hydrocarbon Components, % of C1 – Cnn, as used in determining Heating Value

• Specific Gravity

• Water

• Nitrogen

• Carbon Dioxide

• Oxygen

• Hydrogen

• Helium

• Total Sulfur

• Hydrogen Sulfide

• Carbonyl Sulfide

• Mercaptans

• Mercury and/or any other contaminants being measured

• Other pertinent gas quality information that is specified in the TSP’s tariff or the general terms and conditions.




4

Proposed Standard: 4.3.s3 Data provided pursuant to NAESB WGQ Standard No. [S2] should be made available on the

Transportation Service Provider’s Web Site for the most recent three-month period. Beyond the initial three-month period, the historical data should be made available offline in accordance with regulatory requirements.

Proposed Standard: 4.3.s4 Data provided pursuant to NAESB WGQ Standard No. [S2] should be provided in a tabular

downloadable file to be described by the Transportation Service Provider. The first row of the file should contain the column headers.

TECHNICAL CHANGE LOG (all instructions to accomplish the recommendation) No technical changes needed. 4. SUPPORTING DOCUMENTATION a. Description of Request: Establish standards relating to gas quality specifications and measurement, as follows:

A. Establish web-based reports for tracking all physical and chemical properties of natural gas defined in pipeline tariffs, including timelines for reporting.

b. Description of Recommendation: Triage Committee: 01/09/2004

Disposition: The Triage Subcommittee recommended that Request R03035 be split into three request according to the classifications found under item 3 of the request. Further, the Triage Subcommittee recommended that parts A and B be found within NAESB scope and properly assigned to the WGQ. The Triage Subcommittee did not make a recommendation on part C.

Executive Committee: 02/05/2004

The Triage Subcommittee recommendation for Request R03035 was discussed extensively. It as agreed to address parts A, B and C of the request individually. Ms. Gussow did not support the separation because she viewed them as parts of the single request.

Ms. Gussow moved, seconded by Ms. Heslington, to accept the Triage Subcommittee recommendation that Request R03035-A is within scope and properly assigned to the WGQ (Vote 3). During extensive discussion the following points were raised:




5

• The request is out of scope because it would require pipelines to dedicate considerable resources to implement and it does not note the frequency requested for reporting data. • Setting timelines for reporting could be out of scope if the resulting standards would run contrary to established testing practices. • Gas quality and chemical properties are defined differently in each tariff, and also in individual contracts. Addressing gas quality outside of a pipeline tariff is inappropriate. • Gas quality should be examined because, from a producer’s perspective, non-uniform specifications affect the ability to perform reliable service. • Discussing the request is premature in light of the pending FERC Conference on February 18, 2004. There was disagreement on whether the conference would impact the scope determination. • The American Society for Testing & Materials, another ANSI-accredited organization, has worked on gas quality issues for decades and this request might duplicate its work. • The quality of gas that is feeding into utility generation facilities impacts the equipment at those facilities and there is no reliable, uniform source to obtain that information. • The bill for gas service is typically tied to the quality of the gas, so quality is a germane issue in verifying charges. • Concerns about gas quality specifications not meeting tariff guidelines should be addressed through the FERC complaint process rather than a standards process. • It was suggested that installing chromatographs at receipt points, a method used by some LDCs, would address the utility concerns for information. • Due to the upcoming FERC Conference on Gas Interchangeability on February 19, the vote and consideration of this request should be postponed. The vote on the motion was taken and the motion failed the WGQ. Even though the motion will

be distributed for notational vote for the WEQ, REQ and RGQ, the motion failed since it must pass the each quadrant of the Executive Committee. The matter will be referred to the Managing Committee and the Board of Directors for an ultimate decision on the scope determination.

