EEI offers comments on FERC proposal for gas-electric coordination

The Edison Electric Institute (EEI) told the Federal Energy Regulatory Commission that it is generally supportive of a July 18 notice of proposed rulemaking (NOPR) related to information sharing between gas pipelines and regional electric transmission operators.

The NOPR is part of a broader effort by the commission to ensure, as the nation’s power generation system relies increasingly on often volatile natural gas supplies as a fuel, that gas can be delivered at the right time to the right power plants.

“EEI appreciates the Commission’s ongoing interest in the ability of the electric and natural gas systems to work together to provide safe, reliable, cost-effective gas and electric service to customers,” the EEI comments, submitted Aug. 23, said. “EEI supports the Commission’s willingness to respond to concerns expressed by some stakeholders and to provide clarification on the sharing of non-public information. EEI is especially supportive of the permissive nature of the NOPR and the implicit recognition that this is an additional avenue for communication that does not preclude any other permissible communication between stakeholders that occurs today.”

In the NOPR, the commission proposes to revise its rules and regulations to expressly permit “interstate natural gas pipelines and public utilities that own, operate or control facilities used for the transmission of electric energy in interstate commerce to share non-public, operational information with each other for purposes of promoting reliable service or operational planning on either the public utility’s or pipeline’s system.”

The NOPR proposes to amend part 38.2(a) of its rules and regulations to allow any public utility that owns, operates or controls facilities used for the transmission of electric energy in interstate commerce to share non-public operational information with a pipeline and to amend part 284.12(b)(4) to allow a pipeline to share non-public, operational information with a public utility.

EEI said it believes that the proposal addresses concerns expressed by pipeline operators and Regional Transmission Organizations and Independent System Operators about the types of non-public operational information that they can share without violating any regulations or tariffs regarding providing undue preference or discrimination.

The commission correctly observed that “some vertically integrated transmission owners may have marketing function employees or affiliates, such as generators or local distribution companies who handle gas transactions,” EEI noted. This permissive approach aligns with the commission’s recognition that many of these electric-gas coordination issues are regional in nature, it added.

EEI seeks clarity on certain issues

EEI said it is generally supportive of the proposal in the NOPR which provides clarification that some stakeholders requested without mandating that communication between pipelines and public utilities must take place as described in the NOPR. In order to provide additional clarity and to ensure that the NOPR broadens, and not narrows, the range of permissible communications, EEI is seeking clarifications in the final rule.

For example, the final rule should clarify that the proposal in the NOPR does not preclude otherwise permissible communication. “This acknowledgment is important because the utilization of these communication practices in many regions of the country contributes to the reliable operation of the electric and natural gas systems during normal operation as well as during times of significant stress such as tornadoes and hurricanes,” EEI said. “Thus, an explicit statement as requested above will help ensure that the final rule does not inadvertently impede currently allowed communication between pipelines and public utilities, as well as with third parties such as LDCs, where it is already occurring.

Also, EEI generally supports the commission’s proposal to not provide an exhaustive list of non-public operational information that can be shared between public utilities and pipelines so that public utilities and pipelines retain the flexibility to determine what information needs to be shared to promote reliability and operational planning.

EEI also responded to a couple of questions that have been raised by the commission regarding the communication of non-public operational information.

First, the commission seeks comment on whether additional regulations are needed that require a generator to share information with a public utility to inform it of the possibility that the generator’s natural gas service may be disrupted. “Additional Commission regulations are not needed to require generators to share information with the public utility that the generator’s natural gas service may be disrupted,” EEI argued. “NERC and NAESB are working with stakeholders and public utilities already have the ability to work with their stakeholders, including generators, to require that this information be provided. Some public utilities already have requirements and standards that explicitly or implicitly require the provision of this type information (if requested by the public utility). For example, PJM Interconnection L.L.C. (‘PJM’) requires capacity resources to report fuel data to enable PJM to assist the market in providing solutions in emergency situations.”

Second, the commission requests comment on whether the proposal should require public utilities and pipelines to involve affected customers, such as generators, if customer-specific, non-public information is shared. “Customers whose non-public information is shared by the public utility or pipeline may have information that is not known to the public utility or pipeline,” EEI wrote. “For example, the pipeline may indicate to the public utility that the generator no longer is receiving fuel or has a reduced fuel nomination with the pipeline. Without contacting the generator, the public utility would not know if the generator has back-up supply or made other fuel arrangements. This additional information would be important for the public utility to have when making decisions affecting the reliability or operation of the system. Thus, having the affected customer involved in a timely manner will help ensure that the information being communicated between the pipeline and public utility provides a complete picture so that decisions affecting system reliability and operation are based on the most accurate information possible. As such, public utilities and pipelines that choose to communicate non-public, customer-specific information under the proposal in the NOPR should consider including affected customers in the communication and should discuss with their stakeholders the best way to effectuate this participation in the various regions.”

The American Gas Association (AGA) in its own Aug 26 comments said it supports the commission’s proposal in this proceeding and urges the commission to consider that local distribution companies (LDCs) are operators of pipeline systems, particularly to the extent natural gas-fired electric generators are located on LDC systems. AGA, therefore, recommends that the commission clarify that non-public, operational information may be shared with LDCs for the purpose of promoting reliable service or operational planning.

“However, communications should not be seen as the only way of addressing natural gas and electric system interdependencies,” the gas group said. “As AGA has previously stated, communications can supplement, but are no substitute for, the timely planning and construction of adequate natural gas infrastructure to meet growing power sector demands. AGA continues to look forward to working with the Commission and industry stakeholders to ensure that increased use of natural gas for electric generation is accompanied by an appropriate expansion of the natural gas infrastructure needed to meet the needs of all customers on the natural gas system, and that the costs of such expansion are fairly allocated.”

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.