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ICF International Gas-Electric Interdependency: The Stark Realities of Keeping the Lights On

Explore the connection between gas and electricity in maintaining reliable power supply and the impact of shale gas boom, extreme weather events, and regulatory changes.

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ICF International Gas-Electric Interdependency: The Stark Realities of Keeping the Lights On

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  1. ICF International Gas-Electric Interdependency: The Stark Realities of Keeping the Lights On March 26, 2015 Asim Z. Haque Vice-Chairman Public Utilities Commission of Ohio

  2. Ohio’s Shale Boom Source: Marcellus Shale Coalition

  3. Ohio’s Shale Boom • 93.7% increase in natural gas production from 2012 to 2013 • 98.2% increase in core shale-related employment from 2011 to 2014 • $32.7M annually in federal, state, and local taxes • Over $1B in royalty payments since 2000 Source: Ohio Department of Natural Resources

  4. Polar Vortex 2014 Percent Increase on Day Prior-Day-Ahead, Real-Time, and Gas-Pricing January 6th and 7th, 2014 Source: ICF International citing SNL, ISO data

  5. Polar Vortex 2014 Outages Examples of “Other” include outages caused by boiler air, gas and control systems; storm damage; and electrical issues. Source: PJM Interconnection, L.L.C.

  6. EPA’s Proposed Clean Power Plan Building Block #2 Dispatch Existing and Under Construction Natural Gas Combined Cycle (NGCC) Units to up to 70% Capacity Factor Building Block #3 Increasing Use of Renewable & Nuclear Facilities Building Block #4 Increasing Demand-Side Energy Efficiency Building Block #1 Increasing Efficiency of Coal-Fired Generation

  7. Coal-Fired Electric Generation Facilities in Ohio

  8. FERC Gas/Electric Dockets • Coordination between Natural Gas and Electricity Markets, AD12-12 • FERC ordered exploration into information sharing and scheduling issues through quarterly reporting from its staff and updates from RTO/ISOs regarding coordination efforts. • PUCO commented encouraging FERC to undertake short and long term solutions for the inevitable transition from coal-fired to natural gas-fired generation.

  9. FERC Gas/Electric Dockets • Communication of Operational Informationbetween Natural Gas Pipelines and Electric Transmission Operators, RM13-17 • FERC adopted a rule allowing interstate natural gas pipelines and transmission operators to share non-public operational information to promote the reliability and integrity of their systems. • PUCO commented in support of information sharing.

  10. FERC Gas/Electric Dockets • Coordinationof the Scheduling Processes of Interstate Natural Gas Pipelines and Public Utilities, RM14-2 • FERC initiated steps to improve coordination between natural gas pipeline capacity and electricity markets by (1) proposing to revise the natural gas operating day and scheduling practices, (2) examining whether RTO/ISOs day-ahead scheduling procedures are just and reasonable, and (3) requiring interstate pipelines to provide for the posting of offers to purchase released capacity. • PUCO commented agreeing with FERC’s scheduling changes and attempts to harmonize the gas and electric markets.

  11. PJM Capacity Performance • Filed proposal with FERC in December of 2014 • Similar to ISO New England’s “Pay for Performance” design • If a resource fails to deliver when called upon, it will be required to pay a performance payment based on its shortfall • Generators may also include the costs of firm fuel supply in their bids for recovery

  12. Pipeline Infrastructure Spending Source: ICF International

  13. Will Gas-Fired Electric Generators Purchase Firm Pipeline Capacity?

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