Ms. Gussow moved, seconded by Mr. Johnson, to accept the Triage Subcommittee recommendation that Request R03035-B is within scope and properly assigned to the WGQ (Vote 4). During extensive discussion the following points were raised: • The attachment to the recommendation demonstrates through a sampling of pipeline tariffs the methods through which heating value is determined – there are various standards used, or none stated. • There are currently physical measurements that have evolved over decades, and the industry has participated in that process through other forums. • There are some gas quality items reported on through the NAESB ‘Measured Volume Audit Statement.’ • It is significant to a shipper if gas quality is calculated differently on two connecting pipelines, because even though both calculations are valid it hinders the ability to a shipper to move gas. • The opportunity for standards has long been viewed an opportunity to reliably move gas, because the same rules apply regardless of which pipeline is being used. • These are operational issues for pipelines, not informational issues applicable to standards development. • Due to the upcoming FERC Conference on Gas Interchangeability on February 19, the vote and consideration of this request should be postponed.




6

The vote on the motion was taken and the motion failed the WGQ. Even though the motion will

be distributed for notational vote for the WEQ, REQ and RGQ, the motion failed since it must pass the entire Executive Committee. The matter will be referred to the Managing Committee and the Board of Directors for an ultimate decision on the scope determination.

Ms. Gussow moved, seconded by Mr. Johnson, to find that Request R03035-C is within scope and properly assigned to the WGQ (Vote 5). There was no Triage Subcommittee recommendation for Request R03035-C. During extensive discussion the following points were raised: • The Natural Gas Collaborative is looking at this issue and will develop an issues list. • While NAESB does not necessarily provide gas quality expertise, it does provide a forum where all interested parties can participate in the process. It was noted that other trade organizations might not provide the same opportunities. • A FERC proceeding is the proper forum to resolve the issues contemplated by Request R03035-C, since any resulting standards could result in cost shifts. • There is no uniform specification that manufacturers can use to design and build equipment. • Due to the upcoming FERC Conference on Gas Interchangeability on February 19, the vote and consideration of this request should be postponed.

The vote on the motion was taken and the motion failed the WGQ. Even though the motion will be distributed for notational vote for the WEQ, REQ and RGQ, the motion failed since it must pass the entire Executive Committee. The matter will be referred to the Board for an ultimate decision on the scope determination.

Board Managing Committee: 02/10/2004 See meeting notes for discussion. Board of Directors: 03/18/2004

Mr. Haynes re-read Mr. Maassel’s tabled motion regarding action on the WGQ Annual Plan regarding assignment of R03035. Mr. Maddox had previously seconded this motion.

Discussion of the motion began with a presentation by Ms. Dona Gussow, the author of R03035. Her presentation appears at Tab 5 of the meeting materials. Ms. Gussow noted that the request was motivated by the power generation operations at Florida Power & Light (FPL) which generates a large percentage of its power from natural gas. Nationally, 25% of natural gas is used for electric generation. She also stated that various business concerns were also present such as environmental operating permits, due diligence reporting requirements, and the decreased Btu value when liquids drop out. While the request was drafted in three parts, FPL did not intend the parts to be sequential, i.e., part A does not need to be addressed before work begins on part B. She concluded that no part of the request specifically asks NAESB to develop gas quality specification standards, but the business practices involving various aspects of gas quality.




7

During discussion, it was noted that if there are concerns about the gas quality entering a turbine generator, the operator cannot learn of this as it goes into the turbine. The turbine operator needs to know in advance so the equipment can be adjusted. Mr. Haynes noted that many issues, such as the timing of reports, were reserved for the subcommittee to which the work will be assigned.

In support of the motion, Mr. Mills noted that it would give the Natural Gas Council (NGC) efforts time to be addressed, and the FERC to make some policy decisions based on the NGC’s results. Resolution of part A is not dependent upon the NGC. Ms. McQuade noted that she has been involved in the NGC’s efforts and will continue to coordinate with them.

Mr. Sappenfield supported the motion and said NAESB needs to work on part A since there are no policy concerns, whereas FERC may be requested to provide policy on the other parts. Mr. Sappenfield said NAESB is the proper forum for developing standards that would emanate from this request or from the NGC deliberations.

