A recent series of regional technical conferences made it clear that there is plenty to be done to address coordination issues between the gas and electricity markets, but a rulemaking from federal regulators may not be the way to address those issues, according to FERC Chairman Jon Wellinghoff.
"To get a rule, it would have to be something that was uniform across the country. I'm not sure that there is a uniform problem across the country," Wellinghoff said during a media breakfast at the National Press Club in Washington, DC, sponsored by IHS The Energy Daily. "What struck me in the regional conferences I attended...is the differences between each region in the way that they operated, and because of those differences I'm not sure that it's amenable to a rulemaking."
The Commission will need to review summaries of the meetings and recommendations of Federal Energy Regulatory Commission (FERC) staff before making a final determination, Wellinghoff said.
FERC sponsored five technical conferences in recent weeks to explore coordination issues in the Mid-Atlantic, New England, Southeast, West and Midwest regions (see Daily GPI, Aug. 31; Aug. 29, Aug. 21, Aug. 24). Some power generators opposed a suggestion that they be mandated to commit to firm pipeline capacity for the delivery of natural gas. During the final conference, held at FERC headquarters last week, Marquerite Mills, vice president of fuel procurement at American Electric Power, called on interstate gas pipelines to initiate "hourly nomination cycles" and for regional transmission organizations to align their timing for awarding bids.
Coordinating the scheduling deadlines between the power and gas markets remains one of the chief concerns of power generators. Some conference participants advised that good lines of communication between pipelines and generators was the solution, and Wellinghoff said FERC wants to be part of that effort.
"We want to ensure that there are adequate communications and interfaces between the gas industry and the electric industry," he said. "One of the things that we're looking at is we may have to help the industries rationalize the schedules between the two. It turns out that gas nominations, daily nominations and scheduling in some regions are not consistent with the electric nomination scheduling. So there may be areas where we need to help the industry ensure that the two can be made consistent so that there [are] not gaps in deliverability of fuels to electric plants.
"But I don't see this as a major problem, I want to make that very clear. I think that the transition to natural gas can occur very smoothly and I think that we can ensure reliability through this transition. I think, to FERC's credit, we're on top of this issue with these regional conferences that we've had to explore the issues, both ones that would be common to all regions that FERC may be able to act on, and also ones that may be more regionally specific, where we can assist in areas with better coordination."
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