MEMORANDUM
PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT
To: Patricia Dunmore, Billing Partner; George Trujillo, Responsible Partner
From: Brett Callahan, Lead Associate; David Stanton, Working Associate
Date: June 2024 (prepared in connection with tariff redesign phase)
Re: NAESB Wholesale Gas Quadrant (WGQ) Version 3.2 Compliance Gap Analysis — Ridgeline Midstream Services LLC, FERC Gas Tariff, Original Volume No. 1
C&H Matter No.: 1016-00005
FERC Docket Nos.: RP22-847-000 (Rate Case); RP22-847-001 (Interconnection)
Client: Dunmore Energy Holdings Ltd. / Ridgeline Midstream Services LLC
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I. Executive Summary
Calderwood & Harkness LLP has prepared this gap analysis memorandum to compare the provisions of Ridgeline Midstream Services LLC's ("Ridgeline") proposed FERC Gas Tariff, Original Volume No. 1, against the requirements of the North American Energy Standards Board ("NAESB") Wholesale Gas Quadrant ("WGQ") Version 3.2 standards. The purpose of this memorandum is to identify each discrete area in which the currently filed tariff either fails to comply or only partially complies with the applicable NAESB WGQ Version 3.2 standards, to propose recommended tariff language changes to cure each deficiency, and to track the incorporation of those changes through the successive tariff redesign drafts prepared in connection with the comprehensive tariff redesign effort underway in FERC Docket No. RP22-847-000.
This memorandum arises in the context of the FERC Office of Energy Market Regulation's Deficiency Letter, issued on January 19, 2023, which identified fourteen (14) discrete deficiency items in Ridgeline's initial tariff filing. This memorandum specifically addresses Deficiency Item 6, which identified incomplete NAESB standards compliance in Ridgeline's operational flow order ("OFO") provisions, and Deficiency Item 7, which identified missing electronic bulletin board ("EBB") posting requirements. The Deficiency Letter observed that Ridgeline's original tariff contained only generalized references to operational balancing and lacked the specificity mandated by the NAESB WGQ standards and by 18 C.F.R. § 284.12. The Deficiency Letter further noted the complete absence of EBB posting provisions, a fundamental requirement for open-access transportation service under Part 284, Subpart G of the Commission's regulations.
Ridgeline's partial response to the Deficiency Letter, filed on March 15, 2023, addressed eight (8) of the fourteen (14) deficiency items. Among the items addressed in the partial response, Deficiency Item 7 was addressed in preliminary fashion, with Ridgeline committing to develop comprehensive EBB posting provisions as part of the tariff redesign. However, Deficiency Item 6 was among the six (6) remaining deficiency items deferred for resolution in the comprehensive tariff redesign, as the resolution of OFO provisions required a more thorough reworking of the tariff's General Terms and Conditions ("GT&Cs") and coordination with operational and engineering personnel.
To support the tariff redesign effort, Ridgeline, at our recommendation, engaged Braswell Energy Consulting Group LLC ("Braswell," engagement number BEC-2023-0041), led by Dr. Raymond Braswell, effective April 15, 2023. Dr. Braswell and his team have provided ongoing technical and regulatory consulting services, including analysis of NAESB WGQ compliance requirements, review of operational flow order design parameters, and assessment of EBB platform technical specifications. This memorandum incorporates Braswell's technical recommendations and reflects the collaborative work product of the Calderwood & Harkness legal team, the Braswell consulting team, and Ridgeline's internal regulatory and operations staff.
The current near-final working version of the redesigned tariff is the Fourth Draft, dated November 2024. The Fourth Draft has incorporated all of the recommendations set forth in this memorandum, and our review indicates that all previously identified areas of non-compliance or partial compliance have been addressed in the Fourth Draft's tariff language. The Fourth Draft is currently undergoing final legal review and operational feasibility confirmation.
The filing deadline for the comprehensive tariff redesign is February 21, 2025, as established by Administrative Law Judge Clara Whitfield's order of March 4, 2024, granting Ridgeline's third extension of the filing deadline. Judge Whitfield's order imposed conditions on the extension, including the filing of quarterly status reports detailing progress on the tariff redesign and the remaining unresolved deficiency items. Ridgeline has filed quarterly status reports in June 2024, September 2024, and December 2024 (the December 2024 report is currently in preparation), each confirming progress toward the February 21, 2025 filing deadline.
In summary, our comprehensive gap analysis has identified twenty-three (23) discrete areas of non-compliance or partial compliance with NAESB WGQ Version 3.2 standards in Ridgeline's originally filed tariff. Of these, eight (8) areas were classified as Non-Compliant (tariff language absent or materially deviating from the applicable standard), twelve (12) areas were classified as Partially Compliant (tariff language addressed the standard area but omitted required elements or used non-conforming language), and three (3) areas were already Compliant in the original filing (relating to minor or ancillary standards). Recommended tariff language changes have been developed for each of the twenty (20) non-compliant or partially compliant areas, and all twenty-three (23) areas have been addressed in the Fourth Draft of the redesigned tariff.
II. Background
A. The FERC Proceeding
Ridgeline Midstream Services LLC is a Delaware limited liability company organized under the laws of the State of Delaware and a wholly owned subsidiary of Dunmore Energy Holdings Ltd. ("DEH"), a Cayman Islands exempted limited company (Cayman Islands company registration number CR-381204). DEH is a privately held strategic energy company with operations and investments spanning midstream infrastructure, natural gas gathering and processing, and renewable energy development across the Appalachian Basin and Mid-Atlantic region.
On May 12, 2022, Ridgeline filed its application with the Federal Energy Regulatory Commission ("FERC" or the "Commission") for initial tariff rate authorization and interconnection authorization under Section 7(c) of the Natural Gas Act and Part 157 of the Commission's regulations, as well as blanket transportation authority under Part 284, Subpart G. The application was designated as FERC Docket No. RP22-847-000 (Rate Case) and FERC Docket No. RP22-847-001 (Interconnection). Ridgeline proposed to establish an initial open-access transportation tariff, designated as FERC Gas Tariff, Original Volume No. 1, governing the provision of firm (Rate Schedule FT-1) and interruptible (Rate Schedule IT-1) transportation service on the Ridgeline Pipeline System.
