
[Federal Register Volume 77, Number 166 (Monday, August 27, 2012)]
[Notices]
[Pages 51795-51798]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-20904]


-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. AD12-12-000]


Coordination Between Natural Gas and Electricity Markets

Supplemental Notice of Technical Conference

    As announced in the Notices issued on July 5, 2012 \1\ and July 17, 
2012,\2\ the Federal Energy Regulatory Commission (Commission) staff 
will hold a technical conference on Tuesday, August 28, 2012, from 9 
a.m. to approximately 5:30 p.m. local time to discuss gas-electric 
coordination issues in the West region.\3\ The agenda and list of 
roundtable participants for this conference is attached. This 
conference is free of charge and open to the public. Commission members 
may participate in the conference.
    The West region technical conference will be held at the following 
venue: DoubleTree by Hilton Hotel Portland, 1000 NE Multnomah Street, 
Portland, OR, 97232, USA, Tel (reservations and other information): 1-
503-281-6111, 1-800-996-0510 (toll free).
---------------------------------------------------------------------------

    \1\ Coordination between Natural Gas and Electricity Markets, 
Docket No. AD12-12-000 (July 5, 2012) (Notice Of Technical 
Conferences) (http://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=13023450); 77 FR 41184 (July 12, 2012) (http://www.gpo.gov/fdsys/pkg/FR-2012-07-12/pdf/2012-16997.pdf).
    \2\ Coordination between Natural Gas and Electricity Markets, 
Docket No. AD12-12-000 (July 17, 2012) (Supplemental Notice Of 
Technical Conferences) (http://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=13029403).
    \3\ As indicated in the July 5, 2012 notice, for purposes of 
this technical conference, the West region includes the Western 
Interconnection.
---------------------------------------------------------------------------

    If you have not already done so, those who plan to attend the West 
region technical conference are strongly encouraged to complete the 
registration form located at: www.ferc.gov/whats-new/registration/nat-gas-elec-mkts-form.asp. There is no deadline to register to attend the 
conference. The dress code for the conference will be business casual. 
The agenda and roundtable participants for the remaining technical 
conferences will be issued in supplemental notices at later dates.
    The West region technical conference will not be transcribed. 
However, there will be a free audiocast of the conference. The 
audiocast will allow persons to listen to the West region technical 
conference, but not participate. Anyone with Internet access who 
desires to listen to the West region conference can do so by navigating 
to www.ferc.gov's Calendar of Events and locating the West region 
technical conference in the Calendar. The West region technical 
conference will contain a link to its audiocast. The Capitol Connection 
provides technical support for audiocasts and offers the option of 
listening to the meeting via phone-bridge for a fee. If you have any 
questions, visit www.CapitolConnection.org or call 703-993-3100.\4\
---------------------------------------------------------------------------

    \4\ The audiocast will continue to be available on the Calendar 
of Events on the Commission's Web site www.ferc.gov for three months 
after the conference.
_____________________________________-

    Information on this and the other regional technical conferences 
will also be posted on the Web site www.ferc.gov/industries/electric/indus-act/electric-coord.asp, as well as the Calendar of Events on the 
Commission's Web site www.ferc.gov. Changes to the agenda or list of 
roundtable participants for the West region technical conference, if 
any, will be posted on the Web site www.ferc.gov/industries/electric/indus-act/electric-coord.asp prior to the conference.
    Commission conferences are accessible under section 508 of the 
Rehabilitation Act of 1973. For accessibility accommodations, please 
send an email to accessibility@ferc.gov or call toll free 1-866-208-
3372 (voice) or 202-208-1659 (TTY), or send a FAX to 202-208-2106 with 
the required accommodations.

[[Page 51796]]

    For more information about this and the other regional technical 
conferences, please contact: Pamela Silberstein, Federal Energy 
Regulatory Commission, 888 First Street NE.,Washington, DC 20426, (202) 
502-8938, Pamela.Silberstein@ferc.gov;Sarah McKinley, Federal Energy 
Regulatory Commission, 888 First Street NE., Washington, DC 20426, 
(202) 502-8004, Sarah.McKinley@ferc.gov.

