On August 6, 2012, FERC held the first of five regional technical conferences to explore ways to improve coordination between the electricity and natural gas markets. These conferences, which are open to the public, were scheduled in response to issues raised in the public comments filed earlier this year in Docket No. AD12-12-000. For purposes of the conferences, the Commission has focused on issues relevant to both industries [PDF], including: (1) communications, coordination and information sharing; (2) scheduling; (3) market structures and rules; and (4) reliability concerns.
After the first conference for the Midwest Region on August 6, several main themes emerged. The consensus among the panelists and others who spoke during the conference was:
- There is generally sufficient gas pipeline capacity in the Midwest to support current demand by electric generators and other gas users, even on peak days;
- At least in the near term, increased gas storage capacity would eliminate gas capacity concerns on peak days;
- While gas supplies are sufficient in the short term, as units are retired to comply with EPA regulations or retrofitted over the next few years, it is likely that the picture will change and create more concerns over capacity availability; and
- While most participants agreed that improving communications would help coordination, no one advocated strongly for major changes to FERC’s Standards of Conduct.
In addition, several commenters expressed their belief that changing the definitions of the gas and electric days was not necessary and would create more problems than solutions. Finally, during the discussion of reliability concerns, the FERC representatives on the panel asked a significant number of questions, directed mostly to the RTOs, about the effect of the lack of firm gas supplies on electric reliability, and how the RTOs could address those effects.
The remaining conferences are scheduled for the following dates and locations:
- Northeast Region (the ISO New England Inc. market), August 20, 2012 in Boston, Massachusetts;
- Southeast Region (includes Southern Company, Duke Energy Corp. and Progress Energy, Inc. (now Duke Energy), the Tennessee Valley Authority and other areas south of PJM Interconnection, L.L.C. (“PJM”) and east of SPP and ERCOT), August 23, 2012 in Washington, D.C.;
- West Region (covering the Western Interconnection), August 28, 2012 in Portland, Oregon; and
- Mid-Atlantic Region (the New York Independent System Operator, Inc. and PJM markets), August 30, 2012 in Washington, D.C.
To help keep gas and electric industry participants and the public better informed, FERC has added a new gas-electric coordination section to its website and has created a new Twitter feed, #FERC-GEC. There will also be a live audiocast of the next conference on August 20, available here. Check our blog after each conference for more summaries.