The North American Energy Standards Board (NAESB) has started a standards project aimed at improving coordination between the natural gas and electricity markets, with the goal of helping to prevent issues like those that beset the bulk power system during February’s winter storms.
In a press release issued Tuesday, NAESB said its board of directors voted to approve the project, which was proposed by SPP, at its meeting Thursday. The organization hopes to complete the new standards and submit them to FERC by the end of next year.
February’s cold snap brought extremely low temperatures to large parts of Texas and the Midwest and led to widespread generation outages, derates or failures to start that lasted for days in some cases and led to more than 23 GW of manual firm load shed. (See Slow Storm Restoration Sparks Anger in Texas, South.) A report by staff from FERC, NERC and the regional entities released last month found that natural gas facilities accounted for more than 50% of generator failures, both in terms of the number of units and in their total nameplate capacity. (See FERC, NERC Release Final Texas Storm Report.)
The joint report urged that Congress, state legislatures, and regulatory agencies require natural gas facilities to implement and maintain cold weather preparedness plans, and that generator owners and operators “identify the reliability risks related to their natural gas fuel contracts.”
Staff also called on the electric and natural gas industries to strengthen their winter preparedness and coordination, in light of the mutual interdependencies exposed by the storms. For example, some parts of the gas distribution system failed because they lacked power, leading to further outages at gas-fired generators.
NAESB’s project is intended to build off of the joint report’s findings, as well as the work of its own Gas-Electric Harmonization Committee, which “has been meeting since June to … complement the joint inquiry.”
The organization has worked with FERC on gas-electric coordination before; the commission first adopted coordination standards submitted by NAESB in Order 698, issued in 2007. FERC in 2015 approved an update to the standards with Order 809. The standards provide requirements for communication between interstate pipelines and gas-fired power plants regarding fuel requirements and operational issues that might impact gas delivery.
Earlier this year the commission ordered utilities to implement the latest version of NAESB’s Standards for Business Practices and Communication Protocols for Public Utilities (RM05-5). (See NAESB Standards Gain Final FERC Approval.)
In an email to ERO Insider, a spokesperson for SPP said February’s storms drove home to the RTO the importance of fuel supply issues, leading the organization to add its first member from the gas pipeline industry, Southern Star Central Gas Pipeline, in order to “strategically align with fuel resources and enhance the coordination between the electric and gas industries.” The email called NAESB’s standards project a chance to “kick-start the industry process with gas and electric market participants already at the table.”
“I am pleased that the NAESB board of directors endorsed this standards project and determined to place the item on all three quadrant annual plans with a goal of initiating the development of new and enhanced gas and electric coordination business practices early next year,” said Michael Desselle, SPP’s chief compliance and administrative officer, as well as the chairman of NAESB’s board.
