The expected 41% increase in gas-fired combined cycle generation this year (more than 50,000 MW of incremental capacity) will have a significant impact on natural gas transportation and delivery (see Daily GPI, March 5). As a result, three industry associations have signed an agreement to work closely to ensure that the reliability of residential and commercial gas utility service isn’t compromised.

The American Gas Association (AGA), the American Public Gas Association (APGA) and the Interstate Natural Gas Association of America (INGAA) issued a joint statement of principles on service reliability Friday. They also sent the agreement to the Federal Energy Regulatory Commission (FERC) potentially to serve as a recommendation on how to handle reliability concerns.

“This could have been a very contentious issue as the growth of power generation continues,” said AGA spokeswoman Peggy Laramie. She said the pact calls for a “pipeline-by-pipeline approach” to address and resolve any service reliability issue.

“It make sense for FERC to look at [reliability issues] on a case-by-case, pipeline-by-pipeline basis instead of some kind of blanket [guideline approach],” said Laramie. “Every situation is different and perhaps this statement of principles will guide FERC in its consideration of individual pipeline projects.”

The agreement calls for meetings between individual pipelines and their customers with discussions on a variety of recommended topics such as “supply and demand dynamics, certificated design capabilities, the design operating characteristics of the pipeline system. Other topics might include modeling techniques and related assumptions, alarm sets, emergency response plans with event scenarios, etc.

The agreement specifies that discussions also should fully explain the impact of capacity release, segmentation, and the exercise of flexible-point rights on pipeline operations and capacity availability. “Additionally, discussions should take into account the impact of implementing pipeline integrity rules issued by the Department of Transportation’s Office of Pipeline Safety.”

The agreement mentions the need for more real-time information exchange. “If the pipelines believe they require additional information from their customers in order to better model their systems, for example, they should talk directly to their customers.” It also recommends state or regional industry meetings to focus on reliability concerns. “We understand certain regional meetings already occur; we would like to see this practice become more widespread,” the associations said.

AGA said the issuance of the “statement of principles” is the culmination of months of discussions among natural gas utility and pipeline representatives. FERC held an Oct. 25, 2002 conference on natural gas market trends that included a panel discussion on the flexibility pipelines need to serve historical load as well as the increasing amounts of natural gas that will be used to generate electricity.

AGA represents 190 utility companies that deliver natural gas to more than 52 million homes, businesses and industries throughout the United States. APGA is a nonprofit trade organization representing publicly-owned gas distribution companies. INGAA represents most of North America’s interstate natural gas pipeline companies.

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