Gas-Electricity

How Do We Make Electricity from Gas?

Bolted under the cargo bay of each NASA space shuttle is a piece of equipment about a metre long. It is shaped like a narrow box and weighs a little over 100 kilograms. This small device is one of the most important items on board the shuttle. If it fails, NASA will call off an entire mission, bringing the crew back to Earth. The function of this device – small enough to fit on your desktop – is power generation. Known as a fuel cell, it efficiently produces enough electricity to run all the equipment on the spacecraft, including the crucial life support systems.
Educational Aim The aim of this lesson is to describe the key components of fuel cell systems and the process that fuel cell systems use to generate electricity from gas without combustion. Key Words for Searching Online Fuel cell systems, fuel cells, fuel cell stack, hydrogen, fuel processors, fuel reformers, electrolysis cells, alkaline fuel cell, proton exchange membrane fuel cell, polymer electrolyte membrane fuel cell, direct alcohol fuel cell, direct methanol fuel cell, direct ethanol fuel cell, phosphoric acid fuel cell, molten carbonate fuel cell, solid oxide fuel cell.
Key Learning Points
1. Fuel cells, like batteries, transform chemical energy into electricity. However, unlike batteries, fuels cells don't store electrical energy. Rather, they convert energy from gases using chemical reactions directly into electrical energy without combustion.
2. Mr William Grove produced the first fuel cell in 1839, over 150 years ago. He based his experiment on the fact that sending an electric current through water splits the water into its component parts of hydrogen and oxygen. Grove tried reversing the reaction – combining hydrogen and oxygen to produce electricity and water, which is the basis of a simple fuel cell.
3. Fuel cells are generally comprised of three main components: 1) input gases – a fuel and an oxidant;) a fuel processor; and a fuel cell.
4. Input gases – the fuel: Most fuel cells use hydrogen as a fuel. Hydrogen makes up 90 percent of the universe and is the third most abundant element on the Earth's surface. Other types of fuel cells use alcohols such as methanol or ethanol as a fuel.
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5. Input gases – the oxidant: Most fuel cells use oxygen as an ‘oxidant’, taken from the surrounding air. Oxygen makes up 21 percent of the volume of air and 89 percent of the mass of water.
6. Fuel processor: This is a device used to create hydrogen gas, because the gas is usually bound with other atoms in the form of a molecule. The two main fuel processing technologies for fuel cell systems are ‘fuel reformers’ and, less commonly, ‘electrolysis cells’:
1. Fuel reformers3
2. Electrolysis cells are devices that convert hydrogen-rich fuels into hydrogen gas and carbon compounds – mainly carbon dioxide gas. Fuel reformers also filter out impurities, which reduce the fuel cell’s efficiency and life expectancy. Steam reformers use heat, pressure and a catalyst.
7. Fuels and oxidants are used in fuel cells to generate electricity as direct current (DC) via a particular type of electrochemical process called an ‘oxidation-reduction’ reaction. are devices that convert water into hydrogen gas and oxygen gas using a process called electrolysis. Electrolysis is the reverse of the process that fuel cells use. There is a new type of electrolysis technology in development that uses about one tenth of the energy used by conventional electrolysis. The new technology uses naturally-occurring bacteria in an electrolysis cell to convert almost any biodegradable, organic materials into hydrogen, pure water and heat.
8. A fuel cell is comprised of two thin, porous electrodes separated by an electrolyte. The electrodes, which incorporate a catalyst, are also connected by an external electric circuit. In a typical fuel cell, hydrogen fuel or hydrogen-rich fuel and oxygen oxidant are combined to generate electricity, heat and pure water vapour. A single fuel cell produces too little electrical power to be of much use, so up to hundreds of fuel cells are linked together in series to form a fuel cell stack.
9. In a typical fuel cell, hydrogen fuel or hydrogen-rich fuel and oxygen oxidant are combined in the presence of a catalyst to generate electricity, heat and pure water vapour via a particular type of electrochemical process called an oxidation-reduction reaction. An oxidation-reduction reaction involves an oxidation half-reaction at the anode and reaction half-reaction at the cathode, and the specific half-reactions vary between the types of fuel cells.
