Brattle Consultants Submit Comments to the Federal Energy Regulatory Commission on Coordination between Natural Gas and Electricity Markets
On March 30, 2012, Brattle consultants Matthew O’Loughlin, Frank Graves, Steve Levine, Metin Celebi, and Anul Thapa submitted comments to the Federal Energy Regulatory Commission (FERC) in response to Commissioner Moeller’s request for comments regarding the role that the FERC should have in overseeing better coordination between the natural gas and electric power industries.
The motivating concern is that there is adequate coordination to prevent outages and reliability problems. The authors commented that this issue will have a different character in different parts of the country, so the FERC should first develop an analytical template to evaluate region-specific conditions and then use this to have RTOs, pipelines, and other oversight organizations develop a thorough evidentiary foundation of the nature of the risks faced by each region. For those regions that identify a potential risk of un-served gas demand, the authors suggest a second stage to design tactical solutions. These could include: information sharing between gas and electric market participants; new obligations on electricity market participants to have firm gas supply or other firm, flexible alternatives available during peak gas demand periods; different kinds of contingency (risk) planning; and/or new pipeline services and pricing to reflect short-term operational issues, akin to ancillary services now provided on electric transmission grids.
Their comments are available for download below.