Two major electricity grid operators, which together coordinate the movement of wholesale electricity in 14 of the nation’s most populated states and the District of Columbia, have agreed to a long-term strategy that includes a call for development of a shared understanding of regional natural gas delivery constraints on power generation.
The New York Independent System Operator (NYISO) and regional transmission organization PJM Interconnection said the strategy is an outgrowth of their efforts to improve management of transmission congestion across both of their markets.
“Currently, work is under way for an interregional study that will examine the impacts of natural gas expansion on PJM and the NYISO’s systems, both near and long-term,” the grid operators said. “The study will look at existing and planned pipeline and generation facilities and identify contingencies on the regional natural gas system that could adversely affect reliability. The study also will evaluate the adequacy of the regional gas pipeline system to meet electricity system needs.”
The study follows five FERC-sponsored technical conferences this past summer to explore coordination issues between the gas and electricity markets (see Daily GPI, Aug. 31; Aug. 29, Aug. 21, Aug. 24). At those meetings some power generators opposed a suggestion that they be mandated to commit to firm pipeline capacity to deliver natural gas.
Some generators also said they viewed shale gas as a doubled-edged sword for the Mid-Atlantic region, supplying it with abundant, low-cost supplies while at the same time putting pressure on an already over-taxed pipeline infrastructure. 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. And John Scarlata, vice president of gas supply at PSEG Energy Resources & Trade LLC, said the Mid-Atlantic region’s pipeline infrastructure “is very good and is getting much better with the advent of the shale expansion…With the infrastructure improvements, we have seen a real basis collapse in the region, which I think is overall probably good for the consumer.”
Federal Energy Regulatory Commission (FERC) Chairman Jon Wellinghoff and Commissioner Philip Moeller have offered differing opinions on the need for a formal rulemaking to resolve the inconsistencies in scheduling between natural gas pipelines and power generators (see Daily GPI, Sept. 19; Sept. 6).
The board of the National Association of Regulatory Utility Commissioners recently said it would consider a resolution to address the issue of coordinating gas and electricity grids at its next national meeting (see Daily GPI, Sept. 28).
Other elements of the grid operators’ long-term strategy include coordinating planning processes to facilitate efficient transmission investments and deploying smart grid technologies that maintain system balance through the use of robust data, communications and automated systems.
Market-to-market software and processes are scheduled to be operational in January, they said.
The footprints of NYISO and PJM stretch from the Midwest to the Atlantic coast and include Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New York, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.
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