The Ridgeline Pipeline System consists of approximately 187 miles of 24-inch-diameter high-pressure natural gas transmission pipeline extending from the Wetzel County Interconnect, located in Wetzel County, West Virginia, to the Waynesburg Compressor Station, located in Greene County, Pennsylvania. The system is designed to transport natural gas produced in the Marcellus and Utica shale formations of northern West Virginia and southwestern Pennsylvania to downstream markets via interconnection with the Appalachian Trunk Pipeline Company, LLC ("ATPC") system at the Wetzel County Interconnect.
The Ridgeline Pipeline System has a design capacity of 1.2 billion cubic feet per day ("Bcf/d"), equivalent to 1,200,000 dekatherms per day ("Dth/d"). As of the date of this memorandum, current throughput on the system averages approximately 680 million cubic feet per day ("MMcf/d"), representing approximately 56.67% utilization of design capacity. The system includes three compressor stations:
(i) Wetzel Station, located at the southern terminus of the pipeline in Wetzel County, West Virginia, adjacent to the Wetzel County Interconnect;
(ii) Mannington Station, located at approximately Milepost 87 of the Ridgeline system in Marion County, West Virginia; and
(iii) Waynesburg Station, located at the northern terminus of the pipeline at the Waynesburg Compressor Station in Greene County, Pennsylvania.
The three compressor stations have an aggregate installed compression capacity of 45,000 horsepower ("HP"). The pipeline entered commercial in-service on October 1, 2021, and has operated continuously since that date.
Ridgeline's tariff filing proposed open-access transportation service under Part 284, Subpart G of the Commission's regulations. The proposed tariff is designated as FERC Gas Tariff, Original Volume No. 1, and includes Rate Schedules FT-1 (Firm Transportation) and IT-1 (Interruptible Transportation), along with General Terms and Conditions governing all aspects of service on the Ridgeline Pipeline System.
Ridgeline's FERC Code is 960442. Ridgeline's principal office is located at 700 Kanawha Boulevard East, Suite 1400, Charleston, West Virginia 25301. Ridgeline's registered agent for service of process in Delaware is Capitol Filings Inc., located at 1209 Orange Street, Wilmington, Delaware 19801. Ridgeline's Employer Identification Number is 87-4231956.
B. The Deficiency Letter
On January 19, 2023, the FERC Office of Energy Market Regulation issued a Deficiency Letter in Docket No. RP22-847-000, identifying fourteen (14) discrete deficiency items in Ridgeline's initial tariff filing. The Deficiency Letter was issued under the supervision of Dr. Miriam Okafor, Lead Economic Analyst, and Jonathan Briggs, Lead Trial Attorney, both of the Office of Energy Market Regulation's Division of Pipeline Regulation.
The fourteen deficiency items encompassed a broad range of tariff provisions, including rate design, cost-of-service methodology, operational terms, and regulatory compliance matters. This memorandum specifically addresses two of the fourteen items:
Deficiency Item 6: Incomplete NAESB Standards Compliance in Operational Flow Order Provisions. The Deficiency Letter stated that Ridgeline's original tariff's OFO provisions did not conform to the NAESB WGQ standards for scheduling, nominations, capacity release, imbalance management, and flowing gas provisions. Specifically, the FERC staff observed that the tariff contained only a generalized reference to "operational balancing" and lacked the specificity required by NAESB WGQ Version 3.2, including defined OFO stages, tolerance bands, escalating penalty structures, and notification requirements. The staff noted that compliance with Order No. 587 and its progeny requires that pipeline tariffs incorporate NAESB WGQ standards with sufficient specificity to provide shippers with clear and predictable operational guidelines.
Deficiency Item 7: Missing Electronic Bulletin Board (EBB) Posting Requirements. The Deficiency Letter stated that Ridgeline's original tariff lacked comprehensive EBB posting provisions as required by NAESB WGQ standards and 18 C.F.R. § 284.12. The staff noted the complete absence of any tariff provision requiring Ridgeline to maintain an EBB, to post available capacity information, to post OFO notices, or to post capacity release information. The staff observed that EBB requirements are a fundamental component of the Commission's open-access transportation framework and that the absence of such provisions rendered Ridgeline's tariff materially incomplete.
Ridgeline filed a partial response to the Deficiency Letter on March 15, 2023, addressing eight (8) of the fourteen (14) deficiency items. Among the items addressed, Deficiency Item 7 was addressed in preliminary fashion, with Ridgeline committing to develop comprehensive EBB posting provisions and providing an initial outline of proposed EBB content. However, Deficiency Item 6 was among the six (6) remaining items deferred for resolution in the comprehensive tariff redesign. The remaining unresolved items required more substantial revisions to the tariff's GT&Cs and coordination with Ridgeline's operational and engineering teams, as well as with Braswell Energy Consulting Group.
The proceeding has been subject to multiple extensions of the filing deadline. Following the initial Deficiency Letter, ALJ Whitfield granted Ridgeline's first extension on June 2, 2023, and a second extension on September 8, 2023. The proceeding was substantially dormant between September 2023 and March 2024, as Ridgeline focused on the tariff redesign effort. On March 4, 2024, ALJ Whitfield granted Ridgeline's third extension, establishing the current filing deadline of February 21, 2025, subject to conditions including the filing of quarterly status reports detailing progress on the tariff redesign and the remaining unresolved deficiency items.
C. Applicable Regulatory Framework
The regulatory framework governing NAESB compliance for interstate natural gas pipelines is established by FERC Order No. 587, issued in 1996, and its successive amendments, Orders No. 587-B through 587-W, which collectively require interstate natural gas pipelines to incorporate NAESB WGQ business practice standards into their tariffs. The Commission's policy rationale for mandating NAESB compliance is rooted in the promotion of standardization, efficiency, and transparency in the wholesale natural gas market, consistent with the Commission's open-access transportation framework established by Order Nos. 436 and 636.
