A major natural gas pipeline group has called on FERC to provide pipelines with assurance that information shared with power generators will not be a violation of the Natural Gas Act (NGA) or agency regulation, and would not expose pipelines to potential civil penalties in the event that a disclosure would cause economic harm to a power generator.

And another natural gas group has warned that information sharing could lead to market manipulation, gaming of the market and rigged prices.

In its filing at the Federal Energy Regulatory Commission, the Interstate Natural Gas Association of America (INGAA) questioned whether the sharing of information between the gas and electric markets would violate the Natural Gas Act (NGA) and Commission regulations governing open-access and undue discrimination. “Some have [even] suggested that information-sharing conceivably could expose a pipeline to civil damages to the extent [an] unauthorized disclosure causes a generator economic harm.

“In authorizing the sharing of any additional data, the Commission must affirm that such sharing will not constitute undue discrimination given the Commission’s overriding public policy interest in ensuring reliable electric generation. Even if a change to the timing or substance of pipeline information sharing enhances gas-electric coordination, the Commission must provide pipelines the assurance that the communications the Commission intends for pipelines to engage in with dispatching entities are permissible under Section 4(b) of the [NGA] and its regulations,” INGAA said [AD12-12].

Responding to a Dec. 7 notice of request for comments, INGAA further called on FERC to clarify that pipelines seeking to enhance information-sharing with dispatching entities in order to promote electric reliability “should not be subject to civil liability…as a result of that participation.” The Commission plans to hold a technical conference soon to further address the issue of information-sharing.

The American Public Gas Association (APGA) said first of the three questions posed by FERC in its notice was very broadly worded. FERC asked”should natural gas pipeline and electric utility system operators be allowed to exchange information that is not publicly posted,” said the

“It is not clear whether the ‘information that is not publicly posted’ is information that is not made available because it is non-public information, the disclosure of which would violate the Commission’s standards of conduct or, while not within the ambit of the standards of conduct, it is not made available to the public for other reasons, such as competitive sensitivity,” APGA said.

“If the information is non-public transmission information within the standards of conduct, then APGA is hard-pressed to imagine what circumstances, other than a dire emergency, would warrant disclosure. Transportation information is usually non-public for a reason, which is the potential such information provides for gaming, market manipulation and other violations of the [NGA] and Federal Power Act.

“The potential for bad actors to reap huge gains seems especially significant in the various regional transmission organizations (RTO) and independent system operator (ISO) regions because of, among other factors, the ripple effects of rigged market-clearing prices.”

If power generators, pipeline marketing affiliates or employees of RTOs/ISOs were to find out in advance that non-firm transportation would or would not be available during a given period, “the potential for abuse [would be] huge,” APGA said.

The Electric Power Supply Association (EPSA) and the New England Power Generators Association Inc. (NEPGA) said their members “are concerned about the amount of information that may be requested by a power system operator or pipeline, and they seek a greater understanding of what that information would be used for and how it would be protected, the two groups told the Commission.

“There is a possibility that pipelines could be overwhelmed with data from power system operators, thus leading to a greater risk of loss, misuse of information etc, and perhaps with little or no benefit to reliability. Thus it is important that the information pipelines receive should be carefully tailored to address specific needs and should be conveyed only in emergency situations in order to minimize the risk of pipelines being overwhelmed.

The two groups also were concerned over which pipeline personnel would have access to the information. “EPSA and NEPGA see a good role for FERC [on] setting out guidelines for information sharing, with these considerations: What information is being shared? How and when is that information being used? How should system operators and pipelines collect and store that information to ensure that the information is sufficiently separated and protected?

EPSA and NEPGA further said that several power generators are located behind local distribution companies, which means that they are considered industrial customers and therefore are among the first customers to be curtailed during gas supply shortages. “One possible solution to this issue is to propose that generators receive a new priority level, perhaps between other industrial customers and residential customers.”

The electric groups said when a generator sees that it needs additional gas supply, it will often turn to the secondary market for pipeline transportation and the spot market. “The Commission should be careful not to inadvertently create any barriers to this already well established and well functioning commercial environment.”

While citing support for the Commission’s coordination efforts and saying it looked forward to the technical conference, INGAA declined to respond to specific questions in the Dec. 7 notice. “INGAA looks forward to hearing the dispatching entities’ thoughts on what additional pipeline information, beyond the data INGAA members already make publicly available, would advance electric reliability if it was shared with dispatching entities.

“[But] INGAA is not in a position to make specific proposals to presume what dispatching entities might propose.”

It questioned whether the proposed improvements for information-sharing would add to the “substantial body of information” that INGAA member pipelines already make available through electronic posting. INGAA recommended that this serves as a “baseline” for stakeholders to consider what types of additional information should be shared between pipelines and dispatching entities.

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