On April 25, 2013, the Federal Energy Regulatory Commission (FERC) convened its second technical conference on coordination between natural gas and electricity markets. The first conference, held on February 13, 2013, addressed the current challenges facing the natural gas and electric industries in the area of information sharing and communications. The conferences arose from a February 3, 2012, Request for Comments issued by Commissioner Moeller, which sought input on the broad issue of the interdependence of the natural gas and electric industries, specifically in the context of electricity generation’s increasing reliance on natural gas to serve load. The Commission’s subsequent notice establishing the proceeding explained that, “[s]ince natural gas is expected to be relied on much more heavily in electricity generation, the interdependence of these industries merits careful attention.”
The April 25 conference was structured into two roundtable discussions that focused on (1) the coordination of gas and electric schedules and (2) natural gas pipeline flexibility and potential scheduling adjustments. Generally, the conference centered on how to better align the schedules of the gas and electric industries. The electric grid serves peak demand of all customers on a system, whereas gas pipelines are designed to individually serve firm contract customers. The current asynchronous schedules of the electric and gas industries can lead to events in which generators need gas to continue operations, but gas is unavailable immediately.
Several participants supported the proposal to start the 24-hour gas day earlier (i.e., moving up the gas day to 5:00 or 6:00 am Central Time, instead of the current 9:00 am start time), which would improve generators’ ability to schedule pipeline capacity for peak demand periods. Others indicated that no changes are needed, since the current structure of four nomination cycles with the ability to add extra cycles is sufficient. Some argued that there would not be much value to aligning gas and electric schedules because, invariably, gaps will exist. One participant opposed changes, stating that the current system is adequate for local distribution companies. In addition, changes would be expensive and not address the real issue of inadequate pipeline infrastructure.
The third technical conference will take place on May 16, 2013. The Commission directed each Regional Transmission Organization and Independent System Operator to appear in order to describe the progress it has made in refining existing practices to provide better coordination between the natural gas and electric industries and ensure adequate fuel supplies.