    Dated: August 20, 2012.
Kimberly D. Bose,
Secretary.
[GRAPHIC] [TIFF OMITTED] TN27AU12.000

Coordination Between Natural Gas and Electricity markets

Docket No. AD12-12-000

West Region--August 28, 2012, Portland, OR

Agenda

9-9:15 Welcome and Opening Remarks
9:15-9:45 Regional Energy Infrastructure Presentation (FERC staff)
9:45-12 First Roundtable Discussion: Gas-Electric Coordination and 
Market Structures in the West

    The Western region consists of bilateral markets, trading hubs, and 
the organized wholesale energy markets of the California ISO (CAISO), 
and varying access to fuel supplies and natural gas storage across 
several sub-regions. Public and non-public utilities may participate in 
these markets. Commenters in the West stress the need for regional and 
even sub-regional approaches to gas-electric coordination, in light of 
the different market structures and mix of resources that co-exist. The 
Commission anticipates that the differing perspectives of the Pacific 
Northwest, Rocky Mountain, Desert Southwest, and California sub-regions 
will be reflected in the discussion of gas-electric coordination topics 
and challenges.
    Many within the Western region expect that a significant portion of 
new generating capacity installed in the next ten years will use 
natural gas as its primary fuel, which has raised concerns for some 
regarding the sufficiency of pipeline capacity to accommodate this 
growth in gas-fired generation. Approaches to addressing infrastructure 
adequacy also vary across the region. Some commenters stress the need 
for cost recovery mechanisms or other market enhancements that provide 
incentives for appropriate fuel arrangements. Others emphasize 
regionally-based approaches to determine whether this is demand for 
additional pipeline capacity and services, or whether there are ways 
the region can better deploy existing capacity to meet demand growth. 
Some commenters suggest that the Commission has a role to play, in 
terms of possible refinements to its blanket certificate process.
    While some pipelines offer flexible pipeline and storage services, 
commenters suggest that more flexibility and additional nomination 
opportunities are needed by operators of gas-fired generation in some 
areas. Commenters differ on the impact of the mismatch in the 
scheduling and delivery timelines between the gas and electric 
industries, with some calling for greater harmonization between natural 
gas trading and transportation nomination and scheduling timelines and 
electricity trading and scheduling times within the West, and others 
contending that the gas-electric mismatch presents no significant 
challenges or that it is a longer-term issue.
    Roundtable participants are encouraged to be prepared to discuss 
the following:
    1. Describe the policies and practices in your region that impact 
the procurement of gas transportation and storage capacity purchases by 
gas-fired generators. What changes do you expect, if any, as the use of 
gas for electric generation increases? Salt River Project in its 
comments suggests the possible development of a gas-sharing pool 
similar to regional electric reserve sharing pools.\5\ Would this type 
of development help to address the disincentives to long-term gas 
supply and transportation contracting noted by the California Public 
Utilities Commission (CPUC)? \6\ Some commenters state that the West 
already engages in substantial outage and maintenance coordination 
between the electric and pipeline industries. How, if at all, is the 
resulting knowledge of pipeline conditions taken into account in 
electric dispatch and pricing decisions, and how is the resulting 
knowledge of electric system conditions taken into account in pipeline 
operational decisions?
---------------------------------------------------------------------------

    \5\ Salt River Project Agricultural Improvement and Power 
District March 30, 2012 Comments at 2.
    \6\ CPUC March 30, 2012 Comments at 7.
---------------------------------------------------------------------------

    2. How does your region approach the question of gas infrastructure 
adequacy? Are there reforms to the organized wholesale electric market 
rules that CAISO could consider as a possible means to allow a gas-
fired generator to recover the costs of contracting for gas 
infrastructure expansion needed to serve electric markets in the 
region? To what extent do bilateral contracts provide for the recovery 
of such costs, both in CAISO and in the areas that do not have 
organized markets? Commenters like Puget Sound Energy, Inc. (Puget 
Sound Energy) suggest that the immediate need to add infrastructure 
could be minimized by allowing pipeline capacity release for periods 
longer than one year at greater than maximum tariff rate.\7\ What would 
be the advantages and drawbacks to these proposals?
---------------------------------------------------------------------------

    \7\ Puget Sound Energy March 30, 2012 Comments at 10.
---------------------------------------------------------------------------

