FERC plans technical conference on gas-fired power issues

Federal Energy Regulatory Commission staff will hold a Feb. 13 technical conference to take input on information sharing and communications issues having to do with the looming issue of natural gas and electric power industry convergence.

The commission, which has regulatory authority over both electric transmission lines and natural gas pipelines, has in recent months been looking at issues related to increased displacement of coal-fired generation by new gas-fired power plants and whether natural gas supply reliability issues would begin to impact the nation’s grid and its stability.

The Feb. 13 technical conference will take place at the commission offices in Washington, DC, said a Dec. 7 meeting notice. Commission members may participate in the conference.

On Nov. 15, the commission issued an order directing further conferences and reports in this docket. The commission directed staff to establish a technical conference to identify areas in which additional commission guidance or regulatory changes could be considered. In advance of this conference, interested parties are asked to file comments on the following questions related to communications and information sharing:

  • During an emergency, what kind of verbal communications and data exchanges do and should take place between the natural gas and electric industries? What are the industries’ current “best practices” for these communications? How can today’s best practices be improved? What should the commission do, if anything, to facilitate the application of best practices between the industries?
  • Commenters are being asked to provide specific examples of other communications practices between the natural gas and electric industries that could be enhanced, including any communications regarding maintenance and construction planning, day-to-day operations, and other non-emergency situations. In providing examples, the commission wants the commenting party to explain whether there are regulatory or other barriers that would prevent good communications such as specific commission regulations, tariffs or contractual provisions, legal precedents, or inadequate communications infrastructure.
  • Should natural gas pipeline and electric utility system operators be allowed to exchange information that is not publicly posted? If so, what kinds of information should be permitted to be shared and under what circumstances? If information is shared, is there a need for enhanced protections against the improper use of the material communicated and what protections would be appropriate? Is the answer the same if a natural gas pipeline or its affiliate sells or buys wholesale electric power? If there are concerns that the increased communications might cause potential harm to industry participants, please explain those concerns, the commission asked. It wants parties to consider examples of information sharing that include both verbal and digital information.

Responses to these questions will form the basis of the agenda for and discussion at the technical conference on communications and information sharing. Comments responding to the Dec. 7 notice should be submitted on or before Jan 7.

RTOs, other organizations active in this coordination effort

FERC in the Nov. 15 order said there should be two more technical conferences on the issue, on top of five held last August.

“In addition, the Commission directs each regional transmission organization (RTO) and independent system operator (ISO) to appear before the Commission on May 16, 2013, and October 17, 2013, to share their experiences from the winter and spring, and summer and fall, respectively,” said the Nov. 15 order.

Commission staff was also directed to provide a report to the commission at least once each quarter for 2013 and 2014.

Many of the past technical conference participants raised concerns related to natural gas and electric scheduling and pipeline capacity release. Some of these concerns relate to whether establishing a standard energy day for both industries is warranted, whether and how utilities can most effectively match their scheduling times with the nationwide natural gas scheduling timeline, whether additional nomination opportunities for natural gas can be provided and, if so, under what conditions, FERC noted.

Current regulations and policies already provide a certain degree of flexibility in the near-term for utilities to address coordinated scheduling issues on a regional basis and for pipelines to provide enhanced scheduling opportunities, the commission wrote in the Nov. 15 decision. These efforts are improving coordination across the natural gas and electric industries within individual regions. “They do not, however, address broader questions of whether industry-wide changes to scheduling practices and service offerings are necessary or appropriate to achieve long-term gas-electric harmonization, address seams issues across regional markets, or promote a more efficient utilization of existing pipeline capacity,” FERC noted.

Several RTOs and ISOs are developing or implementing refinements to existing practices and in some instances interstate natural gas pipelines have, as necessary, modified services and nomination cycles to meet customer needs, the commission wrote in the Nov. 15 order.

“Furthermore, we note that regional stakeholder processes have been initiated in some regions with engagement of electric and natural gas market participants and state regulators to look at both industries’ future needs,” it added. “Notwithstanding, there was considerable discussion during several of the technical conferences as to whether electric generators participating in the organized wholesale electric markets administered by RTOs and ISOs have sufficient market incentives to deliver firm energy, whether from natural gas pipelines or other means. There was also discussion of other features of the day-to-day operation of organized wholesale electric markets, such as the reliability unit commitment process which did not necessarily align well with natural gas markets. Logistical issues also were raised, given that market reforms and infrastructure development take time and ideally should inform one another.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.