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FERC Reaches Another Milestone in NatGas-Electric Coordination Effort

FERC took another step forward in its efforts to improve coordination of the natural gas and electricity markets, accepting on Thursday compliance filings by a pair of western grid operators, while rejecting another from Midcontinent Independent System Operator (MISO).

Commissioners by a 4-0 vote accepted compliance filings from the California Independent System Operator [EL14-22] and Southwest Power Pool [ER15-2377 and ER14-27], and rejected a compliance filing from MISO [ER15-2256 and EL14-25]. The filings were submitted by the grid operators in response to the Federal Energy Regulatory Commission's March 20, 2014 inquiries that their scheduling, particularly their day-ahead scheduling practices, correlate with revisions to the natural gas scheduling practices adopted by FERC in Order No. 809.

FERC issued Order No. 809 in April (see Daily GPIApril 16), adopting two proposals submitted by the North American Energy Standards Board (NAESB) to revise the interstate natural gas nomination timeline and make conforming changes to their standards. The order moved the Timely Nomination Cycle deadline for scheduling gas transportation from 11:30 a.m. CCT to 1 p.m. CCT and added a third intraday nomination cycle during the gas operating day to help shippers adjust their scheduling to reflect changes in demand. A proposal to move the start of the gas day to 4 a.m. CCT was not included in the final rule.

The orders approved by FERC Thursday found that MISO had failed to show cause why tariff changes were not necessary and directed MISO to make a further compliance filing.

"These three orders represent the next milestone in the Commission's ongoing efforts to improve coordination between the natural gas and electric industries in light of the increasing reliance on the use of natural gas for electric generation," said Michael Goldenberg, senior attorney in FERC's Office of General Council. A trio of similar orders, filed by PJM Interconnection, ISO New England and New York Independent System Operator, were approved by FERC last month.

"All of the ISOs and RTOs will now provide reliability unit commitments prior to the natural gas evening nomination cycle, which is the second most liquid period for acquiring natural gas and pipeline transportation," Goldenberg said.

"The next phase of the gas-electric coordination effort is still ongoing. As the Commission has urged NAESB in Order 809 to explore the potential for faster computerized scheduling to provide shippers with more opportunities to reschedule gas, we are pleased to report that NAESB has reconvened its gas-electric harmonization committee to begin very soon to examine these issues," Goldenberg said.

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