    3. What types of services offered by natural gas pipelines and 
storage providers throughout the West would best meet the needs of gas-
fired generators in the region? Recognizing that some pipelines offer 
additional nomination opportunities beyond the current standards, would 
generators like to see additional operating flexibility in pipeline 
services, and if so, what kind? For example, one commenter

[[Page 51797]]

recommends that the Commission encourage gas storage operators to offer 
24-hour service and balancing services. Another described an 
``intermittent gas'' product conceptually similar to conditional firm 
electric transmission service.\8\ Would proposals like these address 
generators' flexibility needs? Are these ideas feasible in the West, 
and, if so, how could they be structured? What financial assurances 
would gas pipelines and storage providers need to provide such 
services?
---------------------------------------------------------------------------

    \8\ Salt River Project Agricultural Improvement and Power 
District March 30, 2012 Comments at 2; MidAmerican Energy Holdings 
Company March 30, 2012 Comments at 15.
---------------------------------------------------------------------------

    4. How diverse (or consistent) are nomination, scheduling and 
commitment practices across the region? How do the regions' utilities 
and generators manage the mismatch between the scheduling and 
commitment timelines on the electric side in local time and the NAESB 
standard gas pipeline practices? Are there areas in the West where this 
is more of a problem to generators than elsewhere? If so, can the gas 
and electric market scheduling timelines be adjusted in a way that 
improves matters for those regions where it is a problem?

12-1:30 Break
1:30-2:45 Second Roundtable Discussion: Communications/Coordination/
Information-Sharing

    Each of the sub-regions that make up the West has experienced 
unexpected events that highlighted the need for improved communication 
and coordination between electric and gas entities: For example, 
Denver/the Rockies in December 2006; the Pacific Northwest in December 
2009; California in September 2010; and the Southwest in February and 
September 2011.\9\ Western commenters in this proceeding identified 
possible improvements including enhanced communication during emergency 
outages, coordination of maintenance outage scheduling, and FERC 
clarification of allowed information sharing under existing rules, 
particularly the Standards of Conduct.
---------------------------------------------------------------------------

    \9\ See ``Investigation of the Controlled Outages of February 
18, 2006 by Public Service Company of Colorado,'' Docket No. 06I-
118EG, Initial Report to the Colorado Public Utilities Commission by 
the Staff of the Colorado Public Utilities Commission, July 7, 2006; 
``Plugging Into Natural Gas,'' http://pnucc.org/sites/default/files/RidingNorthwestDec2009Event_0.pdf; http://www.cpuc.ca.gov/PUC/events/sanbruno.htm; ``Report on Outages and Curtailments During the 
Southwest Cold Weather Event of February 1-5, 2011,'' http://www.ferc.gov/legal/staff-reports/08-16-11-report.pdf; ``Arizona-
Southern California Outages on September 8, 2011,'' http://www.ferc.gov/legal/staff-reports/04-27-2012-ferc-nerc-report.pdf.
---------------------------------------------------------------------------

    Comments suggest that improving communications protocols between 
the gas and electric industry is one issue that may lend itself to more 
immediate resolution than other gas-electric coordination issues. This 
panel will discuss whether there are adequate communication protocols 
among the various stakeholders to assure appropriate gas-electric 
coordination and identify potential solutions to any issues.
    Roundtable participants are encouraged to be prepared to discuss 
the following:
    1. How are coordination and information-sharing regarding both 
emergency and planned outages handled by affected gas and electric 
entities in the different regions? Are improvements needed? Several 
entities in the Northwest stated that the gas and electric utility 
planners in the Northwest have initiated regular meetings to address 
resiliency in a coordinated manner.\10\ What kind of coordination 
occurs and what kind of information is shared and with whom in 
preparation for extreme events that simultaneously and significantly 
affect both the gas and electric sectors. Are there any limitations on 
communication that seem unnecessarily restrictive? Should entities 
coordinate weather forecasts?
---------------------------------------------------------------------------

    \10\ Puget Sound Energy March 30, 2012 Comments at 6; Northwest 
Gas Association, et al., March 29, 2012 Comments at 1.
---------------------------------------------------------------------------

