PAIUTE PIPELINE COMPANY
In accordance with Order No. 2004 et al., establishing revised Standards of Conduct for Transmission Providers, and 18 C.F.R. § 358.4(e)(3), Paiute Pipeline Company (“Paiute”) is posting these written implementation procedures for compliance with the new Standards of Conduct (“Compliance Procedures”).
For information about Paiute’s Compliance Procedures, you should contact Paiute’s Chief Compliance Officer, Mark Litwin. The Chief Compliance Officer is responsible for (1) overseeing the training of employees regarding the Federal Energy Regulatory Commission’s Standards of Conduct requirements of 18 C.F.R. Part 358, (2) ensuring compliance with all posting requirements of the Part 358 regulations, (3) providing guidance to employees on compliance questions as they arise, and (4) responding to general inquiries regarding Paiute’s compliance from third parties. Mr. Litwin’s contact information is:
Mark Litwin
Chief Compliance Officer
Paiute Pipeline Company
(702) 364-3195
I. Background
On November
25, 2003, the Federal Energy Regulatory Commission (“FERC”) issued Order No. 2004,
which promulgated revised regulations that require all Transmission Providers,
as defined by the Order, to file and post on their OASIS or Internet Websites
by February 9, 2004, a compliance plan and implementation schedule. Paiute submitted its plan on
The revised Standards of Conduct
were further modified and clarified in Order No. 2004-A, issued on April 16,
2004, and Order No. 2004-B, issued on
As Paiute explained in its February 9th Plan, Paiute is a Transmission Provider, as defined by 18 C.F.R. § 358.3(a), with no Energy or Marketing Affiliates, as defined by 18 C.F.R. § 358.3(d) and (e).
Paiute operates a non-major open
access interstate pipeline in
Paiute is a wholly-owned subsidiary
of Southwest Gas Corporation (“Southwest”), a
II. Overview of this Posting
This posting includes the following:
(1) the written compliance procedures, including Background and Summary of Compliance/Implementation Procedures,
(2) certification of the Chief Compliance Officer, and
(3) organizational chart and related information required for initial posting.
III. Summary of Paiute’s
Compliance/Implementation Procedures
As set forth below, Paiute has met the requirements for a Transmission Provider with no Energy or Marketing Affiliates.
A. Implementation.
1. Implementation plan and
schedule due
Paiute has met
this
2. Implementation
posting.
This posting
satisfies the requirement that Paiute post on its Internet site its current
written procedures implementing the standards of conduct regulations and that
such Compliance Procedures be in sufficient detail so as to enable its
customers and the Commission to determine whether Paiute is/will be in compliance
by
3. Distribution of procedures.
Paiute is responsible for distributing its Compliance Procedures to all Paiute employees, as defined by the regulations. See 18 C.F.R. § 358.4(e)(4). Paiute currently has no employees of its own. All Paiute-related work is performed by Southwest employees on behalf of Paiute. Paiute has distributed these Compliance Procedures to those Southwest employees that perform a Paiute-related transmission function (excluding Southwest support employees, such as clerical, maintenance and field workers).
4. Books and Records.
Paiute currently maintains separate books and records, which are available for Commission inspection, and are in compliance with parts 101, 125, 201, and 225 of the regulations. See 18 C.F.R. § 358.4(d)
5. Compliance Posting of
organizational charts.
In compliance with 18 C.F.R. § 358.4(b)(3), this posting includes comprehensive organizational charts that show:
(1) Southwest’s organizational structure, including Paiute’s relative position in the corporate structure;
(2) Paiute’s business units, job titles and descriptions (including employee titles, employee duties, whether the employee is involved in transmission or not - Paiute makes no sales), names of supervisory employees who manage non-clerical employees involved in transmission or sales, and chain of command for all positions (including directors and officers, but not including clerical, maintenance, and field positions). Paiute has included within the scope of those employees identified on the organizational chart Southwest employees that perform a Paiute-related transmission function;
(3) Paiute has neither a marketing or sales function nor a Marketing or Energy Affiliate. Paiute has included in its organizational chart information about those Southwest employees that perform transmission function activity. See section (2) above.
6. Training and certification.
A Transmission Provider must require that all of its officers and directors, as well as employees with access to transmission information or information concerning gas or electric purchases, sales or marketing functions, receive training and sign a document stating (or certifying electronically) that they have been trained. See 18 C.F.R. § 358.4(e)(5). In compliance with this requirement, Paiute has circulated training materials to all employees to which this requirement applies, and has conducted in-person training of employees as necessary. In addition, Paiute has created an internal procedure for compliance questions to be directed to the Chief Compliance Officer as they arise.
B. Posting
Requirements.
Effective
1. Compliance Procedures.
Paiute has posted its Compliance Procedures as required by 18 C.F.R. § 358.4(e)(3) (see Part III.A.2. supra), which includes the organizational charts and other information required by 18 C.F.R. § 358.4(b)(3) (see Part III.A.5 supra).