The specific regulatory requirement for NAESB compliance is codified at 18 C.F.R. § 284.12(a), which provides that each interstate pipeline that transports gas under Subpart B or G of Part 284 must comply with the business practice standards adopted by NAESB's Wholesale Gas Quadrant and incorporated by reference by the Commission. The Commission has incorporated NAESB WGQ Version 3.2 standards by reference, making them binding on all jurisdictional pipelines.
NAESB WGQ Version 3.2 encompasses a comprehensive set of business practice standards governing the following functional areas of pipeline operations:
• Nominations and scheduling (WGQ Standard 1.3)
• Flowing gas provisions, including OFOs and critical period management (WGQ Standard 1.4)
• Invoicing (WGQ Standard 2.3)
• Data sets and data elements (WGQ Standard 3.3)
• Internet electronic transport / electronic bulletin board (WGQ Standard 4.3)
• Capacity release (WGQ Standard 5.3)
• Imbalance management (WGQ Standard 6.3)
These standards establish minimum requirements that pipelines must incorporate into their tariffs. While pipelines retain discretion to adopt provisions that exceed the NAESB minimum requirements, they may not adopt provisions that are less protective of shipper rights or less transparent than the NAESB standards require.
The interplay between NAESB WGQ standards and the Commission's open-access requirements under Part 284, Subpart G, is significant. The Commission has repeatedly emphasized that NAESB compliance is an integral component of the open-access framework and that failure to comply with NAESB standards constitutes a material deficiency in a pipeline's tariff. See, e.g., Tennessee Gas Pipeline Co., L.L.C., 150 FERC ¶ 61,161 (2015); Larkspur Holdings, 149 FERC ¶ 61,225 (2014). The Commission has also issued policy statements and guidance letters clarifying specific aspects of NAESB compliance, including the timing and content of EBB postings, the structure of OFO provisions, and the integration of capacity release procedures with nomination and scheduling cycles.
D. Parties to the Proceeding
In addition to Ridgeline as the applicant and FERC Trial Staff (represented by Jonathan Briggs, Lead Trial Attorney, and Dr. Miriam Okafor, Lead Economic Analyst), the following parties have intervened in the proceeding:
Appalachian Trunk Pipeline Company, LLC ("ATPC"). ATPC is an interstate natural gas pipeline company that owns and operates a 640-mile, 3.8 Bcf/d interstate natural gas transmission system serving markets in the Appalachian Basin and Mid-Atlantic region. ATPC is the interconnecting pipeline at the Wetzel County Interconnect, which is the sole receipt point on the Ridgeline Pipeline System. ATPC's FERC Code is 840117. ATPC is represented by the law firm of Kellner, Royce & Dillard LLP, with William Pratt, senior partner, serving as lead counsel. ATPC filed a protest on August 15, 2022, which focused primarily on interconnection cost allocation, involving a dispute of approximately $14.7 million in shared interconnection facility costs, but also raised concerns regarding scheduling and nomination procedures at the Wetzel County Interconnect and the need for bilateral coordination of NAESB-compliant operational provisions.
Mountainside Gas Producers Coalition ("MGPC"). MGPC is a coalition of fourteen (14) independent natural gas producers operating in the Marcellus and Utica shale formations of West Virginia and Pennsylvania. MGPC's members are current or prospective shippers on the Ridgeline Pipeline System. MGPC is represented by the law firm of Whitmore & Sable LLP, with Rebekah Montague, partner, serving as lead counsel. MGPC filed answering testimony on January 9, 2023, which included the testimony of Dr. Eleanor Vasquez, MGPC's rate expert, who raised certain NAESB compliance concerns in the context of shipper rights, particularly with respect to imbalance management, OFO penalty structures, and the equitable treatment of producer-shippers in nomination and scheduling priority.
Clearwater Municipal Gas Authority ("CMGA"). CMGA is a municipal gas distribution authority serving residential and commercial customers in southwestern Pennsylvania. CMGA is a prospective shipper on the Ridgeline Pipeline System and has intervened to ensure that the tariff provides adequate protections for municipal gas distribution companies. CMGA is represented by Fordham Municipal Law Group PC, with Stephen Greer, principal, serving as lead counsel. CMGA's intervention focused primarily on rate design and cost allocation issues but included concerns regarding EBB access and the availability of capacity information for smaller shippers.
III. Methodology
This gap analysis was performed on a provision-by-provision basis, comparing each relevant provision of Ridgeline's FERC Gas Tariff, Original Volume No. 1 (as originally filed on May 12, 2022, and as revised through successive tariff redesign drafts) against the applicable requirements of NAESB WGQ Version 3.2. The analysis covers the following NAESB WGQ standard areas:
1. Nominations and Scheduling — WGQ Standard 1.3 (including sub-standards 1.3.1 through 1.3.7), governing nomination timelines, nomination cycles, data elements, confirmation protocols, bumping and priority of service, and scheduling procedures.
2. Flowing Gas Provisions — WGQ Standard 1.4 (including sub-standards 1.4.1 through 1.4.5), governing operational flow orders, OFO issuance criteria, tolerance bands, penalty structures, critical period provisions, and planned maintenance scheduling and posting requirements.
3. Invoicing — WGQ Standard 2.3 (including sub-standards 2.3.1 and 2.3.2), governing invoice content, data elements, delivery timelines, and electronic delivery standards.
4. Data Sets and Data Elements — WGQ Standard 3.3 (including sub-standards 3.3.1 and 3.3.2), governing standardized data sets for nominations, confirmations, and scheduling, and standardized location identifiers.
5. Internet Electronic Transport / Electronic Bulletin Board (EBB) — WGQ Standard 4.3 (including sub-standards 4.3.1 through 4.3.4), governing EBB posting obligations, platform design specifications, posting timing requirements, and standards of conduct for non-discriminatory EBB access.
6. Capacity Release — WGQ Standard 5.3 (including sub-standards 5.3.1 through 5.3.4), governing capacity release posting, bidding procedures, prearranged releases, recall/reput rights, creditworthiness, duration and pricing, award notification, and integration with nomination cycles.
