The McGraw-Hill Companies, Inc. : U.S. FERC's Moeller Sees Need for Full Rulemaking on Gas/Electric Coordination
09/18/2012| 02:45pm US/Eastern
WASHINGTON, Sept. 18, 2012 /PRNewswire/ -- A formal rulemaking by the U.S. Federal Energy Regulatory Commission (FERC) may be needed to resolve inconsistent scheduling between the electricity and natural gas markets, FERC member Philip Moeller said Tuesday at a Platts Energy Podium newsmaker event in Washington.
Among the options available to the commission to address the increasing tension between gas suppliers and power generators: a full rulemaking. Such would be a significant procedural step, but Moeller said it could be necessary to help harmonize the two sectors during an era of growing gas-fired generation.
The issue of working out the different schedules for the two markets "needs the full attention of the commission" to ensure momentum for a solution, he said. Such a FERC rulemaking effort could take between two and three years, said Moeller, a Republican on the five-member commission.
In the meantime and in advance of the next heating season, FERC must facilitate full communication between pipelines and generators, he suggested.
However the commission proceeds on promoting better coordination, it must recognize that energy companies have tried unsuccessfully to resolve the issue before. Utilities, pipeline companies and others devoted major resources to the issue in the "last round of these discussions seven, eight, nine years ago," Moeller said.
"They're never getting those years back in their lives," he said. "If we go down this path, we need FERC invested in this process so that it's not a waste of time."
Moeller also framed some of the issues in the gas/electric markets coordination debate. "The earlier you have a trading day begin, the less you know about the following day," he said. "And it's difficult to take more gas if you don't know if you're going to be dispatched on the electric side."
While the commission considers whether a market scheduling rule is needed, it is also looking at updating its code of business practices "to make sure that the right people are talking to each other" during a gas shortage for generators. The legal analysis that would be required to make changes is under way at FERC, Moeller said.
The warm 2011-12 winter in the eastern U.S. "may have masked" the significant challenges posed by gas-electric coordination, he said.
Moeller is serving his second term on the commission. Prior to joining FERC, he headed up the Washington, D.C., office of Alliant Energy and before that worked for Calpine, also in the nation's capital. From 1997 through 2000, Moeller served as an energy policy adviser to U.S. Senator Slade Gorton of Washington.
A recording of the Philip Moeller session is available via podcast at this link: http://www.platts.com/PodcastsDetail/EnergyPodium/2012/September/energypodium18
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