A host of North American electric power generators say they support a notice of proposed rulemaking (NOPR) that would shake up the natural gas day, and think FERC should go even further in its search for ways to meet the demands of the industry, according to filings at the regulatory agency.
"The proposals at issued in the NOPR should facilitate the intended reliability benefits," the Independent System Operators/Regional Transmission Organizations Council (IRC) said in its response to the NOPR.
But the group also urged the Federal Energy Regulatory Commission (FERC) "to continue to evaluate other potentially beneficial practices, and to support discussions between the electric industry and the gas industry to assess such opportunities to further enhance the flexibility and coordination needed to support electric system reliability."
The IRC is comprised of the Alberta Electric System Operator (AESO), California Independent System Operator Corp., Electric Reliability Council of Texas (ERCOT), Independent Electricity System Operator of Ontario (IESO), ISO New England, Midcontinent Independent System Operator, New York Independent System Operator, PJM Interconnection, and Southwest Power Pool. AESO, ERCOT and IESO are not subject to FERC's jurisdiction in relation to the NOPR.
The NOPR, issued by FERC in March, would tackle the long-running and increasingly nettlesome issue of gas-power coordination by re-calibrating the natural gas day (see Daily GPI, March 20). For starters, the gas day would start much earlier -- at 4 a.m. central clock time (CCT) instead of the current 9 a.m. -- in order to give power generators in every time zone an opportunity to enter the morning demand ramp-up period with fresh gas nominations.
But the proposed changes to the gas day don't stop there. The NOPR also proposes to:
Start the first day-ahead gas nomination opportunity for pipeline scheduling, the Timely Nomination Cycle, later -- at 1:00 p.m. CCT -- to allow electric utilities to finalize their scheduling before gas-fired generators must make gas purchase arrangements and submit nomination requests for natural gas transportation service to the pipelines.
Modify the current intraday nomination timeline to increase the number of intraday nomination cycles, to provide greater flexibility to all pipeline shippers, not just those shipping on interstate pipelines that voluntarily allow more flexible nomination opportunities. The NOPR proposes to move from two to four standard intraday nomination cycles, which would occur at 8:00 a.m., 10:30 a.m., 4:00 p.m. and 7:00 p.m., all CCT.
In two separate but related orders, FERC established proceedings under the Federal Power Act [Nos. EL14-22-000, EL14-23-000, EL14-24-000, EL14-25-000, EL14-26-000, EL14-27-000] and Natural Gas Act [No. RP14-442-000].
Electric generators support shifting the start of the gas day to 4 a.m. because it "would allow generators to nominate gas to the day-ahead Timely Nomination Cycle, i.e., the most liquid cycle, to cover the morning electric ramp and the evening peak of a single electric day," according to the IRC filing.
"The morning electric ramp is driven by the public consumption of energy and is outside the control of electric grid operators. As the Commission stated in the NOPR, moving the start of the gas day earlier should address instances when gas-fired generators find they are running out of scheduled natural gas capacity during the morning electric ramp period and have to wait until the 9 a.m. CCT Gas Day start for additional scheduled gas to flow.
“The Commission's proposal to move the start of the Gas Day to 4 a.m. CCT accommodates the timing of the morning electric ramp periods across all four time zones. This proposed start time also provides generators in all regions with enhanced access to the day-ahead Timely Nomination Cycle to serve the morning electric ramp period and support electric energy and reliability service positions."
Power generators also support moving the day-ahead deadline for submitting gas nominations in the Timely Nomination Cycle to 1 p.m. CCT or later, and the four intraday gas nomination cycles proposed by FERC, IRC said. And they suggested continued evaluation of scheduling practices and coordination.
"Hourly, or more flexible, nominations could help promote additional liquidity in gas markets, because there would be additional opportunities for marketers to ship gas -- even across pipelines -- if more gas was made available in-day," according to IRC. "Additional natural gas scheduling flexibility could increase electric system operational flexibility and promote electric system reliability."
Differences of opinion between the natural gas and electricity industries over a possible restructuring of gas markets were voiced at an unusual roundtable meeting at FERC headquarters in September, and were even more clearly delineated in dozens of post-conference comments [AD14-19-00] (see Daily GPI, Oct. 2; Sept. 19; Aug. 20).
At the meeting -- which was called by Commissioner Philip Moeller and attended by no other commissioners -- electric generators and grid operators, most of them from the Northeast, said they want natural gas markets and infrastructure altered to meet their peak demand needs. Gas pipelines and producers who rallied to defend their market made it very clear that they don't think it needs radical changes.
But the concept of a natural gas trading platform, proposed by the electricity side of the debate, wasn't endorsed by the natural gas side. Revamping natural gas markets without building new infrastructure isn't likely to provide the access to gas that power generators are looking for, according to incoming Interstate Natural Gas Association of America chairman Ron Tanski, who is also CEO of National Fuel Gas (see Daily GPI, Oct. 10).