FERC has approved ISO New England’s (ISO-NE) proposal to share real-time information on natural gas-fired power generation resources with interstate gas pipeline operators in order to head off concerns about unreliable generation dispatch.

In an order issued Wednesday, the Federal Energy Regulatory Commission (FERC) accepted on an interim basis through April 30 the revisions to ISO-NE’s Information Policy.

“Our action here is intended to address immediate reliability related concerns for this winter, while providing further opportunity for review of the Information Policy and the NDA [non-disclosure agreement] accepted on a temporary basis here,” FERC said.

Last month FERC issued an order accepted the Information Policy changes and suspended them for five months. In its latest order, the Commission denied an ISO-NE request for a rehearing of the previous order.

The Commission required ISO-NE to submit a compliance filing within 30 days. “Specifically, ISO-NW should specify in the Information Policy that it will share information regarding specific generators only with the pipeline serving that generator directly, or serving the local distribution company that serves that generator, and only when it is operationally necessary, as determined at ISO-NE staff’s discretion, to ensure reliability.

“The Information Policy must also specify that ISO-NE will provide a summary of any disclosed confidential information to the affected market participant within 48 hours following disclosure,” FERC said.

The grid operator requested real time data sharing with pipelines last year, warning of “significant reliability concerns regarding generator performance that may be exacerbated during the upcoming winter” [ER13-356] (see NGI, Nov. 15, 2012). The grid operator said in its winter forecast that it expects to have sufficient capacity to meet the region’s demand for electricity, but it is concerned about New England’s reliance on natural gas. Last month ISO-NE asked the FERC to install interim rules for real-time communication with pipelines to help New England power producers get through the winter.

Prompting the request is a history of generation resources falling short of what was requested of them in times of need, ISO-NE said. The ISO was particularly concerned because the region is relying increasingly on gas-fired resources.

FERC said it “…appreciates the increasing importance of coordination between natural gas and electricity markets for purposes of ensuring reliability, and, to that end, we reiterate here our desire for the parties to continue to make good faith efforts to resolve their differences with respect to the NDA and make a future filing that provides a more permanent means to promote information sharing.” A technical conference scheduled to be held Feb. 13 “will address, among other things, information sharing and confidentiality issues,” the Commissions said.

The topic of gas pipeline capacity and the coordination between gas and electricity markets became a major issue at FERC last year. In August it held five regional conferences on gas-power coordination issues in the Mid-Atlantic, New England, Southeast, West and Midwest regions (see NGI, Sept. 3, 2012; Aug. 27, 2012). In November the Commission published the “Staff Report on Gas-Electric Coordination Technical Conferences” [AD12-12-000], and called for more conferences aimed at improving the coordination between pipes and power generators.

ISO-NE recently reported that New England’s reliance on natural gas to fuel power generators “could create operational challenges if natural gas supplies become tight this winter,” which would force the region to turn to oil- coal-fired generation “to lessen any operational risks” to the power system (see NGI, Dec. 10, 2012).

Natural gas pipeline constraints, high international prices and declining production in eastern Canada could all combine to create sometimes volatile New England gas and power prices this winter, according to the Energy Information Administration (EIA) (see related story).

Prices at the Algonquin Citygate are high because natural gas from the west and south is flowing at or near the capacities of existing pipelines, EIA said in a supplement to its Short-Term Energy Outlook, which was released earlier this month (see NGI, Jan. 14). The Algonquin Gas Transmission system “has run at high utilization…since mid-2012,” according to EIA, which also said the Tennessee Gas Pipeline system into New England has been high this winter.

Also contributing to the relatively high prices are a decline in liquefied natural gas (LNG) shipments to the Boston area and New Brunswick, Canada, brought on by global market conditions — including supply disruptions in Yemen — and a decline in wellhead production from the Sable Offshore Energy Project (SOEP) in Nova Scotia.

SOEP sends on average 80 MMcf/d into New England, down sharply from the 300 MMcf/d it supplied in 2008, according to one Federal Energy Regulatory Commission (FERC) official. SOEP production “may continue to be curtailed until spring 2013,” when necessary repairs to a subsea flow line can be made. And delays to the start-up of Encana Corp.’s Deep Panuke offshore gas project are also holding down production to New England, EIA said (see NGI, Nov. 19, 2012).

While New England has had the highest average spot natural gas prices in the nation since November, those prices have remained less expensive than those in northwestern Europe, “meaning that it continues to be more attractive to deliver a spot (or unscheduled) cargo of liquefied natural gas to Europe than New England,” EIA said. But recent forward market prices indicate that prices in New England could soon rival northwestern European prices, making New England a more attractive LNG market.

February is likely to be colder than normal in the Northeast and much of the rest of the country, but warmer-than-normal temperatures are expected to dominate in March and April, according to Weather Services International (see related story).

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