10. Six main types of fuel cells have been developed, with the primary difference between them being the type of electrolyte used. The main differences are that in PEMFCs, DAFCs and PAFCs, positive hydrogen ions flow through the electrolyte, whereas in the AFCs, MCFCs and SOFCs, negative oxygen ions or oxygen-containing ions flow through the electrolyte.
11. Fuel cells are used in a wide variety of applications from powering buildings to cars, buses and space travel. For more information on applications, see the Australian Academy of Science website: http://www.science.org.au/nova/023/023key.htm.
Brief Background Information
Fuel Cell Systems Fuel cells are devices that convert gases into electricity without combustion. They generally comprise of three main components.
1. Input gases: a fuel and an oxidant
2. A fuel processor
3. A fuel cell stack
Input gases Hydrogen Most fuel cells use Hydrogen (annotated as ‘H’ in chemistry) as a fuel. A Hydrogen atom consists of one proton, one electron and one neutron. The stable hydrogen molecule at room temperature and atmospheric pressure is hydrogen gas, which consists of two hydrogen atoms as shown in Figure 8.1. Hydrogen makes up 90 percent of the universe and is the third most abundant element on the Earth's surface. However, it is usually bound with other atoms in a molecule so fuel processing is usually required.
Alcohol One type of fuel cell, direct alcohol fuel cells, uses alcohols such as methanol or ethanol as a fuel. Storing a liquid, such as an alcohol, is easier than storing a gas, such as hydrogen. Oxygen Most fuel cells use oxygen (O) as an oxidant. An oxygen atom consists of eight protons, eight electrons and eight neutrons. The stable oxygen molecule at room temperature and atmospheric pressure is oxygen gas, which consists of two oxygen atoms, as shown in Figure 8.2. Oxygen makes up 21 percent of the volume of air and 89 percent of the mass of water. Oxygen used in fuel cells is usually taken from the surrounding air.
Fuel Processors
Fuel processors are devices that are used to create hydrogen gas, which is usually bound with other atoms in a molecule. The two main fuel processing technologies for fuel cell systems are ‘fuel reformers’ and, less commonly, ‘electrolysis cells’.
Fuel Reformers
Fuel reformers5 are devices that convert hydrogen-rich fuels into hydrogen gas and carbon compounds – mainly carbon dioxide gas. Currently, the most commonly reformed fuel for fuel cells is called natural gas, which is mostly methane.6
5 See FuelCellWorks - Just the Basics on How Fuel Cells Work at Other hydrogen-rich fuels that are reformed include methanol, propane,
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butane, gasoline, diesel, solid carbon and gasified coal.7
In fuel reformers, of which there are several types, the chemical potential energy in the output hydrogen gas is about 65 percent of chemical potential energy in the input fuels. Fuel reformers also filter out impurities. Impurities can bind with a fuel cell’s catalyst, a process called poisoning, which reduces the fuel cell’s efficiency and life expectancy.
1. Natural gas (mostly methane (CH4)) reformers. This lesson discusses steam reformers, of which there are two main types:
2. Methanol (CH3OH) reformers.Fuel cells that operate at high temperature, such as molten carbonate fuel cells and solid oxide fuel cells, usually reform fuels internally and so do not require an external fuel reformer. Also, direct alcohol fuel cells use alcohols such as methanol or ethanol as a fuel and so do not require the fuel to be reformed either. Electrolysis Cells California Energy Commission (2003) Distributed Energy Resource Guide: Fuel Cells, State of California Government, USA. Available at are devices that convert water into hydrogen gas and oxygen gas using a process called electrolysis. Electrolysis is the reverse of the process that fuel cells use. InPrepared by The Natural Edge Project 2008 Page 8 of 14
conventional electrolysis cells, the chemical potential energy in the resulting hydrogen gas is 50-70 percent of the electrical energy applied. Of course, there is no extra energy value in using conventionally-generated electricity to create hydrogen and then reversing the process to use that hydrogen to generate the same quantity of electricity! However, there is an application for this arrangement in regenerative fuel cells. Regenerative fuel cells are valuable when electricity is required for 24 hours per day but only available for part of the day. For example, in remote areas where only solar-generated electricity is available, electrolysis can be used to create hydrogen gas and oxygen gas during the day and a fuel cell can be used to generate electricity at night. There is a new type of electrolysis technology in development that uses about one tenth of the energy used by conventional electrolysis. The new technology uses naturally-occurring bacteria in an electrolysis cell to convert almost any biodegradable, organic materials into hydrogen, pure water and heat in the following process:
- The bacteria consume the organic material and release protons and electrons, creating up to 0.3 volts. (The bacteria do the work of a large portion of the electricity used in a conventional electrolysis cell.)
- More than 0.2 volts are applied externally, which provides enough energy for the protons and electrons to combine and form hydrogen gas molecules.
In an electrolysis cell that uses acetic acid (found in vinegar and from glucose and cellulose fermentation) as the organic material, the chemical potential energy in the output hydrogen gas is 288 percent of the input electrical energy. When considering the total input energy – both the energy in the electricity and the chemical potential energy in the acetic acid – the hydrogen gas contains 82 percent of the total input energy. In other electrolysis cells that use lactic acid, cellulose or glucose as the organic material, the output hydrogen contains 62-82 percent of the total input energy.Fuel Cell Stack
Fuels and oxidants are used in fuel cells to generate electricity as direct current (DC) via an electrochemical process, similar to that in a battery. The main difference is that in a fuel cell, the fuel and oxidant supply is external and replenished. In a battery, the fuel and oxidant supply is stored and limited.
A fuel cell is comprised of two thin, porous electrodes separated by an electrolyte. The electrodes, which incorporate a catalyst, are also connected by an external electric circuit (see Figure 8.3):11Prepared by The Natural Edge Project 2008 Page 9 of 14
- Anode (negative electrode): has channels that distribute the fuel over the catalyst evenly and conducts the electrons from the catalyst to the external electric circuit.
- Cathode (positive electrode): has channels that distribute the oxidant over the catalyst evenly and conducts the electrons from the external circuit to the catalyst.
- Electrolyte: is a solid or solution that has a voltage across it and that facilitates in the flow of positive or negative ions from one electrode to the other while blocking electrons.
- Catalyst: is usually platinum or a nickel-platinum alloy
- External electric circuit: includes a current conditioner or load and carries electrons from the anode to the cathode.Fuel cells convert 20-60 percent of the input chemical potential energy into output electrical energy. A single fuel cell produces 0.5-0.9 volts under load, which is too low to be of much use.
Research Institute for Sustainable Energy (2006) Fuel Cells, Murdoch University. Available at Up to hundreds of fuel cells are linked together in series to form a fuel cell stack, which can generate a useful amount of voltage and power. A fuel cell stack’s power output can range from 1 kilowatt to 11 megawatts. In a typical fuel cell, hydrogen fuel or hydrogen-rich fuel and oxygen oxidant are combined in the presence of a catalyst to generate electricity, heat and pure water vapour via a particular type of electrochemical process called an oxidation-reduction reaction. An oxidation-reduction reaction involves an oxidation half-reaction at the anode and reaction half-reaction at the cathode, and the specific half-reactions vary between the types of fuel cells. Six main types of fuel cells have been developed, with the primary difference between them being the type of electrolyte used :
1. Alkaline fuel cell (AFC)
2. Proton exchange membrane fuel cell or polymer electrolyte membrane fuel cell (PEMFC)
3. Direct alcohol fuel cell (DAFC),
4. Phosphoric acid fuel cell (PAFC) also known as direct methanol (DMFC) or direct ethanol (DEFC) fuel cell, depending on the fuel used
5. Molten carbonate fuel cell (MCFC)
6. Solid oxide fuel cell (SOFC)
The main differences are that in PEMFCs, DAFCs and PAFCs, positive hydrogen ions flow through the electrolyte, whereas in the AFCs, MCFCs and SOFCs, negative oxygen ions or oxygen-containing ions flow through the electrolyte and the half reactions and full reactions are given in Table 8.3. In some types of fuel cell, ions other than hydrogen ions or oxygen ions transfer across the electrolyte. For example, AFCs use hydroxyl ions (OH-) and MCFCs use carbonates (CO32-). For an animation of a PEMFC in operation, see Nice, K. and Strickland,