    2. The gas pipelines in California and the CAISO have worked to 
improve their coordination of planned outages. What is the impact of 
electric system outages upon the gas system, and vice versa? Are 
further changes needed to allow for the coordination of planned 
outages? Will the Pipeline Safety, Regulatory Certainty and Job 
Creation Act of 2011 impose new requirements upon inter-industry 
communication and coordination? If so, how are the industries planning 
for those new requirements?
    3. Several commenters identified the nature of information that 
currently is available and shared between gas and electric entities. Is 
there additional information that needs to be shared that currently is 
not being shared, and are all the relevant and necessary parties 
included? Are the information-sharing mechanisms appropriate to the 
circumstances? Are improvements needed and who should be responsible 
for implementing improvements?
    4. Parties in the West region expect increased reliance on gas-
fired generators to result in greater daily fluctuations in gas usage 
than have been experienced in the past. For example, the 2012 
California Gas Report prepared by the California Gas and Electric 
Utilities projects that there will be higher daily fluctuations in gas 
usage in the future, associated with the increase in renewable 
generation in the state.\11\ What changes in communications and real 
time data sharing protocols will be needed to accommodate these 
expected variations?
---------------------------------------------------------------------------

    \11\ ``2012 California Gas Report Prepared by the California Gas 
and Electric Utilities,'' July 2012, at 11; http://www.socalgas.com/regulatory/documents/cgr/2012%20CGR_Final.pdf.
---------------------------------------------------------------------------

    5. Based on the experience in your region, what aspects of the FERC 
Standards of Conduct (which govern the relationship between a 
transmission provider and its marketing function) need to be clarified 
or potentially revised to improve gas-electric communications and 
coordination? For example, Puget Sound Energy recommends that the 
Commission should clarify that the exception for a transmission 
provider to disclose non-public transmission information with its 
merchant function should not be limited solely to an emergency on the 
transmission provider's system. Rather, Puget Sound Energy suggests 
that the exception be broadened to include non-emergency situations to 
prevent an emergency and also to permit communications to alleviate 
emergencies on a nearby/regional transmission provider's system.\12\ 
Describe specific non-emergency situations to be covered by the 
suggested clarification to the emergency exception to prohibited 
communications. Although the Standards of Conduct do not restrict 
transmission providers from communicating with each other, describe how 
the Standards of Conduct prevent individuals managing resources on a 
number of transmission systems in a region from conferring with each 
other as suggested by Puget Sound Energy.

    \12\ Puget Sound Energy March 30, 2012 Comments at 12-13.

2:45-3 Break
3-4:30 Third Roundtable Discussion: Reliability

    The bulk electric system is typically planned, as required by the 
mandatory reliability standards, to meet projected customer demands and 
system performance criteria, even under single element contingency 
conditions. Interstate natural gas pipelines are planned and expanded 
to meet firm gas delivery contracts between the pipelines and one or 
more shippers. As noted

[[Page 51798]]

above, almost all commenters from the West indicated they expect an 
increased reliance on natural gas generation in the coming years, due 
to economic and national policy factors. Commenters also expressed 
concerns about the future reliability and interdependencies of the bulk 
electric system and the interstate natural gas pipeline system as the 
amount of natural gas-fired generation increases.
    Roundtable participants are encouraged to be prepared to discuss 
the following:
    1. Is there a need for a minimum level of dependability in the fuel 
supply for gas-fired generators? How would it be defined, who would 
define it, and what would be the mechanism for accomplishing this? To 
what extent is the dependability of fuel supply a required 
specification in standardized contract documents for buying and selling 
electricity? Should this be addressed regionally, and how can it be 
addressed in the regions without organized markets? What role can or do 
State Commissions play in defining or otherwise supporting requirements 
for fuel dependability in all of the Western subregions?
    2. Several commenters express concern about whether there are 
particular reliability concerns in areas that lack underground natural 
gas storage. What tools are available to regions to manage gas-fired 
generation swings and preserve reliability, in areas without gas 
storage? What happens when there are events that impact pipeline 
deliverability in those regions?
    3. To what extent do the regions in the West coordinate studies of 
the natural gas and electric systems to analyze forecasted resource mix 
and/or interdependency risks from curtailments or contingencies? Can 
this be addressed through existing transmission planning processes or 
are different processes needed?
    4. Commenters from California and the Northwest highlighted ongoing 
coordination efforts that allowed participants from the natural gas and 
electric industries, as well as state regulators, to assess emergency 
response plans and provided a forum to discuss and implement 
improvements.\13\ Are sufficient emergency coordination procedures in 
place in the West? Are these procedures routinely tested through 
functional exercises or simulations? Should all regions within the West 
routinely conduct joint functional exercises?
---------------------------------------------------------------------------

    \13\ See, e.g., Northwest Industrial Gas Users March 30, 2012 
Comments at 3; Northwest Gas Association, et al. March 29, 2012 
Comments at 1.