Ms. Ogenyi, with the support of Mr. Anderson and Mr. Sappenfield as well as the motion’s movers, Mr. Maassel and Mr. Maddox, proposed an amendment that acknowledged the Board’s earlier notational ballot on the scope of R03035. The amendment was accepted.

After the amendment, Mr. Maassel’s motion read as follows (amendment underlined): Consistent with the earlier vote by the Board of Directors on scope, I move that the Board amend the 2004 annual plan to add part A of the request for standard R03035 as proposed by Florida Power & Light with the understanding that

(1) the Executive Committee shall first work on part A, and that the Executive Committee shall report to the Board regarding its progress concerning Part A,

(2) work on parts B and C shall be deferred until the Board has determined that the annual plan should be revised to reflect development for parts B and C, and

(3) it is the strong recommendation of the Board that the Executive Committee shall assign work on this matter to the Wholesale Gas Quadrant, with the understanding that, as is customary, any other interested quadrant(s) may participate in the development process.

Mr. Haynes called the vote there being no additional requests for discussion. The motion, with a simple majority vote requirement, passed 37 For, 3 Against, and 2 Abstentions (Mr. Kruse and Mr. Mucci).

Business Practices Subcommittee See the minutes and voting records for the following Business Practices Subcommittee meetings:

May 27, 2004 June 15-16, 2004 July 7-8, 2004 August 4-5, 2004 August 11, 2004




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Information Requirements Subcommittee 8/11/02

Ms. Van Pelt moved, seconded by Mr. Stender, that the NAESB WGQ Information Requirements has determined that no changes are necessary. Motion passes unanimously

Technical Subcommittee 8/11/02

Ms. Davis moved, seconded by Mr. Stender, that based on the NAESB WGQ Information Requirements Subcommittee's conclusions, NAESB WGQ Technical Subcommittee has determined that no changes are necessary. Motion passes unanimously

c. Business Purpose:

d. Commentary/Rationale of Subcommittee(s)/Task Force(s):

Appendix 3

Ratification Ballot Results

The ratification ballot results include the recording of the individual votes cast to ratify the standards that address the wholesale gas quadrant gas quality reporting standards.

11/1/2004 1

NAESB Member Member Contact Support Oppose AbstainSeg

s 8760 Jim Buccigross

s AEP Energy Services, Inc. Cathy Szasz

l Ameren Corporation Scott Glaeser

pr Apache Corporation Michele Markey

e Arizona Public Service Company Gary Duede, Kelly Daly, Curt Brechtel Ys Ballard Natural Gas, LLC Susan Thibodeaux

l Baltimore Gas & Electric Co. Steven Zavodnick Ys Barclays Bank PLC Frank Rodrigues

s BG LNG Services, LLC Martha Braddy

pr BP Energy Bill Benham, Lauren Kaestner Ypl Bridgeline Gas Marketing Georgia Blanchard

pr Burlington Resources Paul Keeler

e Calpine Energy Services, LP Janet Dixon, Craig Chancellor

s Cargill Incorporated Kathy Gerken

l Cascade Natural Gas Corporation Mark Sellers-Vaughn

s CenterPoint Energy Gas Services, Inc. James G. Beste

pl CenterPoint Energy Gas Transmission Company Larry Thomas Ypl CenterPoint Energy Mississippi River Transmission Corp. Robert Trost

pr Chevron/Texaco Randy Mills Ye Cinergy John Procario

s Cinergy Marketing and Trading Randy Bevis

pl CMS Panhandle Eastern Pipe Line Co. Bill (William) Grygar, Kim Van Pelt Ypl Columbia Gas Transmission Carl Levander

pl Columbia Gulf Transmission Co. Carl Levander

e Comprehensive Energy Services Jim Templeton Ypr ConocoPhillips Gas and Power Peter Frost Yl Consolidated Edison Company of NY Mary Jane McCartney, Steve Sullivan