7. Imbalance Management — WGQ Standard 6.3 (including sub-standards 6.3.1 and 6.3.2), governing daily and monthly imbalance tracking, netting, cash-out provisions, imbalance trading, penalty structures, and shipper imbalance reporting.
8. Operational Flow Orders and Critical Periods — Included within WGQ Standards 1.3 and 6.3 and addressed as a cross-cutting issue.
The analysis covers both the originally filed tariff (May 12, 2022 filing) and the four successive tariff redesign drafts prepared as part of the comprehensive tariff redesign effort:
• First Draft — August 2023
• Second Draft — January 2024
• Third Draft — June 2024
• Fourth Draft — November 2024 (current near-final working version)
Each identified area of non-compliance or partial compliance was classified according to the following compliance classification scheme:
• Compliant: Tariff language fully conforms to NAESB WGQ Version 3.2 in all material respects. No changes are required or recommended.
• Partially Compliant: Tariff language addresses the relevant standard area but omits one or more required elements or uses language that does not fully conform to the NAESB WGQ Version 3.2 standard. Changes are required to achieve full compliance.
• Non-Compliant: Tariff language is entirely absent or materially deviates from the applicable NAESB WGQ Version 3.2 standard. Substantial additions or revisions to the tariff are required.
The gap analysis was conducted in coordination with the following individuals:
• Dr. Raymond Braswell, Principal, Braswell Energy Consulting Group LLC (engagement number BEC-2023-0041) — Dr. Braswell provided technical and regulatory consulting support on NAESB WGQ operational standards, including OFO design parameters, imbalance management methodologies, and EBB technical specifications.
• Dr. Natasha Orlov, Director of Rates & Regulatory, Ridgeline Midstream Services LLC — Dr. Orlov provided input on rate design implications of NAESB compliance provisions, including the impact of OFO penalty revenues, imbalance cash-out revenues, and EBB maintenance costs on the cost-of-service model.
• Thomas Greaves, Vice President, Engineering & Operations, Ridgeline Midstream Services LLC — Mr. Greaves provided input on the operational feasibility of proposed NAESB-compliant scheduling, nomination, and OFO provisions, including system capabilities at the three compressor stations, SCADA integration requirements, and interconnection coordination with ATPC.
IV. Gap Analysis — Nominations and Scheduling (WGQ Standard 1.3)
A. Nomination Timelines and Cycles
NAESB WGQ Standard 1.3.2 requires that interstate natural gas pipelines provide four intraday nomination cycles for the scheduling of transportation service. The four required nomination cycles, with their associated deadlines expressed in Central Clock Time ("CCT"), are as follows:
(i) Timely Nomination Cycle — Nominations must be submitted by 11:30 AM CCT on the day prior to the gas day. The pipeline must provide scheduled quantities by 4:30 PM CCT on the nomination day.
(ii) Evening Nomination Cycle — Nominations must be submitted by 6:00 PM CCT on the day prior to the gas day. The pipeline must provide scheduled quantities by 9:00 PM CCT on the nomination day.
(iii) Intraday 1 Nomination Cycle — Nominations must be submitted by 10:00 AM CCT on the gas day. The pipeline must provide scheduled quantities by 2:00 PM CCT on the gas day. Intraday 1 nominations become effective at 2:00 PM CCT on the gas day.
(iv) Intraday 2 Nomination Cycle — Nominations must be submitted by 5:00 PM CCT on the gas day. The pipeline must provide scheduled quantities by 8:00 PM CCT on the gas day. Intraday 2 nominations become effective at 8:00 PM CCT on the gas day.
The purpose of the four-cycle nomination framework is to provide shippers with flexibility to adjust their transportation quantities during the gas day in response to changing market conditions, supply and demand variations, and operational requirements. The Commission has emphasized the importance of intraday nomination cycles in promoting market efficiency and reducing imbalances. See Order No. 587-V, 134 FERC ¶ 61,053 (2011).
Original Tariff Status: Partially Compliant. The original tariff filed on May 12, 2022, included provisions for only two nomination cycles: the Timely Nomination Cycle and the Evening Nomination Cycle. The tariff did not include provisions for the Intraday 1 or Intraday 2 nomination cycles, thereby omitting two of the four required nomination windows. The tariff's nomination timeline provisions were located in GT&C Section 5.2 but lacked the specificity required by WGQ 1.3.2 with respect to deadline times, scheduled quantity notification timelines, and effective times for intraday nominations.
The omission of Intraday 1 and Intraday 2 nomination cycles represents a significant departure from NAESB WGQ Version 3.2 and denies shippers the flexibility intended by the four-cycle framework. This omission was identified by FERC staff in connection with Deficiency Item 6, which broadly addressed NAESB compliance in operational provisions, and was also referenced in Dr. Eleanor Vasquez's testimony on behalf of MGPC, which noted that producer-shippers require intraday flexibility to manage production variations and avoid unnecessary imbalance penalties.
Recommended Change: We recommend that Ridgeline revise GT&C Section 5.2 to specify all four nomination cycles with NAESB-compliant deadlines. The revised provision should include clear definitions of each nomination cycle, the applicable submission deadlines in CCT, the pipeline's obligations to provide scheduled quantities within the specified timeframes, and the effective times at which intraday nominations take effect. Additionally, the tariff should specify the nomination format and submission methodology (electronic submission via EBB or other NAESB-compliant electronic means).
Dr. Braswell has confirmed that the Ridgeline Pipeline System's SCADA infrastructure and scheduling software are capable of supporting four intraday nomination cycles without material system modifications. Mr. Greaves has confirmed that the operational personnel at the three compressor stations can manage the increased scheduling activity associated with four nomination cycles, subject to minor staffing adjustments at the Wetzel Station gas control center.
Status in Fourth Draft (November 2024): Compliant. The Fourth Draft of the redesigned tariff incorporates all four nomination cycles in revised GT&C Section 5.2, with NAESB-compliant deadlines, scheduled quantity notification timelines, and effective times for intraday nominations. The language in the Fourth Draft has been reviewed by Dr. Braswell and confirmed to be consistent with NAESB WGQ 1.3.2 in all material respects.
