Week Ending April 22, 2016

FERC Schedules Public Discourse on Algonquin’s Proposal to Exempt Certain Capacity Releases of Electric Distribution Companies From Bidding Requirements

This Article Appears as Published in Foster Report No 3096
FERC Schedules Public Discourse on Algonquin’s Proposal to Exempt Certain Capacity Releases of Electric Distribution Companies From Bidding Requirements

FERC took an unusual step and issued notice that a public technical conference will be held on Monday, May 9, beginning at 10:00 a.m. (and ending at approximately 3:30 p.m.) to examine the issues raised in the protests and comments regarding the 2/19/16 filing made by Algonquin Gas Transmission, LLC (RP16-618) to create a mechanism (consistent with a FERC waiver) under which gas-fired generators could obtain gas pipeline capacity during winter peaks, when gas LDCs are using their own contracted capacity and interruptible pipeline capacity is virtually nil.  The concept centers on New England electric distribution state-approved programs aimed at securing firm gas capacity in the first instance and then releasing that capacity to gas-fired generators as needed to serve electric loads in the same market.  The meeting will take place at the Federal Energy Regulatory Commission, 888 First Street, NE, Washington, DC 20426.  All interested parties are invited to attend the conference.  Commission members may participate.

Algonquin’s filing proposes to exempt from the capacity release bidding requirements certain types of capacity releases of firm transportation by electric distribution companies that are participating in state-regulated electric reliability programs.  Issues to be examined at the conference include concerns regarding the basis and need for the waiver concept that Algonquin proposes.

Those interested in speaking at the technical conference should notify the Commission by April 25, by completing the online form at the following webpage: https://www.ferc.gov/whats-new/registration/05-09-16-speaker-form.asp.  Those interested in attending are encouraged, but not required, to register at the following webpage: https://www.ferc.gov/whats-new/registration/05-09-16-form.asp.

This event will be webcast and transcribed.  Anyone with internet access can navigate to the “FERC Calendar” at www.ferc.gov, and locate the technical conference in the Calendar of Events.  Opening the technical conference in the Calendar of Events will reveal a link to its webcast.

In a March 31 order, FERC put on hold until September 1 Algonquin’s February 19 proposal.  That order directed FERC staff to convene a technical conference to probe the issues raised by the parties (including a number of protests attacking the proposal as unnecessary or discriminatory).  The pipeline’s proposal is part of a controversial multi-state plan in New England – still under consideration before the public utility commissions (PUCs) – to solve the chronic problem that the region’s merchant generators generally do not see fit to commit to long-term contracts for firm gas capacity themselves.  Their reluctance is tied to the New England market structure, where independent generators lack any long-term assurance of serving loads.  The problem has led to shortages of pipeline infrastructure and consequently occasionally high spot market prices – for both natural gas and electricity – despite the region’s relative proximity to low-cost gas supplies in the prolific Marcellus shale gas region.  (FR No. 3094, pp5-10).

 

Copyright © 2016 by Concentric Energy Publications, Inc.  All rights reserved.

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