s Constellation Power Service, Inc. Robert McKay Ypl Dauphin Island Gathering Partners Katie Rice

e Defense Energy Support Center Veronica Jones, Jacob Moser Ye Department of Energy Christopher Freitas

pr Dominion Exploration and Production, Inc. David Ogden, Gary Weaver, Sheri Heslington Yl Dominion Resources Craig Columbo

pl Dominion Transmission, Inc. Gary Sypolt, Iris King

s DTE Energy Trading, Inc Marcia Hissong

pl Duke Energy Gas Transmission - Texas Eastern Richard Kruse

e Edison Mission Marketing and Trade Christian Hnat, William Roberts

pl El Paso Eastern Pipelines Larry Smith, Mark Gracey Ypl El Paso Natural Gas William Griffith Ypr El Paso Production Company Bill Hebenstreit

pl Enbridge Energy Company, Inc. Terry McGill

pr EnCana Corporation Keith Sappenfield Ys EnCana Marketing (USA) Inc. Keith Sappenfield Yl Energy East Management Corporation Marjorie Perlman

s Energy Velocity Konni Keuter

e Entergy Services, Inc. Arlynn Kelleher, Terry Shields

l Equitable Gas Company Steve Rafferty

pl Equitrans, L.P. Mina Speicher

pr ExxonMobil Gas Marketing Richard Smith, Benjamin C. Harris Ye Florida Power & Light Company Dona Gussow, Joe Stepenovitch Ypl Gas Transmission Northwest Corporation Jay Story

pl Great Lakes Gas Transmission Gene Fava

s Group 8760 Jim Buccigross

pl Gulf South Pipeline Claire Burum, Randy Young

pl H S Resources Inc. Carol Hall

e Imperial Irrigation District William Rapp

pl Iroquois Gas Transmission System Tom Gwilliam

pl Kern River Gas Transmission Company Janie Nielsen Yl KeySpan Energy Dolores Chezar Yl Laclede Gas Co. Kenneth Neises

s Latitude Technologies Leigh Spangler

s Louis Dreyfus Energy Services L.P. Mary Ellen Bell, Ruby H. Melton

e Lower Colorado River Authority Mickey Bell

pr Marathon Oil Company Robin Perrine

pr Mewbourne Oil Company Michael F. Shepard

l National Fuel Gas Distribution Michael Novak Y

Friday, October 20, 2004

NAESB Membership Ratification Ballot for Wholesale Gas Quadrant Recommendation for Request No. R03035A

Wholesale Gas Quadrant

Recommendation for Request No. R03035A

11/1/2004 2

NAESB Member Member Contact Support Oppose Abstain

Friday, October 20, 2004

NAESB Membership Ratification Ballot for Wholesale Gas Quadrant Recommendation for Request No. R03035A

Recommendation for Request No. R03035A

pl National Fuel Gas Supply Corp. Joseph Kardas

pl Natural Gas Pipeline Co of America Paul Love Yl Niagara Mohawk Power Corporation Bruce Garcy

l Nicor Gas Nancy Brucher

l NiSource Inc. M. Christopher Maturo

pl Northern Natural Gas Mary Darveaux

l Northwest Natural Gas Company Randolph Friedman

pl NOVA Gas Transmission Ltd. Doug Miller

pr Occidental Energy Marketing Inc. (OEMI) Carol Wilson

l Pacific Gas & Electric John Breen

l PECO Energy Co. Reed R. Horting, Amy Hamilton Ys Pemex Gas Y Petroquimica Basica Juan Enrique Gonzales Azuara

l Peoples Gas Light & Coke Co. George E. Rieger Ys Platts Bill Murphy

pl Portland General Electric Kathy Davies

pl Portland Natural Gas Transmission System David Morgan

e PPL EnergyPlus, LLC Anne Lovett

e PPM Energy, Inc. Scott Hannigan

s Prospect Energy Lyn Maddox

l Public Service Electric & Gas David Wohlfarth

pl Questar Pipeline Co. Scott Hansen Ys Quorum Business Solutions Inc. Douglas Allen

