By Kurt L. Krieger
On March 20, the Federal Energy Regulatory Commission (“FERC”) issued three separate but related items as part of FERC’s ongoing efforts to address gas and electric industry coordination issues arising from the increased reliance on natural gas for electricity generation.
First, in a Notice of Proposed Rulemaking (“NOPR”), FERC proposed to amend its regulations relating to the scheduling of transportation service on interstate natural gas pipelines to better coordinate the scheduling practices of the natural gas and electricity industries, as well as to provide additional scheduling flexibility to all shippers on interstate natural gas pipelines. Click here to view the NOPR.
Second, FERC is initiating a proceeding to ensure that scheduling practices by Independent System Operators (“ISOs”) and Regional Transmission Organizations (“RTOs”), particularly day-ahead scheduling practices, correlate with the NOPR’s proposed, revised interstate natural gas pipeline scheduling practices. Click here to view the Order initiating the proceeding.
Third, FERC issued an Order to Show Cause requiring all interstate pipelines to submit filings to FERC within 60 days that either: revise the pipeline’s tariff to provide for the posting of offers to purchase released capacity; or that demonstrate the pipeline tariff’s compliance with FERC’s existing regulation requiring such posting capability. The Order to Show Cause may be found here.
In the order initiating the proceeding pertaining to ISO and RTO scheduling practices, the FERC identifies the key coordination problem as follows (at Ps 7 and 8):
In the NOPR (at Ps 8 and 9), FERC’s proposals include:
FERC recognizes that the natural gas and electricity industries are best positioned to work out the details of changes in scheduling, and proposes that they attempt to reach consensus, through NAESB, and file that consensus within 180 days after publication of the NOPR in the Federal Register, or notify FERC of the inability to reach consensus. Comments on the NOPR and any consensus report are to be filed within 240 days.
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