Rae McQuade

rae mcquade

Please tell us a bit about yourself and your career.

For education, I have Bachelor of Science degrees in Chemistry and Mathematics from the University of Texas, and attended the University of Houston for graduate studies in economics. I’ve lived in Houston since 1978.

I have always been in the energy field – I worked at NASA, and then at oil, petrochemical, and natural gas companies.

I became involved in industry activities when on special assignment at Tenneco Gas. On my assignment, I was to support the president of Tenneco Gas, Mr. Stephen D. Chesebro’, who is now the Chairman of the Board of Harvest Natural Resources, Inc. At the time, he was leading an industry committee to address concerns raised with the use of electronic bulletin boards to nominate pipeline transportation for natural gas. With multiple pipelines and multiple shippers, the terminology was different, and methods and operations were different.  

The shippers were very concerned and had complained to the Federal Energy Regulatory Commission because the differences in electronic bulletin boards were impacting their ability to get the transportation they needed to move the gas to market. Several trade press publications covered the concerns heightening the industry awareness. The leadership of the natural gas industry was sensitive to the complaints and began investigating ways to address the problems posed by multiple electronic bulletin boards, all with different requirements for use and different information requested and different terminology. The industry committee decided to pursue the creation of a standards organization.

After two years of contentious meetings and trying negotiations, the Gas Industry Standards Board, GISB, was created. Luckily, the transition from the gas board to NAESB was not as difficult, as GISB served as the model and we had strong and visible support from executive leadership. I was very fortunate to be in key positions both in the creation of GISB and in the transition and leadership of NAESB.

And please tell us a bit about NAESB.

GISB started operations in 1994, and ‘morphed’ into NAESB in 2000. The transition expanded the focus from GISB to NAESB, and from the standards issues for the wholesale gas market to the standards issues for the wholesale gas, retail gas, retail electric and wholesale electric markets.

NAESB’s participation is more than North American. In addition to US, Canadian and Mexican participation, we have 20 countries monitoring our development activities. We have standards that span from contracting and nominations to the ultimate payment for the product.  

We are fortunate to have public/private partnerships with regulators and related government agencies. We provide them with our standards as status reports, but do not advocate that regulators take any particular action. On the federal side, in the United States, the Federal Energy Regulatory Commission has used a process called incorporation by reference to adopt many of our standards into federal regulations.

How has deregulation impacted your activities?

The retail market, when choosing to adopt customer choice programs, has needed model business practices and technical communication protocols to support the programs. As markets become more robust and have more participants, standards are useful to provide a commonality needed in the business transactions. With deregulation, there is typically an increase in market participants and in market transparency – all of which can be supported by standards.

What are some of the key challenges you face?

A particular challenge is reaching a consensus of the industry, as participants in the standards process come with their own individual and diverse agendas. Being able to achieve a consensus and meet industry expectations can be quite difficult. Another challenge of any standards organization is that of the free rider. A free rider is a company that realizes the benefits of the standardization without ever contributing to it.

What is your vision for NAESB?

I would like to see NAESB grow in membership and become as effective in wholesale electric market issues as it has for wholesale gas market issues. In doing this, I would also hope to continue to improve an already excellent relationship with regulators. The regulators see NAESB as a voice for the industry; NAESB member companies see NAESB as a tool to get their voices heard as standards are developed.