e Reliant Energy Services, Inc. Gary Hinners, John Orr, Janie Mitcham

pl Sabine Pipe Line LLC Jan Rogers

e Salt River Project Agricultural Improvement & Power District Diane McVicker Ypl SCANA Corporation Jacquelyn Gettle

l Sempra Energy - Southern California Gas Co. Lee Stewart, Rodger Schwecke Ys Sequent Energy Management, L.P. Pat Metteauer Ypl Shell Gas Transmission, LLC Chuck Cook

s SolArc Inc. Tim Curtis

e Southern California Edison Company Roman Bakke Ye Southern Company Services, Inc. Carl Haga

pl Southern Natural Gas Co. Prince McDougal

pl Southern Star Central Gas Pipeline James L. Harder, Dale Sanders Yl Southwest Gas Corporation Larry Black

s SunGard Energy Systems Maria Onufrow, Jennifer Chen

s Telvent USA, Inc. Glenn Irwin

e Tennessee Valley Authority Valerie Crockett Ypl Texas Gas Transmission, LLC Jeff Bittel

e Boeing Company, The Tina Burnett Ys Tiger Natural Gas Tracy Phillips

s Tractebel Energy Marketing, Inc. Mark Hodges

pl TransCanada Pipelines Doug Miller

pl Transwestern Pipeline Co. Donna Scott

s Trinity Apex Systems Matt Armstrong

s TXU Energy Trading Co. Brad Jones

pl TXU Lone Star Pipeline Company Steve Easley

s UBS Energy LLC Suzanne Calcagno

pl Vector Pipeline L.P. Amy Bruhn

l Washington Gas Light Co. Adrian Chapman, Tim Sherwood, Jennifer Deegan Yl Westfield Gas & Electric Light Dept. Joyce Bodak

pl Williams Gas Pipeline Dale Davis, Ron Mucci Ypl Williston Basin Interstate Pipeline Keith Tiggelaar Yl Wisconsin Public Service Corporation Patrick Fox

Total Votes: 31 3 0

RESULTSVotes

SupportingVotes

Opposing Abstentions

Percentage Affirmative

Votes

Wholesale Gas Quadrant Members Voting: 31 3 0 91.18%Total Votes: 31 3 0 91.18%

Appendix 4 Comments

Four sets of comments were prepared for Executive Committee consideration on September 16. Those comments were considered prior to the Executive Committee vote to adopt the standards. Comments submitted by Mirant Comments submitted by Constellation Generation Group Comments submitted by Williston Basin Interstate Pipeline Company Comments submitted by Mewbourne Oil Company

Comments submitted by Constellation Generation Group (CGG)

____________________________

Constellation Generation Group (CGG) would be directly impacted by Request R03035 and therefore has given the proposed standards careful consideration. CGG owns and operates natural gas fired generating units located throughout the continental United States: Florida, Maryland, Illinois, West Virginia, Texas, California and Virginia. Natural gas has become an important component of the nation’s fuel supply in the production of electrical energy. Gas-fired power plants are the marginal source of power in much of country during peak hours in the winter and summer seasons and for selected corners of the country, supply mid-stack generation in the supply curve. Hence, the composition of natural gas feeding into our power plants must be clearly understood at all times and must be stable and predictable!

However, the composition of natural gas consumed at generation power plants is not always stable and predictable. The relatively recent higher price of gas has caused producers to modify the quantity of hydrocarbons removed from gas before it is shipped as well as to entertain other modifications to other traditional production practices. Additionally, new gas supply sources (LNG), - beyond the traditional gas basins – will be growing in importance to the contribution of gas supply. In fact, LNG platforms create a paradigm where gas from totally different sources and slightly different compositions can be brought into the same receiving platform with relative frequency and periodicity. Meanwhile, gas- fired power plants must make (at times costly) modifications to their plants to accommodate each gas source characteristic or producer treatment.

