Natural gas pipelines will move their nominating schedules to later in the day, and PJM will move its day-ahead schedule forward, under plans revealed last week to increase the coordination between the gas and electric industries.

PJM’s Frank Koza told the Markets & Reliability Committee Thursday that gas industry officials offered an early nominating schedule and a third intraday nomination at a meeting with the ISO/RTO Council last month.

Rae McQuade, president of the North American Energy Standards Board, confirmed yesterday that the gas industry is developing proposals that will help coordination between the two industries. “I think that everyone is really committed to looking at the market issues and determining what solutions are out there for continued dependence for natural gas generation,” she said.

Natural gas industry officials developed a “straw man” proposal that would move the timely gas nominating schedule from its current 11:30 a.m. Central Time spot to one later in the day. The straw man also proposes a new intraday 3 cycle and modifies the two other intraday cycles to allow nominations during regular business hours.

The proposal was developed by the Natural Gas Council, a group comprised of the American Gas Association, America’s Natural Gas Alliance, the Independent Petroleum Association of America, the Interstate Natural Gas Association of America, the Natural Gas Supply Association and the American Public Gas Association.

“We believe that the NGC straw man addresses in large part the electric industry’s concerns about the mismatch in the gas and electric schedules,” the group said in a statement released yesterday by INGAA communications director Cathy Landry. It said further discussion and approvals on both sides will be necessary for permanent changes.

Fantastic News

Andy Ott, PJM executive vice president for markets, called the proposal “fantastic” news that will help PJM with its daily scheduling of generators. Ott said PJM will also have to move its day ahead scheduling earlier in the day. He said PJM will seek to make a FERC filing by the end of the summer to enact changes in time for next winter.

Ott said the gas industry also needs to provide more scheduling staffing on weekends.

The disparity between the gas and electric schedules has been identified as an obstacle to increasing coordination of the two industries as the growth in power demand has strained pipeline capacities.

A report issued last May by the North American Electric Reliability Corp. highlighted what it called the “planning gap” between the gas and electric days: “…The electric day, in essence, completes its planning for the next day by 6:00 p.m. of the current day. While the completed electric utility plan identifies which electric units will run the next day (which in turn provides the basic information to project the next day’s fuel consumption), the pipeline deadlines for nominations historically have been at 10:00 a.m. of the current day. Thus, there is a six‐or‐more‐hour gap of incompatibility between the two traditional approaches to planning and scheduling.”

“The net result of this scheduling gap is that electric generator nominations, with their relatively large gas loads, are based upon estimates by the individual fuel planners of each Generator Owner (GO) between 24 and 36 hours in advance. The issue could be magnified when scheduling on a Friday, since gas markets are closed for the weekend.”

Other Challenges

The Gas Council said it agreed to make changes although it “would result in material changes and costs” to the industry.

“It is important to recognize that while scheduling enhancements will facilitate greater coordination, this straw man does not address the fundamental issue of how to finance infrastructure additions where capacity is tight and where competitive wholesale market rules do not provide incentives for generators to hold pipeline capacity,” it added.

FERC Action

A November order by the Federal Energy Regulatory Commission allows gas pipeline operators to exchange non-public operational information with PJM and other RTOs to better coordinate operations. (See FERC OKs Gas-Electric Talk.)

Because PJM has not yet amended its rules to accommodate the order, it received a temporary waiver from FERC to allow it to communicate with pipelines during last month’s cold snap. PJM held conference calls with pipelines and individually validated nominations for the RTO’s gas generators.