FERC Thursday issued a proposed rule seeking public comment on how to improve the coordination between the natural gas and electricity industries to avoid a repeat of the severe gas service outage that curtailed service to thousands of customers in the Southwest last winter.

The Commission’s proposed rule formalizes and assigns a docket number (RM96-1-037) to a request made by Commissioner Philip Moeller earlier this month for industry comments on the “harmonization” of the gas and electricity industries (see Daily GPI, Feb. 7).

“I think [this will be] a multi-year effort that we will be undertaking…Given the very clear trend we have of using more gas to generate electricity in this country, these issues are only going to get more difficult and more challenging unless we address then,” Moeller said. “I look forward to all of us having a good thorough discussion on both short-term and long-term solutions to minimize the potential [supply] disruptions going forward.”

Commissioner John Norris cited a recent reliability “stress test” that was conducted by Federal Energy Regulatory Commission (FERC) and the North American Regulatory Utility Commission “to bring to the attention of state commissioners the set of issues that we’re going to be dealing with” in the gas and power markets. He said the North American Energy Standards Board (NAESB) has created a board-level committee to identify and assess “harmonization” issues, while the Interstate Natural Gas Association of America and the North American Electric Reliability Corp. are addressing infrastructure concerns.

“So there’s a great recognition” about coordination issues emerging across both industries, Norris said.

Commissioner Cheryl LaFleur called for industry to comment on five areas:

The proposed rule approved by the Commission 4-0 would amend its regulations to incorporate by reference, with certain exceptions, the latest version of business practice standards adopted by the Wholesale Gas Quadrant of NAESB with respect to natural gas pipelines.

The new standards include provisions that would support coordination between the gas and electric industries, standards for pipeline postings of information regarding waste heat, as well as revisions to the standards designed to allow more efficient processing of wholesale natural gas transactions, according to the Commission’s proposed rule.

With respect to the standards regarding coordination between the gas and power industries, the new standards provide public utilities and other shippers with clear identification of changes in pipelines’ system conditions by creating 15 new notice types posted on the pipelines’ websites. The new notice types alert shippers to intraday bumps, operational flow orders and other critical system changes.

FERC proposes that pipelines implement the new standards beginning four months after issuance of the final rule. It said pipelines would be required to file revised tariffs reflecting the new standards at least two months before implementation of the standards.

Comments are due within 30 days of publication in the Federal Register.

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