Gas-fired plants must be finely tuned for the gas they are scheduled burn. Gas composition modifications may be accommodated if they are known, but such modifications can be expensive (and always create the need for some expenditure – even if only for investigative man hours). These gas-specific plant modifications are necessary for the safety and efficiency of the gas- fired plants. Therefore, the precise composition of the gas making its way to the plant must be known in advance of its introduction to the plant. As changes are occurring to a gas supply chain, they must also be understood by the plant. Even more disturbing and disruptive for security and reliability of the electrically system is the potential of an unknown fuel composition modification finding its announced way into a plant, thereby causing the potential for plant backfires, internal fires, inefficiency burns and longer term plant damage the causes premature shutdown. Therefore, it is without reservation that CGG believes that NAESB Request R03035 as offered by Florida Power & Light is necessary for the safety and security and long-term efficiency of the wholesale electric power industry.

R03035 approaches this fuel composition issue in a non-intrusive manner. [The fact that gas quality and composition is handed differently in many tariffs is not disturbed.] Without mandating a composition standard(s), it simply sheds needed light on the composition of fuel at appropriate stages. Advanced, transparent knowledge of fuel

composition should self- discipline irregularities in fuel supplies sent up the pipelines to generators. Similar to when the Federal Energy Regulatory Commission imposed public posting requirements for uses of the bulk transmission system, introducing new competitive forces to that environment, introduction of this transparency will create an industry-based, self-discipline to gas composition that is needed at this time.

Sincerely,

Michael Gildea,

Executive Director, Regulatory Affairs

Constellation Generation Group

750 E. Pratt Street

17th Floor

Baltimore, MD 21202

September 13, 2004

North American Energy Standards Board Denise Rager, Membership & Meeting Administrator 1301 Fannin, Suite 2350 Houston, TX 77002 Re: Comments for Proposed NAESB Standard 4.3.s2 Dear Ms. Rager: Williston Basin Interstate Pipeline Company (Williston Basin) is hereby submitting its comments to the WGQ EC members for their consideration before reviewing and considering the proposed standard 4.3.s2 for vote. Williston Basin is concerned there may be a liability issue if the gas quality information customers receive is inaccurate or the data that is provided is not on a timely basis. Due to the nature of reticulated systems, such as Williston Basin's, gas mix and flows can change many times within a gas day and it is difficult to define representative mainline points because the gas mix and flows constantly change. The data provided on the websites for the previous day for a mainline point may not be representative of current gas day flows because of this constant change. If customers make gas flow decisions based upon the gas quality information provided by the pipelines on reticulated systems, the information may well be misrepresentative of the current flow, especially for power peaking that comes in on extremely short notice. Since gas quality information is not monitored at all locations or points on an hourly or even a daily basis, pipelines would need to dedicate additional personnel and/or resources to monitor the mainline points for accuracy because the information would not be of a timely nature, thus adding additional costs to the pipelines. In addition, Williston Basin believes pipelines should not be liable for installing any additional measurement information. Thank you for allowing Williston Basin to submit its comments for consideration. If you have any questions, please call the undersigned at 701-530-1607. Sincerely, Kelly Brooks Transportation Services Manager

Comments of Mewbourne Oil Company On R03035(A) September 14, 2004 Please revise Proposed Standard 4.3.s3 to read as follows: Data provided pursuant to NAESB WGQ Standard No. [S2] should be made available on the Transportation Service Provider’s Web Site for the most recent three-month period at all times. Beyond the initial three-month period, the historical data should be made available offline in accordance with regulatory requirements. This modified language will avoid any ambiguity about whether the data needs only to be provided online for one three-month period. Thanks. Respectfully submitted, /s/ Michael F. Shepard

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