On November 5, 2015, the Federal Energy Regulatory Commission (“FERC”) issued two orders, each of which clarified implementation of FERC’s gas-electric coordination rules adopted in FERC Order No. 787. In proceedings related to PJM’s and NYISO’s implementation of Order No. 787, National Fuel Gas Distribution Corporation (“NFG Distribution”) sought clarification regarding its ability to communicate with third parties to seek operational changes in natural gas transportation or consumption so long as it did not reveal non-public information received from PJM or NYISO.  FERC granted NFG Distribution’s requests for clarification in both proceedings.

In the PJM proceeding, NFG Distribution specifically requested that FERC clarify a July 2015 FERC Order that permitted NFG Distribution “to communicate with its customers and operational counterparties based on confidential operational data received from PJM, so long as it does not reveal, directly or indirectly, the non-public, operational data shared by PJM.”  NFG Distribution sought clarification of this sentence because it was concerned that a potential respondent to NFG Distribution’s request for information could infer that the request was motivated by certain PJM information, and therefore, any response might be considered as passing information to counterparties “indirectly,” meaning that the respondent could run afoul of the Commission’s statement.  In providing the requested clarification, FERC stated that, “[the] reference to ‘indirectly’ does not preclude a local distribution company or intrastate pipeline from issuing a directive or instruction simply because a recipient may be able to infer that the request is based on non-public operational data from PJM.”

In the NYISO proceeding, NFG Distribution sought clarification on whether NFG Distribution could direct its own marketing function employees to take certain steps or make sales of natural gas, even if the employees could infer that the direction was a result of NYISO’s protected information, so long as NFG Distribution did not also convey the protected information it received from NYISO.  NFG Distribution indicated that it hoped such communications would enhance operational performance and system reliability while also remaining in full compliance with the restrictions on the use of the NYISO’s protected data.  Again, FERC provided the requested clarification.  Specifically, FERC stated, “[s]ubject to state regulations, as long as NFG Distribution does not reveal directly or indirectly, the non-public, operational information received from NYISO, NFG Distribution can request or direct employees engaged in marketing functions . . . or who make sales of natural gas to perform specific actions based on such information.”

A copy of the PJM order can be found here.  A copy of the NYISO order can be found here.