By Michael Brooks
The electric and natural gas industries remain divided over the start of the gas day, nine months after federal regulators proposed changing the start time from 9 a.m. CT to 4 a.m. CT.
On March 20, the Federal Energy Regulatory Commission issued a Notice of Proposed Rulemaking proposing the change to better align it with electric operations (RM14-2). The commission gave the North American Energy Standards Board six months to reach consensus among its gas and electric industry stakeholders. (See FERC: Six Months to Move Gas, Electric Schedules.)
But NAESB reported in September that the two sectors remained split, with the gas industry resisting any change in the start time. When the comment period on the NOPR closed at the end of November, there was no evidence of any change in the stalemate.
Thus it will be up to FERC to decide whether to change the start time over the gas industry’s objections.
Whether Chairman Cheryl LaFleur has the votes to force a change is unclear. The commission approved the NOPR on a 3-1 vote with LaFleur, Commissioner Philip Moeller and former Commissioner John Norris in support. Commissioner Tony Clark dissented, saying he wanted to give the industries more time to reach consensus before FERC “put its thumb on the scale” in favor of a change.
Since then, the panel has added Commissioner Norman Bay and Arkansas regulator Colette Honorable has been nominated to replace Norris. (See related story, FERC Nominee Honorable Gets Bipartisan Support at Senate Hearing.)
In their comments, stakeholders from both industries were largely supportive of other modifications proposed by NAESB.
Besides changing the start of the gas day, FERC proposed moving the deadline to schedule gas for the Timely Nomination Cycle from 11:30 a.m. CT to 1 p.m. CT and increasing the number of intraday cycles from two to four. NAESB’s proposals were similar: it proposed the same start time for the Timely Nomination Cycle, but it suggested moving the end time from 4:30 p.m. CT to 5 p.m. CT. NAESB also added one extra intraday cycle to the proposal, instead of FERC’s two.
But the standards board was unable to bring the two industries to an agreement regarding the gas day, with electric favoring the earlier gas-day start time so it more closely aligns with the electric day, and gas saying the time change is unneeded and may be disruptive to gas markets.
Battle Lines Remain in Place
In its late September filing detailing its modifications, NAESB said that stakeholders on the Gas Electric Harmonization Committee had narrowed 13 proposals to four, each containing identical cycle schedules but different gas-day start times.
“Despite forum participants casting over 13,000 votes on 56 different motions, no single proposal gained the supermajority support required of both [electric and gas] quadrants to reach consensus on a single proposal,” NAESB said.
The board instead left the start time question up to FERC, submitting a proposal with the provisions that had common agreement while replacing all references to the start time in the standards with a question mark.
While some stakeholders suggested minor alterations to NAESB’s proposed cycle schedules, they each fell into one of two camps when it came to the gas day start time.
“Changing the start of the gas day is unnecessary to achieve the commission’s objectives in this proceeding and could create unintended adverse consequences to the natural gas industry,” said the Natural Gas Council, which represents companies in all segments of the gas supply chain. In comments filed late last month, the council urged FERC to adopt NAESB’s proposed cycle schedules, which it said would address generators’ concerns over running out of gas toward the end of the gas day, as demand for electricity ramps up during the morning.
The council also noted the regional disparity between generators who wanted an earlier start time, with those on the West Coast siding with the gas industry in maintaining the status quo. The proposed change would mean a 2 a.m. PT start time.
“Disrupting the entire natural gas market by moving the start of the gas day would be an overwhelming undertaking,” the council said. “The commission should not require a change to the national gas day to address a problem that is more limited and regional in nature.”
RTOs, meanwhile, support the earlier start time.
“The current start of the gas operating day … requires electric generators to nominate gas over two electric days. Gas scheduled during the day-ahead Timely Nomination Cycle covers the evening peak of one electric day, and the morning electric ramp of the following electric day,” the ISO/RTO Council said in its comments. “Schedules for the second electric day, which correspond to the morning electric ramp, are not yet known when generators nominate gas. Moving the gas operating day to an earlier time would allow generators to nominate gas in the day-ahead Timely Nomination Cycle, i.e., the most liquid cycle, to cover the morning electric ramp and the evening peak of a single electric day.”
The IRC represents all nine RTOs in North America, including CAISO, which the council said also supported an earlier start time. A number of RTOs filed their own comments as supplements to the IRC’s.
“Moving the gas day to 4 a.m. CT or earlier, coupled with changing the Timely Nomination Cycle to 1 p.m. CT, will enable owners of gas-fired generators needed for the peak morning period to timely nominate and schedule gas supply to support their ability to generate electricity at the start of the morning peak,” said ISO-NE, which noted New England’s heavy reliance on natural gas and its past difficulties procuring it.
MISO and SPP also voiced their support for the earlier start time, with SPP also proposing an even later start to the Timely Nomination Cycle.
Representing Diverse Views
Some stakeholders stayed neutral in the start-time discussion, as their membership was too diverse and divided to take a position on either side of the issue.
In its comments, the Electric Power Supply Association, which represents players in both the gas and electric industries, said it supported NAESB’s modifications and that it could not support either start time because its members were divided. But it also noted that there was a broad consensus on one aspect of the start time.
“While there are EPSA members on each side of this issue in terms of the 4 a.m./9 a.m. debate, there is clear consensus that some other time between 4 a.m. and 9 a.m., or different times set for different regions of the country, is not acceptable or workable,” EPSA said.
The Edison Electric Institute, which represents U.S. investor-owned utilities, also refrained from taking a position on the gas-day, but did offer support for NAESB’s modifications. It also urged FERC, regardless of what it decides, to “provide the necessary lead time to ensure that the changes are made in a coordinated manner that maintains the reliability of both the electric and the natural gas systems.”
EEI recommended that FERC implement the changes during a “shoulder month,” preferably in the spring, when demand isn’t as high.
