By Rich Heidorn Jr.

WASHINGTON — Gas supply for New England and Southern California is the top reliability concern for the coming winter, FERC officials said Thursday.

Commission staff said they saw no major risks of significant disruptions this winter but that they would be closely monitoring gas supplies in the Northeast and the area around California’s Aliso Canyon storage facility.

“You’d probably be the market that keeps me up at night,” Commissioner Robert Powelson told ISO-NE Vice President of System Operations Peter Brandien at the commission’s monthly open meeting, where officials of all six FERC-jurisdictional RTOs and ISOs gave their annual presentations on winter preparedness.

Brandien earlier had pronounced himself “cautiously optimistic.”

Bull’s-Eye

“I always feel like I have a bull’s-eye when on me when I come down to talk about these things,” Brandien said, prompting laughter.

While the 2014 polar vortex jolted PJM and others to tighten rules ensuring generators’ reliability, ISO-NE has been dealing with the issue since the 2004 “cold snap,” he said. New England produced 49% of electricity using gas in 2016, up from 15% in 2000.

Since a second scare in winter 2012-13, the RTO has been relying on temporary winter reliability measures that encourage gas operators to have dual-fuel capability and access to LNG. The temporary program will give way to the Pay-for-Performance rules beginning June 1, 2018, that contain stronger capacity market incentives for securing fuel.

Brandien said tight pipeline capacity and limited visibility into LNG shipments remain his region’s concern.

“I think we’re pretty much coordinated-out,” he said when asked if additional gas-electric coordination would help New England. “The problem is we have full pipes.”

Brandien said the additional pipeline capacity provided by Spectra Energy’s Algonquin Incremental Market project in January has been offset by the retirement of the 1,500-MW coal-fired Brayton Point Power Station at the end of May.

“I actually was encouraged when I saw that some of the [gas] future prices for New England were higher than other places because those are the kind of things that are going to incent some contracts or some arrangements to be made to get [LNG] ships moving to New England,” he said.

Gas availability also could be a concern for New York City, which gets 95% of its generating capacity from gas or dual-fuel plants, said Wes Yeomans, NYISO’s vice president for operations.

The ISO’s 90-10 base case for the winter shows a statewide capacity margin of more than 11,000 MW, but that drops to 7,000 MW if generators receive only firm gas supplies and less than 4,300 MW if all gas is lost.

CAISO

The reduced capacity of the Aliso Canyon gas storage facility following the 2015 leak also was the subject of concern.

Sixty-two of the facility’s 114 wells were taken out of permanent operation. As a result, FERC staff said, the Southern California Gas system has 65 Bcf in storage, the lowest on record for this time of year since at least 2001 and far below its five-year average of 118 Bcf.

Although there were no supply interruptions this summer, staff said, Aliso Canyon’s limited storage “could challenge regional stability and increase natural gas and electricity prices” this winter. “The recent outages of SoCalGas Line 235-2 and Line 3000 may also limit flexibility in the region. This risk could also be magnified by upstream pipeline issues, like further outages or wellhead freeze-offs.”

Nancy Traweek, CAISO’s executive director of system operations, said California’s wildfires are not currently a threat to transmission but are having an impact on distribution.

Fuel Diversity not Cited

One subject that was not raised as a reliability concern by the RTO officials who spoke to FERC was fuel diversity and the continued retirement of coal generation — an issue cited by Energy Secretary Rick Perry in his call for price supports for coal and nuclear plants. FERC Chairman Neil Chatterjee on Oct. 13 praised Perry for raising the issue. (See FERC Chair Praises Perry’s ‘Bold Leadership’ on NOPR.)

In a press conference after the meeting, Chatterjee said the RTO officials were only some of those whose views will be considered by the commission in the Notice of Proposed Rulemaking (RM18-1).

“We will find out from a variety of stakeholders whether there are conditions today or in the future that we need to consider,” he said. “Perhaps the fuel mix is working for them today. As market conditions continue to change, we don’t know what the future will hold. As some of these assets are retired, that will change the fuel mix.

“We need to be constantly vigilant and monitor the grid, monitor market changes, to ensure that this winter and beyond we don’t have circumstances that could lead to catastrophic outcomes.”

Chatterjee said he was withholding judgment on whether high penetrations of wind pose a reliability concern.

Bruce Rew, SPP’s vice president of operations, said the RTO was forecasting a new wind penetration record of 66% Friday. Thanks to accurate forecasting, Rew said, the RTO has already handled penetration of 55% wind and wind output swings of 10,000 MW within a day “without any problems.” The region has added 3,000 MW of wind capacity since last winter.

[As it turned out, wind peaked at 13,039 MW in SPP Friday, short of the 13,342 MW record set Feb. 9.]

“We’re going to make a fact-based determination based on what the record reflects,” Chatterjee said. “I certainly respect the gentleman’s opinions, and I will defer to his expertise as well as others to make that assessment.”

Comments on the rulemaking are due Oct. 23.

On Thursday, a bipartisan group of eight former FERC commissioners — including former Chairmen Elizabeth Anne (Betsy) Moler, James J. Hoecker, Pat Wood III, Joseph T. Kelliher and Jon Wellinghoff — filed joint comments saying that Perry’s proposal would be “a significant step backward from the commission’s long and bipartisan evolution to transparent, open, competitive wholesale markets.”

“The commission’s adoption of the published proposal would instead disrupt decades of substantial investment made in the modern electric power system, raise costs for customers and do so in a manner directly counter to the commission’s long experience,” they said.