Federal Energy Regulatory Commission (FERC) Commissioner Philip Moeller has asked the energy industry to respond by Feb. 29 on how the agency can best coordinate the natural gas and electricity markets to avoid a repeat of the severe outage that curtailed natural gas service to thousands of customers in the Southwest last winter.
“As we have seen over the last few years, natural gas is being used much more heavily in electricity generation. This trend appears likely to accelerate as coal-powered generation is retired, renewable energy resources require more backup by natural gas plants, and low natural gas prices encourage more use of gas,” he said.
Given the co-dependence of the electricity industry on natural gas and the natural gas industry on electricity, he asked industry to specify what role the Federal Energy Regulatory Commission should have in overseeing better coordination. And “what duties, if any, should be delegated to the North American Electric Reliability Corp., the North American Energy Standards Board, or other entities?”
Moeller further asked whether the Commission should help to harmonize trading in the gas and power markets. “Within each day, electricity trading differs significantly from gas trading. Similarly, on a day-to-day basis, the various gas markets may not be open on the same days as the corresponding electricity market, especially over Saturdays, Sundays and holidays.”
The expanded use of natural gas for electricity generation is likely to change the flows of gas on pipeline systems, he also pointed out. “How should FERC help to harmonize these markets?”
Moreover, “to what extent should FERC consider modifying its existing Standards of Conduct with regulated utilities — either on an emergency basis or in a more fundamental manner — to assure greater coordination of these industries.”
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