I.Introduction

In recent years, reliance on natural gas as a fuel for electric generation has steadily increased. This trend is expected to continue in the future, leading to greater interdependence between the natural gas and electric industries. In some areas of the country, questions have been raised regarding whether adequate market structures and appropriate regulations are in place to support this increasing reliance on natural gas-fired generation. To explore these issues, the Commission convened five regional conferences throughout the month of August 2012, in advance of the winter heating season, to solicit input from both industries regarding the coordination of natural gas and electricity markets. The conferences were structured around three sets of issues: scheduling and market structures/rules; communications, coordination, and information-sharing; and reliability concerns.
A cross-section of industry representatives participated and/or attended the regional conferences, with total attendance exceeding 1,200 registrants. Perspectives
varied by region and across industry sectors as to the issues confronting the industries and actions to be taken. Information gathered at the conferences confirmed that gas-electric interdependence concerns are more acute in some regions than others, with the discussion at each conference focusing on the particular circumstances and needs of each region. Notwithstanding the regional focus of the discussions, recurring themes across the conferences were that more attention needs to be paid to gas-electric interdependence issues and that some matters are appropriate for generic consideration while others are more appropriate for individual regions to address.
This report focuses on several topics that were common to multiple regions. First, conference participants in many regions sought confirmation that sharing information in furtherance of enhancing gas-electric coordination would not run afoul of the Commission’s Standards of Conduct or be construed as engaging in undue discrimination or preference.1 Second, a number of concerns were expressed regarding the misalignment of gas and electric scheduling practices, as well as application of the no-bump rule and pipeline capacity release rules. Third, questions were raised in several regions regarding whether generators have appropriate incentives to deliver firm energy. Finally, industry representatives in multiple regions are considering appropriate steps to take to address reliability considerations in the context of gas-electric coordination. Staff addresses these issues by providing guidance where possible and highlighting relevant activities taking place in individual regions.
As the discussion below indicates, significant industry attention and resources are being dedicated to address these and a host of gas-electric coordination issues. Several regions have implemented or are developing practices to improve coordination and communication between the industries during normal operations as well as in emergency situations. Some regions are considering changes to electric market rules to address increased reliance on gas-fired generation, while pipelines have developed flexible products and scheduling protocols for their customers. These efforts have helped participants in each industry identify improvements that can be made to support effective operations within both industries.
By focusing on the subset of cross-cutting issues identified above, staff seeks to support the progress being made on gas-electric coordination matters. Staff understands that there are a number of other issues unique to each region that must be addressed to
improve coordination across the gas and electric industries. Moreover, staff appreciates that gas-fired generators are only one of many users of the interstate natural gas pipeline system and that any changes to practices or rules within a particular region or the natural gas industry more broadly must be informed by the needs of a broad range of customers. With these considerations in mind, staff will be actively monitoring and engaging industry regarding progress being made in each region to ensure that gas-electric coordination issues are identified and addressed.

II.Background

On February 15, 2012, the Commission issued a notice in Docket No. AD12-12-000 requesting comments on various aspects of gas-electric interdependence and coordination in response to questions posed by Commissioner Philip Moeller and Commissioner Cheryl LaFleur.2 Recognizing the electric industry’s increased reliance on natural gas to generate electricity now and into the future, Commissioners Moeller anLaFleur pointed out the critical importance of the interface between the electric and natural gas industries. In order to better understand that interface and identify areas for improvement, Commissioners Moeller and LaFleur sought comments on a variety of topics including market structure and rules, scheduling, communications, infrastructure and reliability.
The Commission received comments from seventy-nine entities. The commenters raised a wide variety of issues regarding gas-electric interdependence. Many of the commenters asserted that the issues differed on a regional basis and requested that the Commission convene regional technical conferences.
On July 5, 2012, the Commission responded and issued a notice of a series of regional technical conferences to explore coordination between the natural gas and electric industries.3 During the month of August 2012, Commission staff held five
regional technical conferences for the Central, Northeast, Southeast, West and Mid-Atlantic regions. Each conference had a staff-led roundtable discussion of the following topics: scheduling and market structures/rules; communications, coordination, and information sharing; and reliability concerns.

III. Summary of Regional Conferences and Ongoing Initiatives to Address Gas-Electric Coordination

Before turning to the discussion of concerns common across multiple regions, staff provides a summary of general observations at each conference (not in chronological order) and information gleaned from publicly available sources. Each regional summary includes identification of initiatives to address gas-electric coordination issues that are either underway or in the planning stages in each region.

A.Northeast Region

A.Northeast Region

Several participants in the Northeast Region conference stated their views that the region is in need of additional pipeline infrastructure. It was noted that New England historically has had strong fuel diversity and dual-fuel capability,5 and that this region will depend on dispatching generators with alternate fuel sources out of economic order to protect reliability in the face of possible natural gas delivery concerns.

