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FERC Technical Conference to Focus on Winter Gas, Electric Price Spikes

At the end of what has proven so far to be an unusually harsh winter, FERC will hold a technical conference to evaluate the U.S. electric grid's performance and review interaction between the natural gas and electricity markets, Acting Chairman Cheryl LaFleur said Thursday.

While the official announcement has yet to be released by the Federal Energy Regulatory Commission (FERC), the technical conference is to be held in Washington, DC, April 1, LaFleur said.

"Hopefully it will shed light on these recent cold weather events upon consumers and identify potential lessons learned," said Commissioner John Norris. "I think in particular, this technical conference will provide an opportunity for the Commission, industry, stakeholders and the public to evaluate the tight supply conditions and high energy prices experienced during this cold weather snap over the last month and a half and hopefully soon to wrap up. Maintaining confidence in our jurisdictional markets is paramount, and I believe it is our responsibility to fully explore the reasons behind these high energy prices."

Last month, following requests from the New York ISO (NYISO) grid operator and mid-Atlantic grid operator PJM Interconnection to waive the $1,000/MWh cap on cost-based power generation bids, LaFleur said FERC was keeping its eyes on infrastructure and on making sure that markets are properly working -- but said natural gas and electricity price spikes brought on by record cold were a sign that the markets were working (see Daily GPI, Jan. 28).

Multiple polar vortices this winter have driven the number of recorded heating degree days to unusual highs, according to National Oceanic and Atmospheric Administration data (see Daily GPI, Feb. 6a). And the 2013-2014 chill is far from over. The Northeast, North Central and lower Mississippi Valley can expect unusually cold temperatures to continue through most of the April, according to forecasters at Weather Services International (WSI) (see Daily GPI, Feb. 4).

Earlier this month FERC invoked for the first time its emergency authority under the Interstate Commerce Act to help alleviate "dangerously low" propane supplies in the Midwest and Northeast (see Daily GPI, Feb. 10). The order directed Enterprise TE Products Pipeline Co. LLC to temporarily provide priority treatment to propane shipments from Mont Belvieu, TX, to the Midwest and Northeast regions as they suffered through severe cold weather (see Daily GPI, Feb. 6b). FERC subsequently extended the priority treatment through Feb. 21 (see Daily GPI, Feb. 11).

"There's still an ongoing concern," Commissioner Tony Clark said Tuesday. "This is an issue we'll be dealing with for several weeks. Hopefully this action, in concert with others, will help alleviate that...I think the response was certainly appropriate, but I would also recognize that it's not a silver bullet. There are a lot of actions that are being taken up and down government at different jurisdictional levels that are also helping to alleviate that, as well as things that are being done in the private sector."

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