A Department of Energy-funded study concludes that PJM has the best alignment of electric and natural gas infrastructure among U.S. regions on the Eastern Interconnection.

The draft “baseline assessment” conducted for the Eastern Interconnection Planning Collaborative analyzed the electric-gas structure for PJM, TVA and four RTOs on nine measures, including tariffs, pipeline connections and storage capacity.

PJM was judged to have favorable conditions for six of the categories, with two neutral and one — pipeline/local distribution company penalties — negative. Unsurprisingly, the report found ISO New England has the most challenges.

The report noted that PJM has benefited from access to new shale gas supplies in addition to conventional producing regions in the Gulf of Mexico and the West.

Gas-Fired Capacity             

The study identified 161 gas-capable power plants larger than 15 MW in PJM with an installed capacity totaling 78.7 GW (43% of PJM’s total ICAP).

New gas-fired generation is largely replacing coal plant retirements in Eastern MAAC and Southwestern MAAC, “while elsewhere in PJM continued reliance will be on mainly coal units, even taking into consideration the continued retirements of coal capacity,” the report said.

Slightly more than half of the generating capacity is located behind local distribution company citygates, with the remainder supplied by interstate pipelines.

LDCs

As elsewhere in the country, most of PJM’s generators supplied by local pipelines have interruptible service.

“The majority of gas-fired generation behind the citygate has chosen interruptible service in light of the high cost of local facility improvements to provide firm transportation service,” the study found. “Hence, the majority of gas-fired generation at the local level behind [citygates] is furnished on a non-firm basis, exposing gas-fired generation to curtailments or interruptions during cold snaps or outage contingencies.”

For those LDCs that provide firm service to generators, it is generally the lowest priority firm service. Several of the LDCs serving generation in PJM have supply or transportation rates specifically for gas-fired generation, but most do not.

Due to state regulations, LDCs in eastern PJM generally require gas-fired generators on interruptible contracts to have dual-fuel capability. Dual-fuel requirements are much less common in LDCs in western PJM and MISO, the study found.

Interstate Pipelines

Two companies, Transco and Texas Eastern, supply about half of the gas-fired capacity on interstate pipelines. In total, 13 of the 28 interstate pipelines that traverse PJM serve generation.

Sixty-four generators are supplied by interstate pipelines, including five with access to more than one provider and one that also has access to LDC gas.

Only 13 generators hold firm mainline transportation contracts in their own names, 10 of them with sufficient volumes to fuel more than half of their nameplate capacity. Most generators rely on gas marketers for supplies.

PJM, like MISO, NYISO and ISO-NE, does not require generators to hold firm transportation. “The competition inherent in electric markets, in which generators must clear based on price, may discourage the inclusion of incremental costs associated with firm transportation in bid structures, even where such costs could be recoverable under market rules,” the report said.

Next Steps

Comments on the draft — the first of four “targets” that EIPC is studying — are due March 14.

Later studies will:

• Evaluate the capability of the natural gas systems to meet gas demand over the next decade (target 2);
• Identify contingencies on the natural gas system that could hurt electric system reliability, and vice versa (target 3), and
• Review the operational and planning issues affecting the availability of dual fuel-capable generation (target 4).

Comments on the target 2 sensitivities are due today.

EIPC will hold a stakeholder webinar March 21 to discuss the results from target 2 and begin work on target 3. A “mid-point” stakeholder meeting June 25 and 26 will discuss on-going work in targets 3 and 4.