2. Discretionary Tariff Log.
Paiute must maintain a log detailing all circumstances and the manner in which it exercises discretion under any terms of the tariff. Information must be added and posted on the Internet site within 24 hours of when Paiute exercises discretion. See 18 C.F.R. § 358.5(c)(4). Paiute has established a log of discretionary tariff actions, which will be posted within 24 hours of the time Paiute takes the relevant action. With respect to this posting requirement, Paiute will not duplicate postings where, for example, Paiute is already required to post the information in order to comply with other regulatory requirements. In addition, Paiute’s posting will not include confidential or commercially sensitive information, which is consistent with Paiute’s compliance obligations.
3. Discounts.
Paiute must post any offer of a discount for any transmission service on its Internet site contemporaneous with the time the offer is contractually binding. The posting must remain on the site for 60 days from the date of posting. See 18 C.F.R. § 358.5(d). Paiute has implemented procedures to comply with the discount posting requirement of 18 C.F.R. § 358.5(d).
Paiute’s discount
posting under this section will include:
(1) name of customer involved in the discount; (2) whether the customer
is an affiliate; (3) whether any affiliate is involved in the transaction; (4)
the rate offered; (5) the maximum rate; (6) time period for which the discount
will apply; (7) quantity of power or gas scheduled to be moved; (8) delivery
points under the transaction; and (9) any conditions or requirements applicable
to the discount.
4. Emergency Exceptions.
Any deviations by Paiute from “the standards of conduct” must be reported to the Commission and posted on Internet site within 24 hours of such deviation. See 18 C.F.R. § 358.4(a)(2). Paiute has implemented procedures to require any deviations from the Part 358 regulations to be posted within 24 hours of the deviation as required.
5. Information Updates.
Posted information must be updated within seven business days of any change; postings should include the date on which information is updated. See 18 C.F.R. § 358.4(b)(iv). Paiute has implemented procedures to require updates to its Internet site for Standards of Conduct information to be posted within seven business days of any change in the information with the date of the update included in the posting.
6. Potential mergers.
Information concerning potential merger partners as affiliates must be posted within seven days after the potential merger is announced. See 18 C.F.R. § 358.4(b)(v). Paiute has implemented procedures to post merger announcements within seven days of the public announcement of the merger.
7. Coordination with other posting requirements.
Transmission Providers must ensure that all postings under the new affiliate regulation comply with applicable Part 284 requirements. See 18 C.F.R. § 358.4(b)(vi). In compliance, Paiute has taken steps to ensure that its Part 358 Internet postings comply with the requirements of 18 C.F.R. § 284.12 (a) (Incorporation by Reference of NAESB Standards) and § 284.12 (b)(3)(v) (archiving requirement for electronically provided information).
8. Training.
Paiute has conducted initial training that satisfies the requirements of 18 C.F.R. § 358.4(e)(5), and, as discussed herein, has initiated an ongoing training program to ensure ongoing compliance with the spirit and the letter of the new Standards of Conduct.
C. Substantive
Compliance Obligations.
The regulations institute four continuing non-discrimination obligations, with which Paiute will comply.
1. Strict enforcement of nondiscretionary tariff provisions.
Paiute will strictly enforce all nondiscretionary tariff provisions relating to the sale or purchase of open access transmission service. See 18 C.F.R. § 358.5(c)(1).
2. Nondiscriminatory application of discretionary tariff provisions.
Paiute will apply all tariff provisions that permit the use of discretion and pertain to the sale or purchase of open-access transmission service in a fair and impartial manner. With respect to such tariff provisions, all transmission customers must be treated in a nondiscriminatory manner. See 18 CFR § 358.5(c)(2).
3. Nondiscrimination in processing of transmission requests.
Paiute will process all similar requests for transmission in the same manner and in the same period of time. See 18 C.F.R. § 358.5(c)(3).
4. Prohibition against giving preference to affiliates.
A Transmission Provider must ensure that it does not give a preference to its Marketing or Energy Affiliate over any other wholesale customer in matters relating to the sale or purchase of transmission service (including, but not limited to, issues of price, curtailment, scheduling, priority, ancillary services, or balancing). See 18 C.F.R. § 358.5(c)(5).
Paiute has no Marketing or Energy Affiliates and therefore this requirement is not applicable. However, as an open access pipeline, Paiute is under a similar obligation to avoid providing undue preferences. Paiute is in compliance with these existing requirements.
IV.
Southwest’s
Status as an Exempt Local Distribution Company
Southwest is a state-regulated
local distribution company that is exempt from the definition of Energy
Affiliate. As a result, Paiute has
neither any Marketing Affiliates, nor any Energy Affiliates.
V. Reservation of Rights
These compliance efforts are taken without any waiver of Paiute’s rights, present or future, regarding any Commission regulation, policy, or precedent in existence now or in the future.
CERTIFICATION OF CHIEF COMPLIANCE OFFICER
I, Mark Litwin, am the duly authorized employee charged with the responsibility of serving as Paiute Pipeline Company’s Chief Compliance Officer regarding the Standards of Conduct set forth at 18 C.F.R. Part 358. Based upon information, knowledge and belief, I hereby certify that I have reviewed these Compliance Procedures and believe the factual statements contained therein to be true and correct as of the date of this certification.
________/s/_________________
Mark Litwin
Date: