The Midcontinent Independent System Operator (MISO) told the Federal Energy Regulatory Commission on July 3 that it is taking a number of steps to address growing reliance in the region on gas-fired power generation.
The July 3 MISO filing answered a series of six questions that FERC had asked on June 4 as part of its ongoing review of gas-electric coordination at a time when a number of coal-fired power plants are being shut and the system is increasingly reliant on often volatile natural gas supplies for power generation needs.
Many ISO/RTOs have ongoing stakeholder processes looking at issues associated with gas-electric coordination. What are the specific recommendations emerging that can be implemented quickly (by January 2014), for example, without requiring expensive and time-consuming software changes, while stakeholders are evaluating longer-term solutions? Please explain whether these require tariff changes.
Identifying which pipelines exist within a regional transmission organizations (RTO) operational system and which pipelines provide fuel for each natural gas-fired unit within each RTO’s operational system can enhance an RTO’s situational awareness and can be implemented fairly quickly without requiring expensive and time-consuming software changes nor would it entail tariff changes. This information can be further expanded upon based on each region’s or system’s needs.
Increased communication with natural gas pipelines in the form of periodic and/or seasonal meetings to discuss topics such as “electric grid operations, gas inventory, projected supplies, planned maintenance work on gas facilities, upcoming additions to the gas system, and long range weather forecasts” could be beneficial and would not require tariff changes.
MISO said it is currently discussing changes to its outage scheduling process with stakeholders. MISO has proposed utilizing a Maintenance Limit methodology in its outage approval processes to help ensure adequate resources during transitory periods for the system as well as during maintenance seasons, including the approaching compliance deadline with U.S. Environmental Protection Agency regulations (namely, the Mercury and Air Toxics Standards, due to take effect in April 2015). Implementation of changes to generator maintenance approval processes may require changes to the MISO Tariff and could be implemented relatively quickly, contingent upon stakeholder general acceptance and regulatory approval.
Other issues being discussed within MISO’s Electric and Natural Gas Coordination Task Force (ENGCTF) are still in preliminary stages. Changes to planning, operations, or market constructs will likely not be in place by January 2014.
Some of the challenges associated with gas-electric coordination occur when gas-fired generators are asked to obtain gas supply and pipeline transportation capacity, or additional gas supply and pipeline transportation capacity, on short notice or outside of the normal day-ahead nomination cycles. Is your ISO/RTO exploring ways to improve the day-ahead scheduling process to better reflect the expected real-time generation requirements? Are there “best practices” in this area that each ISO/RTO should be considering? ISO-NE recently implemented changes to its day-ahead schedule to better align the gas and electric trading days. Is your ISO/RTO considering similar modification for bidding and clearing in the day- ahead market?
In collaboration with stakeholders, MISO is beginning to explore opportunities for improvement and the resulting reliability, financial, and administrative implications of modifying MISO’s Day Ahead Market schedule.
FERC required ISO-New England to report after one year the impacts of the changes to its market schedule. This report will provide MISO, its stakeholders, and the industry with additional analysis on the impact and benefits of moving the market timelines.
Given the existing natural gas and electric infrastructure across the MISO market and reliability footprints, operational and market constructs for both the electric and natural gas industries are performing successfully and system events were successfully managed and coordinated throughout 2012 and the beginning of 2013. MISO shares the concerns of its stakeholders and regulators that, in the future, successfully managing extreme system events may require modifications to market rules for both the electric and gas industries in order to accommodate the portfolio changes as a result of changes in the economic and regulatory forces at play, as well as those associated with the expansion of MISO’s footprint with membership additions. These changes are expected to increase the percentage of energy produced by natural gas-fired generation in MISO’s footprint.
The implications of modifying the day-ahead energy market close and post times fall into three general categories, specifically; Reliability, Financial, and Market Administration. MISO and its stakeholders intend to study the growing reliance on gas-fired generation on markets and reliability, as well as evaluating these implications in order to determine schedule changes to market timelines and reliability procedures that may be warranted.
What are the specific concerns that your region has for this coming winter? Are there specific actions the commission can take to help address those concerns?
MISO said it has no specific winter concern for the upcoming winter period. However, MISO’s near-term concerns include the adequacy of resources throughout and beyond the compliance period with environmental regulations as well as during periods when many coal units are being simultaneously retrofitted to comply with the regulatory requirements. In addition, MISO is also working on improving its planning ability to capture fuel risk, and evaluating the ability of current market constructs to appropriately incentivize fuel delivery and transportation infrastructure to support electric demand.
There has been some discussion about shifting the start of the gas operating day ahead of the electric morning ramp. Would such a change improve gas-electric coordination in your region?
Currently, MISO is not experiencing the gas-fired unit de-rate issue that the New York ISO has mentioned in recent FERC gas-electric coordination technical panels where gas-fired units are ramping down due to their daily gas nomination schedules while the electric load is ramping up. However, as a grid operator, MISO said it would also have this concern should it ever experience that issue and understands the timing concern the NYISO has raised.
At this time, MISO is not aware of a positive or negative issue that would be seen from moving the gas day to earlier in the day. Should moving the gas day to start earlier in the day result in minimizing the uncertainty surrounding fuel procurement for gas-fired generators, then MISO would support such a move, as long as this did not also require that the daily nomination schedule also move up.
Are gas system contingencies included in your ISO/RTO system planning? If so, what are they, how were they selected and how often are they updated?
MISO does not take natural gas infrastructure contingencies directly into account in system planning constructs. However, loss of electrical generation is captured in the reliability analysis MISO performs to comply with the North American Electric Reliability Corp. (NERC) Transmission Planning (TPL) standards. The contingency studies include: NERC Category B Events (which include single generator outages), NERC Category C3 Events (which include double generator outages), and Category D Events (which include loss of all generating units at a station). These contingencies are developed collaboratively with MISO staff and transmission owners.
In addition, MISO is in the beginning stages of a Loss of Load Expectation (LOLE) study effort on how to assess the risk of the just-in-time nature of natural gas fuel supply and the reliability of the resource fleet.
What specific steps is your region taking to improve situational awareness of local conditions, such as planned or unplanned maintenance of natural gas pipelines? Are these steps on track to be implemented before the next winter heating season? What actions should the commission consider taking to facilitate improvements in this area?
Last year, MISO formed the ENGCTF, which has proven to be a beneficial first step for dialogue and fostering ideas for increased coordination between MISO and the natural gas industry. This coordination has increased the understanding by operators of the natural gas industry and transportation processes that ultimately serve natural gas-fired generation in the Midwest.
Other than being notified by pipelines of Critical Notices and Operational Flow Orders, MISO said it does not currently coordinate with the natural gas industry on infrastructure maintenance. However, MISO expects to work through the ENGCTF to identify data requirements that can be used for electric reliability analysis and increase situational awareness that best fits its region. There are over 20 interstate pipelines in the MISO Midwest footprint and over 70 interstate pipelines in the MISO South footprint. Given the large amount of gas pipelines within the MISO footprint, it would be challenging for MISO to communicate with every pipeline in its footprint regarding pipeline maintenance.