It’s been more than a decade since participants in the natural gas and power sectors identified the lack of gas-electric coordination as a key risk for the operations of both industries. 

And while there’s been progress since then, the steady growth of gas-fired generation and continued disconnect between the sectors’ business models gave the Federal-State Current Issues Collaborative plenty to discuss on the subject during an April 30 meeting at FERC headquarters. 

“I think I saw a number that 47% of all power gen in America now is gas,” FERC Chair Mark Christie said at the meeting, which brought together representatives of FERC and the National Association of Regulatory Utility Commissioners (NARUC). “So, gas has become just absolutely critical to our to our electric system’s reliability.” 

But gas also is important to manufacturers, as well as residential and other end-use customers who rely on the fuel to stay warm in winter, he added. 

Gas generation is important to the grid not only for the huge volume of power it produces, but also because its operational characteristics enable it to balance intermittent resources, which have been growing rapidly, NERC CEO Jim Robb said. 

“I’ve also been a very outspoken critic of the state of natural gas-electric industry coordination since my time as the CEO of WECC in the Western Interconnection and over the past seven years in my time as the CEO of NERC. I’ve described these challenges as the most admired problem in the energy sector, and it’s time to stop admiring them,” Robb said. 

The electricity industry has experienced five well-publicized winter reliability events over the past 14 years that implicated gas-electric coordination, though changes made in response to those events bore fruit this past winter as industry participants made it through several weeks of arctic cold without incident, he added. (See FERC, NERC Say Grid Winter Recommendations Working.)  

But more work is needed, as highlighted by the massive April 28 blackouts on the Iberian Peninsula. It will take some time for the industry in Spain and Portugal to determine the cause of the outages, and it could be weeks before the true causes are known, Robb said. 

“There are, however, a couple of observations that do seem clear,” he said. “By all open-source reports, there was very little traditional generation in operation at the time of the cascade. While other factors may play a role, the lack of spinning generation and the inherent inertia it creates undoubtedly allowed the situation to spiral out of control more quickly than had those plants been operating.” 

Lack of Inertia

Inverter-based resources such as wind and solar do not offer the grid the same levels of inertia that a large spinning mass provides, which means when grid frequency deviates from a stable level, there are fewer resources capable of absorbing that change, allowing outages to cascade more broadly, Robb said. Some new inverters could address that issue, but the technology has not been proven, he said. 

Largely islanded systems, like those in ERCOT and the U.K., already are running into inertia issues today, said ISO-NE CEO Gordon van Welie. But those problems are not expected to be felt in the Eastern Interconnection for another decade or so, he said. 

Van Welie contended that gas-electric coordination issues are still relevant today because the gas system and electric grid are really one system aimed at delivering energy. ISO-NE’s position at the end of the gas pipeline network, without any local supplies of the fuel, makes those issues more acute for New England. 

“Fundamental differences between the gas and electric markets require acknowledgment and specific actions to mitigate and/or account for those differences,” van Welie said. “The electric system is planned and built on forecast mode, while the gas system relies on ad hoc, long-term customer contracts. This makes it difficult for the gas and electric systems to function efficiently as interdependent systems.” 

He pointed out that gas pipelines are built based on firm contracts signed with demand, and that there is no central planning to meet peak demand plus a reserve margin like on the power grid. 

Ohio Public Utilities Commissioner Dennis Deters asked what can be done with large data centers that are “bringing their own generation” to get to market quickly and what impact that could have on the gas system. 

That development illustrates the possibility that the gas industry is not planning for new demand, van Welie said. 

‘Intense’ Planning

But natural gas utilities do have to plan to meet demand on the coldest day of the year, when the gas system delivers three times as much energy as the grid does on the hottest day, American Gas Association CEO Karen Harbert said. 

“We do have intense resource planning, and we do have long-term contracts so that the people that have contracted for the gas get the gas — full stop,” Harbert said.  

She said data center operators used to start their development process at offices of state governors, seeking to get the best tax treatment possible.   

“And then the last place they would go would be the utility. Where’s the first place they are going now? It’s the utility,” she said. 

That allows the utilities to explain how much headroom is available on their system and how long it could take to connect major new demand, she added. Those questions increasingly are driving where data centers go, and Harbert said it’s important to keep those facilities in the U.S. 

Harbert expressed agreement with many in the electric sector that new pipelines and other infrastructure — especially storage — will be needed to ensure reliability for both systems. The politics of expanding pipelines in New England have for years been fraught, but van Welie said an increased focus on affordability in the region could start to change that.  

“I think the real gap, though, is that there was an unintended consequence when we restructured the industries, particularly the electric industry, 25 years ago,” van Welie said. “So, in a place like [Dominion Energy’s Virginia territory] or in Florida, when you build a new gas power station today … you bring the package along to the state regulator and you get approval for the whole thing — the power plant, plus the firm gas transportation contracts, which then results in infrastructure. So, when we unbundled the industry 25 years ago, we broke those linkages.” 

Contributing to the problem is the fact that local gas delivery companies must plan around firm load for their direct customers, but not for electric generators. Resolving that issue is important to both industries because extreme cold can cause issues on either the gas or electric system that then degrade the reliability of the other, as seen in Texas in February 2021 during Winter Storm Uri, van Welie said. (See Texas Supremes Hear Arguments in Last Uri Case.) 

“It’s not a criticism, it’s a reality,” van Welie said. “We’re not planning it to meet the full demand that’s being placed on that system, both the average demand that we placed on it over time as well as the instantaneous demand that is placed on it for purposes of balancing the electric system.” 

Expansion of gas storage represents one way to deal with the issue. On that front, the gas industry has increased the amount of LNG storage in the Northeast in recent years, since the region lacks the right geology for natural storage caverns, said Harbert.  

But while that helps her members, the disconnect in the business models means the issues van Welie highlighted are still there. 

Dominion Energy Virginia has faced nothing like the issues New England confronts around gas-electric coordination, but the fuel has become the backbone of its system in recent years, said Edward Baine, the company’s president of utility operations. The utility won approval in February for its Brunswick-Greensville LNG storage facility to serve two of its gas plants that lacked alternative supplies. 

“Between 2019 and 2023, these two power stations contributed more than 25% of the company’s energy production and achieved a combined capacity factor of approximately 75%,” Baine said. “Importantly, Brunswick and Greensville are two power stations in our fleet that do not presently have on-site backup fuel or access to multiple gas facilities.”