The Federal Energy Regulatory Commission (FERC) moved ahead on April 16 with efforts to improve coordination between the wholesale natural gas and power-generation markets. The issue has gained importance as gas-fired generating stations supply a growing percentage of the nation’s electricity.
The FERC final rule, together with prior commission actions, are intended to ensure reliable and efficient operation of both the interstate gas transmission system and electric utilities, the commission said.
FERC voted to maintain as standard procedure that the U.S. gas trading day starts at 9 a.m., Central time, waiving a proposal to move the start of the trading day back to 4 a.m., Central time.
“The commission concluded that, while certain efficiencies could be achieved through a better alignment of the natural gas and electric operating days, the record in this proceeding does not justify changing the start time for the nationwide natural gas day,” FERC said in statement. “The final rule recognizes that several regional efforts continue to address the misalignment between the gas day and the regional electric days.”
Don Santa, president and CEO of the Interstate Natural Gas Association of America, the major trade organization representing interstate pipeline operators, lauded the FERC’s decision.
“We are gratified that the Federal Energy Regulatory Commission listened to the entire natural gas industry, including the interstate pipeline operators represented by the Interstate Natural Gas Association of America,” he said.
The ruling represents the culmination of more than three years of FERC efforts to evaluate whether changes are needed to scheduling practices of the gas and electric industries in order to better ensure reliable and efficient operations of gas pipelines and power generators.
In a March 2014 Notice of Proposed Rulemaking, the commission proposed changes to the nomination timeline for gas pipelines but provided the two industries a year to consider revisions to the proposal.
The commissioners did adopt two proposals submitted by the Houston-based North American Energy Standards Board to revise the gas nomination timeline and related trading standards. The private organization is a trade group seeking to better coordinate the needs of gas suppliers and power generators.
Related to the decision, the FERC adopted a proposal to move the Timely Nomination Cycle deadline for scheduling gas transportation from 11:30 a.m., Central time, to 1 p.m., Central time, and a proposal to add a third intraday nomination cycle during each gas operating day to help shippers adjust scheduling to reflect changes in power demand. The final rule takes effect 75 days after publication in the Federal Register.
Contact the author, Paul Hart, at pdhart@hartenergy.com.
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