B. Nomination Data Elements
NAESB WGQ Standard 1.3.3 specifies the required data elements that must be included in a nomination for transportation service. These data elements include, but are not limited to, the following:
• Shipper identification code
• Contract identification number
• Receipt point identification (using NAESB-compliant location identifiers)
• Delivery point identification (using NAESB-compliant location identifiers)
• Nominated quantities (in Dth)
• upstream entity identification code (for confirmations with upstream interconnecting pipelines or supply points)
• Downstream entity identification code (for confirmations with downstream interconnecting pipelines or delivery points)
• Package identification
• Rank and priority of nomination
The purpose of standardized nomination data elements is to facilitate electronic processing of nominations, enable automated confirmation with upstream and downstream entities, and ensure consistency and accuracy in the scheduling process.
Original Tariff Status: Partially Compliant. The original tariff included basic nomination data element requirements in GT&C Section 5.3, specifying shipper ID, contract number, receipt and delivery points, and nominated quantities. However, the original tariff omitted specification of upstream and downstream entity confirmation requirements, which are essential for automated confirmation processing at interconnection points. The original tariff also did not reference NAESB-compliant data element coding standards.
This omission is particularly relevant to the Ridgeline Pipeline System because the sole receipt point — the Wetzel County Interconnect — is an interconnection with ATPC, and the delivery point at the Waynesburg Compressor Station may involve downstream deliveries to local distribution companies or other pipelines. Effective nomination processing requires that the nomination data include the upstream entity code for ATPC (FERC Code 840117) at the receipt point and any applicable downstream entity codes at the delivery point.
Recommended Change: We recommend that Ridgeline revise GT&C Section 5.3 to incorporate the full set of required data elements specified by NAESB WGQ 1.3.3. The revised provision should expressly require the inclusion of upstream and downstream entity identification codes in all nominations, and should specify the use of NAESB-compliant data element coding standards. Additionally, the tariff should cross-reference the NAESB WGQ 3.3 standardized data set requirements to ensure consistency between nomination data elements and the pipeline's electronic data exchange infrastructure.
Status in Fourth Draft (November 2024): Compliant. The Fourth Draft includes the full NAESB WGQ 1.3.3 data element set in revised GT&C Section 5.3, including upstream and downstream entity codes and NAESB-compliant data element coding standards.
C. Confirmation and Scheduling Protocols
NAESB WGQ Standard 1.3.4 establishes detailed scheduling confirmation timelines governing the process by which pipelines confirm nominated quantities with shippers, upstream entities, and downstream entities. The standard requires pipelines to implement a structured confirmation process that coordinates with the four nomination cycles described in WGQ 1.3.2, and to provide shippers with timely notification of confirmed scheduled quantities.
The confirmation process is integral to the efficient operation of the nomination and scheduling system, as it ensures that all parties to a transaction — the shipper, the transporting pipeline, and the interconnecting entities — agree on the quantities to be transported before the gas day commences (for Timely and Evening cycles) or before the effective time of an intraday nomination.
Original Tariff Status: Non-Compliant. The original tariff did not include any confirmation protocol in the General Terms and Conditions. GT&C Sections 5.1 through 5.7 addressed nominations, scheduling, and related matters, but no provision addressed the confirmation process, including confirmation deadlines, the methodology for resolving discrepancies between nominated and confirmed quantities, or the pipeline's obligations to notify shippers of scheduling reductions. This represented a complete gap in the tariff's nomination and scheduling framework.
The absence of confirmation protocols is particularly significant at the Wetzel County Interconnect, where Ridgeline's pipeline interconnects with ATPC's 30-inch mainline at ATPC Milepost 412.6. Effective scheduling at this interconnection point requires bilateral confirmation procedures between Ridgeline and ATPC to ensure that nominated quantities at the receipt point are confirmed by both pipelines. Without such procedures, scheduling discrepancies between the two pipelines could result in mismatched quantities, gas imbalances, and operational disruptions.
Recommended Change: We recommend that Ridgeline add new GT&C sections addressing confirmation deadlines, the process for resolving discrepancies between nominated and confirmed quantities, bumping priorities for scheduling reductions, and the pipeline's obligations to notify shippers of confirmed scheduled quantities within the timeframes specified by WGQ 1.3.4. Additionally, the tariff should include provisions for bilateral confirmation at interconnection points, including the Wetzel County Interconnect, and should cross-reference the applicable provisions of the Interconnection Agreement between Ridgeline and ATPC (Version 3.0, April 2023).
The Interconnection Agreement (Version 3.0) currently contains its own confirmation provisions in Article VI, but those provisions do not expressly cross-reference the tariff's scheduling provisions. We recommend that the Interconnection Agreement be amended to include an express cross-reference to the tariff's NAESB-compliant scheduling provisions, and that the tariff similarly cross-reference the Interconnection Agreement's confirmation procedures at the Wetzel County Interconnect.
Status in Fourth Draft (November 2024): Compliant. The Fourth Draft includes comprehensive confirmation and scheduling protocols in new GT&C Sections 5.8 through 5.12, with express cross-references to the Interconnection Agreement and NAESB WGQ 1.3.4 requirements.
D. Bumping and Priority of Service
NAESB WGQ Standard 1.3.5 establishes the priority of service framework for scheduling purposes, which determines the order in which nominations are scheduled when the pipeline's available capacity is insufficient to accommodate all nominations. The standard requires pipelines to implement a bumping process that respects the following priority hierarchy:
(i) Primary firm nominations (nominations by firm shippers at their primary receipt and delivery points) receive the highest priority.
(ii) Secondary firm nominations (nominations by firm shippers at secondary or alternate receipt and delivery points, if permitted under the tariff) receive the next-highest priority.
(iii) Overrun nominations (nominations by firm shippers for quantities in excess of their contracted firm capacity) receive priority below secondary firm nominations.
(iv) Interruptible nominations (nominations by interruptible shippers) receive the lowest scheduling priority and are subject to bumping by firm nominations at any time.
The bumping process ensures that firm shippers are protected from displacement by lower-priority nominations and that the pipeline allocates its available capacity in a manner consistent with the Commission's open-access principles and the contractual rights of firm shippers.