4:30-5:30 General Discussion of Other Region-Specific Issues Affecting 
---------------------------------------------------------------------------
Gas-Electric Coordination

    Electric markets in the West function differently in California, 
the Pacific Northwest and in the rest of the Western Interconnect. To 
the extent not discussed in the earlier roundtable discussions, we'll 
discuss these differences as well as any specific issues of concern to 
one or more of these sub-regions not touched on earlier.
    Roundtable Participants:

[rtarr8] Richard Adams, Executive Director, Pacific Northwest Utilities 
Conference Committee
[rtarr8] Ed Brewer, Vice President, Commercial Operations, Williams--
Northwest Pipeline
[rtarr8] Will Brown, Director-Commercial, Kinder Morgan West Region 
Pipelines
[rtarr8] Tina Burnett, Senior Energy Analyst, The Boeing Corporation 
(on behalf of Process Gas Consumers Group)
[rtarr8] Stefan Byrd, Senior Vice President Commercial and Trading (on 
behalf of MidAmerican Energy Holdings Company) (representing the common 
views of Pacific Corp Energy and Kern River Gas Transmission)
[rtarr8] Jan Caldwell, Manager, Marketing Services, Williams--Northwest 
Pipeline
[rtarr8] Shelley Corman, Senior Vice President, Commercial & 
Regulatory, Transwestern Pipeline Company
[rtarr8] John Dagg, Director of Gas Transmission and System Operations, 
Southern California Gas Company and San Diego Gas & Electric
[rtarr8] Lynn Dahlberg, Director Marketing Services, Williams--
Northwest Pipeline
[rtarr8] Curtis Dallinger, Director, Gas Resource Planning, Xcel Energy
[rtarr8] Randy Friedman, Director, Gas Supply, Northwest Natural Gas
[rtarr8] Paul Goldstein, Managing Director, Sempra U.S. Gas & Power
[rtarr8] Roger Graham, Director Wholesale Marketing & Business 
Development, Pacific Gas & Electric
[rtarr8] Steve Harper, Director Gas Supply, Avista Corp.
[rtarr8] Robert Hayes, Vice President of Physical Trading and 
Operations, Calpine Corporation
[rtarr8] Tom Haymaker, Slice Manager, Clark Public Utilities
[rtarr8] Lee Hobbs, Senior Vice President, TransCanada US Pipelines
[rtarr8] Skip Horvath, President, Natural Gas Supply Association
[rtarr8] Kevin Johnson, Director, Gas Control, Kinder Morgan Western 
Pipelines
[rtarr8] Dan Kirschner, Executive Director, Northwest Gas Association
[rtarr8] Ray Miller, Vice President, Pipeline Management, Kinder Morgan 
Pipelines
[rtarr8] John Moura, Associate Director, Reliability Assessment, NERC
[rtarr8] Liam Noailles, Manager, Market Operations, Xcel Energy
[rtarr8] Kent Price, Senior Marketing Representative, Salt River 
Project
[rtarr8] Pete Richards, Director, Operations, Gas Control & 
Measurement, Williams--Northwest Pipeline
[rtarr8] Clay Riding, Director Natural Gas Resources, Puget Sound 
Energy
[rtarr8] Andrew Soto, Senior Managing Counsel, American Gas Association
[rtarr8] Reuben Tavares, Electric Generation System Specialist, 
California Energy Commission
[rtarr8] Justin Thompson, Director of Business Support, Arizona Public 
Service Company
[rtarr8] William Tom, Senior Manager, Day-Ahead Operations, Pacific Gas 
& Electric
[rtarr8] Gregory Van Pelt, External Affairs Manager, California ISO
[rtarr8] Craig Williams, Market Interface Manager, Western Electricity 
Coordinating Council

[FR Doc. 2012-20904 Filed 8-24-12; 8:45 am]
BILLING CODE 6717-01-P


