Order No. 717-A was issued on October 15, 2009 to clarify the Standards of Conduct. The following is a list of the clarifications:
Marketing Function & Marketing Function Employee
¶67 An affiliate of an interstate pipeline is not engaged in “marketing functions” under § 358.3(c)(2)(ii) to the extent that such affiliate makes incidental purchases or sales of natural gas to remain in balance under applicable pipeline tariffs.
¶68 De minimis off-system sales that are related to an LDC’s balancing requirements under interstate pipeline tariffs are not included in the definition of marketing function.
¶16 A public utility or interstate natural gas pipeline that does not engage in any transmission transactions with a marketing affiliate should be excluded from the Standards of Conduct. The term “marketing function employee” of a transmission provider does not include an employee of an affiliate that does not engage in transmission transactions on the affiliated transmission provider’s transmission system.
¶17 An employee who makes sales of electric energy is performing a marketing function only if the employee works for a public utility transmission provider or a company affiliated with such a provider.
¶40 If an employee of a generation and transmission cooperative simply serves retail load and does not engage in activities included in the “marketing functions” definition in §358.3, then this employee is not a “marketing function employee.”
¶82 Employees who prepare monthly or annual requests for financial transmission rights and auction revenue rights allocations to hedge the costs of serving load are not actively and personally engaged in sales for resale of these products, but only involved in purchases through requests for financial transmission rights and auction revenue rights allocations, then they are not marketing function employees.
¶83 As long as the supervisor is not actively and personally engaged on a day-to-day basis in the contract negotiations and is simply providing an explanation concerning the disapproval of a contract, the supervisor is not engaged in a marketing function. However, in this scenario, the supervisor remains subject to the No Conduit Rule.
Transmission Function & Transmission Function Employees
¶27 Personnel engaged in “granting or denying transmission service requests” are transmission function employees regardless of the duration of service requested. The Commission also clarifies that “transmission function employee” includes an employee responsible for performing system impact studies or determining whether the transmission system can support the requested services if this type of employee is planning, directing, organizing or carrying out the day-to-day transmission operations.
¶33 Any sale of transmission service under an open access transmission service or a pre-Order No. 888 grandfathered agreement is a transmission function, while any resale or reassignment of such service is a marketing function.
¶135 Information about a planned transmission outage is always transmission function information no matter how far in the future the planned transmission outage will occur.
¶59 The “seller’s own production” exemption encompasses foreign sourced gas regardless of whether the seller owns the mineral rights at the foreign wellhead or acquires ownership on board an LNG vessel, so long as it owns the gas before it enters the transmission provider’s transmission facilities and the gas is the only gas the transmission provider is transporting. If a producer sells gas that was produced by another, it is acting as a marketer of the gas. Furthermore, a gatherer or processor that sells gas from facilities other than its own is a marketer.
¶125 The “transaction specific” exemption is not limited to communications concerning requests for transmission service, but includes communications related to transportation agreements, specific interconnections and new infrastructure needed for the specific request.
¶150 The “LDC exemption” includes, “On-system sales by an intrastate natural gas pipeline, by a Hinshaw interstate pipeline exempt from the Natural Gas Act, by a local distribution company, or by a local distribution company operating under section 7(f) of the Natural Gas Act.” While section 7(f) companies are natural gas companies under the NGA, they function as LDCs and should be treated the same as LDCs for purposes of the LDC exemption under the Standards of Conduct.
Asset Management Agreements
¶63 The releasing shipper is not performing a marketing function when it assigns gas supply pursuant to an asset management agreement. However, if the specific asset management agreement leaves the releasing shipper any ability to conduct sales for resale or provides that the releasing shipper is to retain control of the transactions entered into by the asset manager, the releasing shipper would remain subject to the Independent Functioning Rule with regard to that specific agreement.
¶89 Meetings including both transmission function and marketing function employees are not barred under the Standards of Conduct as long as the meetings do not relate to transmission or marketing functions. However, the No Conduit Rule still applies to these meetings.
¶90 So long as non-public transmission function information is not disclosed between transmission and marketing function employees as part of the development process for reliability standards, then joint meetings including both transmission and marketing function employees are permissible. Similarly, joint meetings including both transmission and marketing function employees to discuss RTO and ISO issues are permissible if nonpublic transmission function information is not disclosed between transmission and marketing function employees. Furthermore, we clarify that transmission function employees and marketing function employees may jointly participate in regulatory and compliance functions, including Federal Energy Regulatory Commission compliance activities, as long as these discussions do not include any disclosure of non-public transmission function information.
Non-Public Transmission Function Information
¶113 Transmission providers may allow their transmission function employees to exchange non-public transmission function information to non-marketing function employees without the need for disclosure.
¶136 Not all generation dispatch and reliability information is non-public transmission function information. Unit economics or rail outage may affect the dispatch of generating units, but that this type of information does not fall within the scope of non-public transmission function information.
¶117 The Internet posting requirements under the Standards of Conduct that it is acceptable to post information on a publicly accessible portion of OASIS that can be reached from a transmission provider’s website by Internet link.
¶123 Transmission providers are not required to post the names of transmission function employees on the Internet.
Books & Records
¶124 A “functional unit” of a transmission provider that performs marketing functions is not required to keep its books separately from those of the transmission provider. However, we note that the No Conduit Rule prohibits a transmission provider from allowing non-public transmission function information to be disclosed to marketing function employees through a joint set of books and records.
¶131 To the extent that information concerning a company’s own generation, load, and generation dispatch is not “transmission function information” as defined in § 358.3(j), then this information may be provided to marketing function employees without being subject to the recordation requirement in § 358.7(h).
¶132 Information related to unit commitment is not “nonpublic transmission function information” per se. However, should transmission function employees inadvertently provide “non-public transmission function information” to the marketing function employees, as transmission function employees work with marketing function employees to develop the unit commitment and dispatch plan, §358.7(h) would require recordation of this inadvertent disclosure.
¶134 For the recordation requirement, names, date, time, duration, and subject matter are sufficient content for purposes of the records. When recording the subject matter, transmission providers should record details that are clear enough to allow the Commission to determine what non-public information was exchanged and why this exchange of information was necessary.
¶140 The training requirement applies to supervisory employees who supervise other employees subject to the Standards or who may come in contact with non-public transmission function information.
¶142 Employees must be trained in Order No. 717 at least every year. A “ year” to mean a calendar year and not “365 days”.