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FERC Studying Natural Gas Effect on Grid FERC Studying Natural Gas Effect on Grid

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FERC Studying Natural Gas Effect on Grid

HOUSTON – Washington’s top official for the nation’s electricity grid said on Thursday that the Federal Energy Regulatory Commission is studying the effect an influx of natural gas could have on the grid.

“We’re starting to investigate that,” commission Chairman Jon Wellinghoff told National Journal Daily during a major energy conference. “That’s a very interesting question. We’re trying to determine whether or not there needs to be changes in pipeline-operation procedures, in tariffs and economic structures between gas suppliers and generators to ensure that if larger amounts of gas are used for base-load purposes that we have an adequate gas infrastructure to meet that.”


The U.S electricity supply is expected to shift toward natural gas over the next several decades after the recent discovery of vast deposits of shale gas throughout the nation. Right now, the electricity grid is primarily designed for coal-fired generation and nuclear power. Natural gas and its role transforming the power sector have been a dominant theme at the 30th annual Cambridge Energy Research Associates conference this week.

FERC’s focus on the national implications of natural gas on the grid was prompted by a series of blackouts this year in Texas and gas shortages in Arizona, New Mexico, and other states. Soon after that, the commission launched an investigation into what caused those blackouts and shortages, which government officials and experts attribute to extreme cold weather conditions.

“We’re looking at that full situation under the weather-related issues that precipitated that to see also if there are other issues regarding gas delivery to generation,” Wellinghoff said. “We’re using that as sort of a jumping off point to perhaps do a study that would look at it on a nationwide basis.”


He said officials couldn’t determine whether an explicit correlation exists between the blackouts and gas shortages and an influx of natural gas on the grid. But it’s vital to find out, because the private sector is turning to natural gas. The government would need to resolve unforeseen effects – such as blackouts or gas shortages – if a correlation was found.

“We’re saying that there may have been some relationship between gas operations and those blackouts; we don’t know,” Wellinghoff said. “There may be none at all. We want to look at that, and we want to use that then as an initiation to potentially have a further inquiry to how gas delivery relates to gas generation and what needs to be done from a regulatory standpoint to ensure reliability of that generation that’s used in natural gas.”

A key utility executive whose company provides electricity to Texas doubts there's a correlation.

“In a single word, no,” said Chris Weston, CEO of Direct Energy, at the conference. “It was an extreme weather event.” He said that the government – both at the federal and state level – needs to ensure that power plants are equipped to handle extreme cold weather.



This article appears in the March 10, 2011 edition of National Journal Daily PM Update.

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