FERC issuing final rule on gas-electric system data sharing

The Federal Energy Regulatory Commission will be publishing in the Nov. 22 Federal Register its final rule that allows gas pipeline and electric transmission companies to better coordinate their systems at a time when the U.S. is increasingly reliant on often volatile gas supplies for power generation.

The final rule amends the commission’s regulations to provide explicit authority to interstate natural gas pipelines and public utilities that own, operate, or control facilities used for the transmission of electricity in interstate commerce to share non-public, operational information with each other for the purpose of promoting reliable service or operational planning on either the public utility’s or pipeline’s system. The final rule adopts the regulations proposed in the July 18 Notice of Proposed Rulemaking without modification.

“In recent years, reliance on natural gas as a fuel for electric generation has steadily increased,” the final rule noted. “This trend is expected to continue into the future, resulting in greater interdependence between the natural gas and electric industries. Several events over the last few years, such as the Southwest Cold Weather Event, demonstrate the crucial interaction between natural gas pipelines and electric transmission systems and the need for robust communication between these industry sectors to ensure that both systems operate safely and effectively for the benefit of their customers.”

For example, the North American Electric Reliability Corp. reported in May of this year that over the past decade, natural gas-fired generation rose from 17% to 25% of U.S. power generation and is now the largest fuel source for generation capacity. Gas use is expected to continue to increase in the future, both in absolute terms and as a share of total generation and capacity.

The trend tom gas is in part accelerating due to a continuing wave of closures of coal-fired plants, particularly in the Midcontinent ISO and PJM Interconnection regions, due to stringent new clean-air regulations. ISO New England is particularly reliant on gas-fired generation and is also a region with cold winters, which means gas is heavily used there during the winter for home heating. ISO New England has lost almost all of its coal plants, with the biggest remaining such plant, Brayton Point in Massachusetts, to shut in 2017.

Since February 2012, the commission has requested comment and conducted multiple technical conferences on various aspects of gas-electric interdependence and coordination. In this proceeding, the commission addresses one aspect of gas-electric interdependence and coordination: communication and information-sharing between the natural gas and electric industries.

Among other things, the commission is adopting a No-Conduit Rule to provide additional protections against undue discrimination and ensure that the non-public, operational information shared under the rule remains confidential.

Electric transmission operators are continuously on a real-time basis balancing supply and demand to ensure the system remains in equilibrium. “In contrast, due to the physical characteristics of interstate natural gas pipelines, the pipelines require advance nominations to ensure they have sufficient line pack and storage available to meet scheduled daily load of all their customers, including the gas-fired generators, which may constitute significant load for a pipeline and which generally rely on a just-in-time natural gas supply and pipeline delivery,” FERC pointed out. “While pipeline line pack and storage provide some operational flexibility to pipelines to accommodate load swings throughout the day, short term swings in demand by gas-fired electric generators resulting from redispatch by electric transmission operators may be difficult to manage, particularly during times of coincident peak loads on interstate natural gas pipelines and electric transmission systems, such as during unusual cold weather events when end-use customers may rely on both natural gas and electricity.”

There were 33 commenters on the draft rule, with 30 of them either supporting it or not opposing it. The 30 included: American Electric Power Service Corp., American Gas Association, American Public Power Association, Boardwalk Pipeline Partners LP, Duke Energy, Edison Electric Institute, Electric Power Supply Association and Electricity Consumers Resource Council.

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.