On May 17, the New England Power Generators Association (NEPGA) filed a complaint against the ISO New England Inc. (ISO-NE or the ISO) asserting that the ISO has reinterpreted its tariff to impose a firm fuel obligation on generators that is contrary to the tariff. NEPGA argues that, in a November 5, 2012 memo, the ISO announced a new treatment of capacity resources under its tariff, which would require generators and others to maintain or arrange for sufficient fuel supplies to accommodate any potential operational requests above and beyond commitments scheduled in the day-ahead market.
As the trade association representing the vast majority of the interstate natural gas transmission pipeline companies, INGAA offers a national perspective on issues of potentially nationwide significance. INGAA has taken a lead role in the Commission’s examination of gas-electric coordination and has participated actively in the Commission’s technical conferences on this issue, including those involving ISO-NE. INGAA also has participated actively in the ISO-NE proceeding on permissible pipeline-ISO communications. Intervention in this case is a natural extension of INGAA’s efforts to date. Furthermore, this proceeding could set precedent on how generators must satisfy their capacity resource obligations for not only ISO-NE but for other ISOs and RTOs. INGAA has a direct and substantial interest in the outcome of this proceeding that cannot be adequately represented by any other party. Allowing INGAA to participate in this proceeding would be in the public interest and, because INGAA is motioning to intervene timely, INGAA’s participation will not disrupt the proceeding.
INGAA is not taking a position on whether the ISO’s tariff requires a firm fuel obligation or what is required for a generator to comply with “Good Utility Practice.” Yet, this proceeding highlights the ISO’s legitimate concern that the collective result of generators’ actions has resulted in a reduction in electric reliability and a greater risk of blackouts that could endanger the public and be very costly to the region’s economy.
The transportation services that interstate pipelines do and can provide are part of the solution to enhanced reliability in New England, not part of the problem underlying reliability concerns or NEPGA’s complaint.
INGAA recognizes that ISO-NE is considering ways to change its Forward Capacity Market. INGAA certainly appreciates the stakeholder processes in the region and the ISO’s commitment to ensuring electric reliability. Yet, at the current pace, this stakeholder process will not result in any appreciable changes to the ISO’s market rules for several years to come as the ISO already has posted the results of its Forward Capacity Auction 7, for capacity commitments through May 31, 2017.
If the ISO’s market rules are not revised soon, and any changes in the rules governing the price paid to generators for capacity (e.g., to reflect the cost of firm fuel) would not be reflected until June 2018, the pipeline infrastructure will not be there when needed. INGAA questions whether revising price signals such that they do not become effective until 2018 is enough urgency for the electric reliability benefits of the New England region.
Related
Exploring Real-Life Challenges with Ensuring Natural Gas Availability for Power and Joint Industry Suggested Mitigation Strategies INGAA Comments on FERC NOPR on Cybersecurity Incentives for Electric Utilities INGAA Incident Reporting Comments INGAA API Petition for Consideration of Gas Transmission Final Rule
