Scheduling of Gas Transportation and Electricity Production Is the Focus

In a series of orders issued yesterday, March 20, the Federal Energy Regulatory Commission proposes to revise its regulations to mandate better coordination between the scheduling of natural gas transportation and electricity production. The Commission's proposed actions focus primarily on the scheduling practices of the natural gas transportation and electricity markets, but will directly impact anyone who buys, sells or transports natural gas or generates, transmits or trades electricity.

Specifically, FERC proposes to revise three major aspects of the nationwide natural gas scheduling system:

  1. Move the start of the natural gas operating day from 9 a.m. Central Clock Time (CCT) to 4 a.m. CCT in order to ensure that gas-fired generators are not running short on gas supplies during the morning electric ramp periods.
  2. Move the Timely Nomination Cycle from 11:30 a.m. to 1 p.m. CCT to allow electric utilities to finalize their scheduling before gas-fired generators must make gas purchase arrangements and submit nomination requests for natural gas transportation service to the pipelines.
  3. Move the current Intraday Nomination Timeline to provide four standard Intraday Nomination Cycles to occur at 8 a.m. CCT (bump), 10:30 a.m. CCT (bump), 4 p.m. CCT (bump) and 7 p.m. CCT (no bump).

The proposed rule will also require all interstate pipelines to offer multiparty service agreements, similar to those already offered by some pipelines, in order to provide multiple shippers the flexibility to share interstate pipeline capacity to serve complementary needs in an efficient manner.

Recognizing that the natural gas and electricity industries are best positioned to work out the details of how changes in scheduling practices can most efficiently be implemented, FERC’s proposed rules will require the gas and electric industries to work through the North American Energy Standards Board (NAESB) to reach consensus within six months on joint industry national standards. In the event that NAESB is able to reach a consensus on revisions to the Commission’s proposals, comments on those consensus standards, as well as comments on the Commission’s proposals, are to be filed 240 days after publication of the Proposed Rule in the Federal Register.

In a separate order, the Commission is also proposing new rules to coordinate the Day-Ahead scheduling of Independent System Operators and Regional Transmission Organizations with the revised interstate natural gas pipeline schedule. And, in a third related order, FERC is proposing new rules instituting a proceeding to examine whether interstate natural gas pipelines are providing notice of offers to purchase released pipeline capacity in accordance with the Commission’s regulations.