Original Tariff Status: Partially Compliant. The original tariff referenced the distinction between firm (FT-1) and interruptible (IT-1) service priorities in Rate Schedules FT-1 and IT-1 and in GT&C Section 6.1. However, the tariff did not specify NAESB-compliant bumping procedures, did not distinguish between primary-path, secondary-path, and overrun nominations for scheduling priority purposes, and did not describe the process by which lower-priority nominations would be reduced or displaced when capacity constraints arise.
Recommended Change: We recommend that Ridgeline add detailed bumping provisions to the GT&Cs per WGQ 1.3.5, distinguishing among primary-path firm, secondary-path firm, overrun, and interruptible nominations, and specifying the order and methodology by which scheduling reductions are applied when capacity is constrained. The bumping provisions should be coordinated with the segmentation and flexible receipt/delivery point provisions that are being developed in connection with Deficiency Item 12.
Status in Fourth Draft (November 2024): Compliant. The Fourth Draft includes comprehensive bumping and priority of service provisions in revised GT&C Section 6, consistent with NAESB WGQ 1.3.5.
V. Gap Analysis — Flowing Gas Provisions (WGQ Standard 1.4)
A. Operational Flow Orders (OFOs) — Deficiency Item 6 Core Issue
NAESB WGQ Standards 1.4.1 through 1.4.3 establish the framework for operational flow orders, which are directives issued by a pipeline to shippers requiring them to adjust their receipts and deliveries to bring their transportation in line with their scheduled quantities or to address system operational concerns. The WGQ standards specify OFO issuance criteria, tolerance bands within which shippers must maintain their flowing gas relative to their scheduled quantities, and escalating penalty structures for shipper non-compliance with OFOs.
The OFO framework is a critical component of pipeline operational management, as it provides the pipeline with the tools necessary to maintain system integrity and pressure balance while also protecting shipper rights through clearly defined tolerance bands and transparent penalty structures. The Commission has repeatedly emphasized the importance of well-designed OFO provisions in pipeline tariffs. See, e.g., Crowne Albany Group, LLC, 158 FERC ¶ 61,125 (2017) (approving revised OFO provisions incorporating NAESB-compliant tolerance bands and penalty structures).
Original Tariff Status: Non-Compliant. This was the specific deficiency identified as Item 6 in the January 19, 2023 Deficiency Letter. The original tariff contained only a generalized reference to "operational balancing" in GT&C Section 14.1, which stated that "Transporter may take such actions as it deems necessary to maintain operational integrity of the Pipeline System, including requiring Shippers to adjust their receipts and/or deliveries." This provision failed to meet the NAESB WGQ requirements in multiple respects:
(i) The provision did not define OFO stages (Stage 1, Stage 2, etc.) or specify the circumstances under which each stage would be invoked.
(ii) The provision did not establish tolerance bands within which shippers were required to maintain their flowing gas relative to their scheduled quantities.
(iii) The provision did not include an escalating penalty structure for shipper non-compliance with OFOs, leaving shippers with no clear understanding of the financial consequences of OFO violations.
(iv) The provision did not address the posting and notification requirements for OFOs, including EBB posting and direct shipper notification.
(v) The provision did not address OFO penalty revenue crediting, i.e., the disposition of revenues collected from OFO penalties.
(vi) The provision granted the pipeline unrestricted discretion to "take such actions as it deems necessary," without providing for FERC review of OFO issuance criteria or limiting the pipeline's discretion through objective, quantifiable standards.
The Deficiency Letter specifically noted that the generalized "operational balancing" provision was insufficient and directed Ridgeline to revise its tariff to include NAESB-compliant OFO provisions. FERC staff observed that the lack of defined OFO stages and tolerance bands creates uncertainty for shippers and may result in arbitrary or discriminatory application of operational balancing requirements.
Recommended Changes: We recommend the following comprehensive revisions to the tariff's OFO provisions:
(a) Define OFO Stages. The revised tariff should define at minimum two OFO stages — Stage 1 (moderate operational concern) and Stage 2 (critical operational concern) — with specified tolerance bands for each stage. Based on Dr. Braswell's analysis of the Ridgeline Pipeline System's operational characteristics and industry precedent, we recommend the following tolerance bands:
• Stage 1 OFO: Shippers must maintain their daily flowing gas within ±5% of their scheduled quantities. A shipper whose flowing gas deviates from its scheduled quantities by more than 5% is subject to Stage 1 OFO penalties.
• Stage 2 OFO: Shippers must maintain their daily flowing gas within ±0% of their scheduled quantities (i.e., flowing gas must exactly match scheduled quantities, subject to metering tolerances). A shipper whose flowing gas deviates from its scheduled quantities by any amount is subject to Stage 2 OFO penalties.
(b) Specify OFO Issuance Criteria. The revised tariff should define objective criteria for the issuance of OFOs, including system linepack levels, compressor station operating parameters, interconnection point flow deviations, and other measurable operational indicators. The issuance criteria should be sufficiently specific to limit pipeline discretion and provide shippers with predictable operational guidelines. The tariff should also provide for FERC review of OFO issuance criteria upon shipper complaint.
(c) Include Escalating Penalty Schedule. The revised tariff should include an escalating penalty schedule per NAESB WGQ 1.4.2, with Stage 2 penalties set at a higher rate than Stage 1 penalties to incentivize shipper compliance during critical operational periods. The penalty schedule should reference a published price index (e.g., Drayton Health IT or Beaumont Systems) to ensure transparency and market-based pricing.
(d) Specify OFO Posting and Notification Requirements. The revised tariff should require Ridgeline to post OFO notices on the EBB immediately upon issuance and to provide direct notification to affected shippers by electronic mail, facsimile, or other expedited communication method. The posting and notification requirements should cross-reference the EBB provisions in GT&C Section 10 (WGQ 4.3 compliance).
(e) Address OFO Penalty Revenue Crediting. The revised tariff should specify the disposition of revenues collected from OFO penalties. This provision should cross-reference Deficiency Item 10, which was addressed in the March 15, 2023 partial response and which established that OFO penalty revenues would be credited to non-offending shippers on a pro rata basis. The NAESB-compliant OFO provisions should be consistent with the penalty revenue crediting mechanism established in the partial response.
