Wednesday, November 21, 2012

FERC Orders Additional Technical Conferences on Coordination Between Natural Gas and Electricity Markets

 

By Elizabeth B. Teuwen

In August of this year, FERC convened five regional technical conferences to address a number of issues implicated by the growing need to coordinate the natural gas and electric industries.  On November 15, 2012 FERC issued an order further addressing the issues raised by these technical conferences and concluded that additional technical conferences are necessary.  See Coordination Between Natural Gas andElectricity Markets, 141 FERC ¶ 61,125 (2012).

Leading up to the August technical conferences, FERC solicited comments from all industry participants on a wide range of coordination issues including communications, reliability, and scheduling.  Parties were then invited to discuss these issues in a regional context at the technical conferences held in various parts of the country. 

In the November Order, FERC noted that individual industry participants have already begun to undertake certain coordination measures.  However, FERC identified information sharing and scheduling as two areas of concern common to all regions of the country that require additional discussion.  FERC has ordered two additional technical conferences to separately deal with these concerns.  With regard to information sharing, FERC directed Commission staff to consider whether additional guidance or new regulation might be needed to ensure adequate communications between the electric and natural gas industries, especially during emergencies.    FERC also questioned whether the scheduling practices of each industry need to be modified and harmonized to promote better efficiencies for both industries.

In addition, FERC recognized that regional transmission organizations (RTOs) and independent system operators (ISOs) have a unique perspective on coordination issues as they affect the day-to-day operations of energy markets and the reliability unit commitment process.   FERC has ordered each RTO/ISO to report to the commission on two separate dates next year (May 16th and October 17th) to relate results of their recent attempts to refine their practices.  FERC has also ordered its staff to report quarterly in 2013 and 2014 on the progression of natural gas and electric coordination within each region.  At the end of these two years FERC will determine whether further reporting is required and whether other actions may be necessary to continue improving coordination efforts.
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