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Shutoffs Have Wellinghoff Rethinking Gas-Electric Relationship

The results of FERC's ongoing inquiry into the causes of energy disruptions that occurred across the Southwest two months ago are not yet known, but the incident has some at the Commission rethinking the relationship between the gas and electric industries.

"We're going to start looking at this more like a system, and less like two separate systems," Federal Energy Regulatory Commission (FERC) Chairman Jon Wellinghoff told reporters in Washington, DC, Wednesday.

Extreme cold weather that swept through the Southwest in the first days of February caused well freeze-offs and compressor failures due to power outages (see Daily GPI, Feb. 7). The severe weather curtailed gas deliveries to thousands of customers in New Mexico, Arizona and Southern California supplied through El Paso Natural Gas and Transwestern Pipeline. Since then state legislatures, the New Mexico Public Regulation Commission, FERC and the U.S. Senate Energy and Natural Resources Committee have launched investigations and held hearings (see Daily GPI, March 15; Feb. 23; Feb. 16; Feb. 14), and one small town, Bernalillo, NM, has sued its local utility over shutoffs to homes and businesses (see Daily GPI, March 30).

The energy disruptions and ongoing inquiry have prompted "some interest on our part" into the relationship between the two industries in general and between natural gas deliverability and electricity outages specifically, Wellinghoff said. "We don't know yet" what the outcome of the FERC probe will be, he said.

The inquiry is not an enforcement investigation, and any decision to initiate that type of inquiry would come later, according to a FERC spokesperson.

George Schreiber, CEO of New Mexico Gas Co.'s parent company, Continental Energy Systems, has said the utility's performance during the first few days of February was "unacceptable," but he put the onus on upstream energy infrastructure failures in the electric and natural gas systems. Schreiber said ultimately there needs to be better coordination between regional electricity and gas pipeline grids. Executives with El Paso and Transwestern have said their pipelines operated adequately despite the severe weather, but there were problems in getting sufficient supplies into the pipes to meet the extremely high demands brought on by bitter cold weather.

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