(f) Provide for FERC Review. The revised tariff should include a provision stating that the pipeline's OFO issuance criteria and penalty structures are subject to review by the Commission upon complaint by any affected shipper or upon the Commission's own motion.
Status in Fourth Draft (November 2024): Compliant. The Fourth Draft of the redesigned tariff includes comprehensive OFO provisions in revised GT&C Section 14, incorporating all of the recommended changes described above. The Fourth Draft establishes a two-stage OFO structure with ±5% (Stage 1) and ±0% (Stage 2) tolerance bands, an escalating penalty schedule indexed to Drayton Health IT pricing points, EBB posting and direct notification requirements, a penalty revenue crediting mechanism consistent with Deficiency Item 10, and a provision for FERC review of OFO issuance criteria. Dr. Braswell and Mr. Greaves have reviewed the Fourth Draft OFO provisions and confirmed their consistency with operational practices and system capabilities.
B. Critical Period Provisions
NAESB WGQ Standard 1.4.4 establishes requirements for system emergency and critical period notification. The standard requires pipelines to define the conditions constituting a "Critical Period" or "System Emergency," to establish notification procedures for informing shippers and the public of such conditions, and to specify the curtailment priorities that apply during critical periods.
Critical period provisions serve an important operational function by establishing a structured framework for managing extreme system stress events, such as unusually high demand during cold weather, supply disruptions, compressor station outages, or interconnection point capacity constraints. Without clearly defined critical period provisions, the pipeline's response to system emergencies may be ad hoc and potentially discriminatory.
Original Tariff Status: Non-Compliant. The original tariff did not contain any definition of "Critical Period" or "System Emergency" and did not include any notification timeline or curtailment priority provisions applicable during such events. The general "operational balancing" provision in GT&C Section 14.1, discussed above in connection with Deficiency Item 6, was the only provision that addressed system operational concerns, and it lacked the specificity required by WGQ 1.4.4.
Operational Considerations. While the Ridgeline Pipeline System currently operates at approximately 56.67% utilization (approximately 680 MMcf/d against a design capacity of 1.2 Bcf/d), which provides substantial headroom during normal operations, the system may experience stress during peak periods. In particular, the bidirectional interconnection capacity at the Wetzel County Interconnect is limited to 800 MMcf/d, which is less than the pipeline's design capacity of 1.2 Bcf/d. During peak demand periods or in the event of a compressor station outage (particularly at the Wetzel Station, which is located adjacent to the interconnect), available capacity at the interconnect could become constrained, triggering the need for critical period management. Defined critical period protocols are essential to managing such scenarios in a transparent and non-discriminatory manner.
Recommended Change: We recommend that Ridgeline add new tariff definitions for "Critical Period" and "System Emergency" in the Definitions section of the GT&Cs, with defined criteria for the declaration of each. We further recommend the addition of new GT&C sections specifying notification timelines (including EBB posting and direct shipper notification), curtailment priority provisions (consistent with the bumping and priority of service provisions under WGQ 1.3.5), and provisions for the restoration of service following the conclusion of a critical period.
Status in Fourth Draft (November 2024): Compliant. The Fourth Draft includes defined terms and comprehensive critical period provisions in GT&C Sections 14.5 through 14.8.
C. Force Majeure and Planned Maintenance
NAESB WGQ Standard 1.4.5 establishes requirements for maintenance scheduling and posting. The standard requires pipelines to post planned maintenance activities on the EBB in advance, to provide sufficient notice to shippers to allow them to adjust their nominations and scheduling, and to update postings when changes occur to maintenance schedules. The standard complements the pipeline's force majeure provisions by establishing a structured framework for managing planned maintenance events that may affect available capacity.
Original Tariff Status: Partially Compliant. The original tariff contained a force majeure clause in GT&C Section 15, which defined force majeure events and established the rights and obligations of the parties during force majeure events. However, the tariff's maintenance scheduling provisions did not meet NAESB posting and advance-notice requirements. Specifically, the original tariff did not require Ridgeline to post planned maintenance on the EBB, did not specify a minimum advance-notice period for planned maintenance, and did not require updated postings when changes occurred to maintenance schedules.
Recommended Change: We recommend that Ridgeline revise GT&C Section 15 to require posting of planned maintenance on the EBB at least thirty (30) days in advance of the commencement of the planned maintenance, per NAESB WGQ 1.4.5. The revised provision should also require Ridgeline to post updated maintenance information on the EBB within twenty-four (24) hours of any change to the maintenance schedule, and to provide direct notification to affected shippers of any planned maintenance that will reduce available capacity below a specified threshold (recommended threshold: any reduction of more than 10% of design capacity, i.e., any reduction of more than 120,000 Dth/d).
Status in Fourth Draft (November 2024): Compliant. The Fourth Draft includes revised planned maintenance posting provisions in GT&C Section 15.3, incorporating the 30-day advance posting requirement and updated posting requirements per WGQ 1.4.5.
VI. Gap Analysis — Electronic Bulletin Board (EBB) Requirements (WGQ Standard 4.3) — Deficiency Item 7
A. EBB Posting Obligations
Section 284.12 of the Commission's regulations, codified at 18 C.F.R. § 284.12, requires each interstate pipeline transporting gas under Subpart B or G of Part 284 to maintain an electronic bulletin board providing specified informational postings to shippers and the public. NAESB WGQ Standard 4.3 supplements this regulatory requirement by establishing detailed specifications for the content, format, and timing of EBB postings. Together, 18 C.F.R. § 284.12 and WGQ 4.3 establish a comprehensive framework for information transparency in the wholesale natural gas transportation market.
The EBB serves multiple critical functions in the open-access transportation framework. It provides shippers with real-time or near-real-time information regarding available capacity, enabling them to make informed decisions about transportation nominations and capacity acquisition. It provides a platform for the posting of capacity release offers, bids, and awards, facilitating the secondary market for pipeline capacity. It provides shippers and the public with access to OFO notices, critical period declarations, and maintenance schedules, enabling shippers to manage their operations in response to pipeline conditions. And it provides a centralized repository for tariff information, rate schedules, and pipeline contact information.
Original Tariff Status: Non-Compliant. The original tariff filed on May 12, 2022, contained no EBB posting provisions whatsoever. This was identified as Deficiency Item 7 in the January 19, 2023 Deficiency Letter. The complete absence of EBB provisions represented a fundamental deficiency in the tariff, as EBB requirements are an essential component of the Commission's open-access transportation framework.
Ridgeline's March 15, 2023 partial response, which addressed eight of the fourteen deficiency items, included preliminary EBB provisions addressing Deficiency Item 7. The preliminary provisions committed Ridgeline to developing and maintaining an EBB and provided an initial outline of proposed EBB content. However, the preliminary provisions required further development to fully comply with NAESB WGQ 4.3, and the comprehensive EBB provisions have been developed as part of the tariff redesign effort.
The following EBB postings are required per NAESB WGQ 4.3 and 18 C.F.R. § 284.12:
(i) Available Capacity. The pipeline must post available firm and interruptible capacity by receipt point and delivery point, updated at specified intervals.
(ii) Index of Customers. The pipeline must post an index of shipper names, contract quantities, receipt points, delivery points, and contract expiration dates for all firm transportation agreements.
(iii) Capacity Release. The pipeline must post capacity release offers, bids, and awards, including the terms of each release (duration, rate, recall/reput rights, prearranged/open-season designation).
(iv) OFO Notices and Critical Period Declarations. The pipeline must post all OFO notices and critical period declarations immediately upon issuance.
(v) System Design and Operating Capacity. The pipeline must post system design capacity, current operating capacity, and scheduled maintenance information.
(vi) Tariff Sheets and Rate Schedules. The pipeline must make its complete tariff, including all rate schedules and GT&Cs, available on the EBB.
(vii) Nomination and Scheduling Information. The pipeline must post information regarding nomination cycles, deadlines, and scheduled quantities.
(viii) Imbalance Trading Opportunities. The pipeline must post available imbalance trading opportunities during designated trading windows.
(ix) Contact Information. The pipeline must post contact information for pipeline personnel responsible for scheduling, nominations, customer service, and other functions.
Recommended Change: We recommend that Ridgeline add a comprehensive EBB section to the GT&Cs (proposed new GT&C Section 10) requiring Ridgeline to maintain an EBB providing all of the postings specified above, with detailed requirements for content, format, and timing of each posting category. The EBB section should expressly incorporate NAESB WGQ 4.3 requirements by reference and should cross-reference all other tariff sections that involve EBB posting obligations (e.g., OFO provisions, capacity release provisions, imbalance management provisions, and maintenance scheduling provisions).
Status in Fourth Draft (November 2024): Compliant. The Fourth Draft includes a comprehensive EBB section in new GT&C Section 10, incorporating all required postings per WGQ 4.3 and 18 C.F.R. § 284.12.
B. EBB Design Specifications
NAESB WGQ Standard 4.3.2 establishes technical specifications for the EBB platform itself, including requirements for internet accessibility, data download capabilities, query functions, and user interface standards. The standard requires that the EBB be accessible via the public internet without requiring proprietary software, and that it provide shippers with the ability to download data in standardized formats for analysis and record-keeping.
Original Tariff Status: Non-Compliant. As noted above, the original tariff did not reference an EBB platform at all, and therefore did not address any technical specifications for EBB design or functionality.
Recommended Change: We recommend that the new GT&C Section 10 include provisions requiring Ridgeline to maintain an EBB accessible via the internet, compliant with NAESB WGQ 4.3.2 technical specifications. The EBB must provide data download capabilities in standardized formats (e.g., CSV, XML), query functions allowing users to search for specific information by receipt point, delivery point, date range, shipper, or contract, and a user-friendly interface that does not require proprietary software for access.
With respect to Ridgeline-specific system parameters, the EBB must display the following information:
• Receipt point: Wetzel County Interconnect (Wetzel County, WV)
• Delivery point: Waynesburg Compressor Station (Greene County, PA)
• System design capacity: 1,200,000 Dth/d
• Real-time or day-ahead available capacity postings at both the receipt and delivery points
• Interconnection capacity at Wetzel County Interconnect: 800 MMcf/d bidirectional
• Compressor station status and available compression at Wetzel Station, Mannington Station, and Waynesburg Station
Status in Fourth Draft (November 2024): Compliant. The Fourth Draft includes EBB design specifications in GT&C Section 10.2, referencing NAESB WGQ 4.3.2 requirements and specifying Ridgeline-specific system information to be displayed on the EBB.
C. Timing of Postings
NAESB WGQ Standard 4.3.3 establishes specific timing requirements for various categories of EBB postings. The timing requirements are designed to ensure that shippers receive information in a timely manner to support their nomination, scheduling, and capacity management decisions.
Original Tariff Status: Non-Compliant. The original tariff contained no posting timing requirements because it contained no EBB provisions.
Recommended Change: We recommend that the new GT&C Section 10 include provisions specifying the following posting timing requirements:
(i) Capacity Availability: Available capacity must be posted on the EBB no later than one (1) hour after each nomination cycle deadline.
(ii) OFO Notices: OFO notices must be posted on the EBB immediately upon issuance, and simultaneously with direct notification to affected shippers.
(iii) Critical Period Declarations: Critical period declarations must be posted on the EBB immediately upon declaration.
(iv) Capacity Release Postings: Capacity release offers, bids, and awards must be posted on the EBB in conformance with the timing requirements specified in NAESB WGQ 5.3 (cross-reference to capacity release provisions in GT&C Section 11).
(v) Planned Maintenance: Planned maintenance postings must be made at least thirty (30) days in advance of the commencement of maintenance (cross-reference to GT&C Section 15.3).
(vi) Imbalance Trading Opportunities: Imbalance trading opportunities must be posted on the EBB during designated trading windows (cross-reference to imbalance management provisions in GT&C Section 13).
Status in Fourth Draft (November 2024): Compliant. The Fourth Draft includes comprehensive posting timing requirements in GT&C Section 10.3.