Several pipeline participants reported that their systems within the Northeast are consistently running near their design capacities. According to statements made at the conference, some of the major existing pipelines serving the New England region are
nearly fully subscribed or constrained at specific points on their respective systems. The lack of available capacity may limit regional pipeline flexibility, and frequently results in flow restrictions and strict balance requirements. Both gas and electric industry participants stated that relatively little gas-fired generation in New England is backed by primary firm pipeline transportation contracts. Instead, participants stated that generators typically rely on released secondary firm or, to a much lesser extent, on interruptible transportation (IT) pipeline capacity. Some participants also discussed the roles of marketers in procuring both pipeline transportation service and gas supplies.
Conference participants reported that under the current market structure, generators have few incentives to obtain long-term primary firm pipeline service, invest in alternate fuel capabilities, or take other steps to ensure fuel availability. A representative of ISO-NE reported that several proposed revisions to its forward wholesale electric capacity market are being developed. ISO-NE’s representative and other conference participants also discussed a proposal to allow hourly re-offers in the real-time energy market, and revisions to ISO-NE’s price mitigation rules to allow bids to be adjusted to reflect actual fuel costs.6
Several conference participants indicated that options are limited for addressing the natural gas pipeline infrastructure issue in the near term. A representative of ISO-NE discussed its intentions to review generators’ plans for the winter and determine whether individual generating units would be able to continue operating during a cold snap similar to that of January 2004. Pipelines stated their focus for the upcoming winter would be to maximize utilization of existing pipeline capacity to ensure reliability.
In the intermediate term, an ISO-NE representative noted ISO-NE’s plans to propose adjustments to the electric market day-ahead scheduling and resource adequacy assessment process. Under its proposal, day-ahead awards may be released as early as 30 hours prior to the start of the electric day, and well in advance of the North American Energy Standards Board (NAESB) timely nomination deadline for gas pipeline capacity. ISO-NE stated its belief that the current timeline leaves it with too little time to mitigate generation supply risks before the start of the operating day. Some conference participants voiced support for such a change, while others stated that it would reduce, but not eliminate, the risk exposure of the generators.
Some electric utility and gas local distribution company (LDC) participants suggested that further, coordinated studies of regional gas and electric infrastructure are needed. A few electric industry participants offered the idea of a regional gas infrastructure planning effort, similar to how the region already performs regional electric infrastructure planning. Gas industry participants did not express support for this idea.
Commentary of participants suggested that they are generally comfortable with the quality of communications between the pipelines, generators, and ISO-NE. Some observed that the communications currently occur on a largely ad hoc basis, and suggested that efforts to further formalize the communications procedures could be beneficial.
Northeast Regional Initiatives
Many technical conference participants supported the idea of forming a steering committee to address concerns about gas-electric coordination in the Northeast. The steering group would consider changes to the electric day, maximizing assets in the region through maintenance planning, and changes to ISO-NE’s market rules, scenario planning, and funding mechanisms.
Participants at the conference discussed the need for improved coordination of maintenance outages among electric and natural gas industry participants. Representatives of pipelines and LDCs offered that the Northeast Gas Association is willing to lead the efforts to develop communication protocols governing gas and electric maintenance-related outage coordination.
As noted above, and according to the ISO-NE participants at the conference, ISO-NE is considering several potential modifications to its tariff, some to take place sooner than others. In the near-term, ISO-NE is considering a plan to conduct a supplemental procurement for natural gas, liquefied natural gas, or back up oil supplies to ensure adequate supplies over 2013 and 2014. Longer-term, ISO-NE plans to develop certain tariff revisions to move up the timeline for day-ahead unit commitment and the resource adequacy assessment process in an effort to provide additional time to ensure that gas-fired generators may procure gas supplies and delivery services so that adequate generation capacity is available in real time.7 Further, ISO-NE is considering several
changes to the market rules to allow energy and capacity prices to better reflect the risk of generator interruptible vs. firm gas procurement, including changes to the capacity product definition, changes to the resource adequacy assessment process, and a review of the consequences of generator non-delivery. ISO-NE is also considering a proposal to modify the real-time energy market and bid mitigation rules to allow generators to update bids to reflect changes in natural gas prices.

B.Mid-Atlantic Region

According to some participants representing generators in the Mid-Atlantic region, power markets provide no incentive to purchase firm contracts for pipeline transportation. Various other participants in the Mid-Atlantic Region conference pointed out that there are multiple ways a gas-fired generator can firm its fuel supplies—through firm contracts for pipeline transportation, dual fuel, storage contracts, and access to more than one pipeline. A North American Electric Reliability Corporation (NERC) representative noted the appeal of a requirement for generator “firmness” that would account for the multiple ways to firm-up fuel supply, and identified a potential firmness requirement as an item more suited for an RTO/ISO proposal rather than a NERC standard.
The prevalence of dual fuel capability in both the NYISO and PJM regions was noted. Participants stated that both the PJM and NYISO markets provide some incentive or requirement for dual fuel. A representative of PJM said that its Reliability Pricing Model (RPM) uses a dual fuel reference unit to determine the Cost of New Entry for the wholesale electric capacity market demand curve, which helps set the price of capacity. In NYISO, according to conference participants, generators in downstate New York (New York City and Long Island) are required to have alternate fuel capability under state reliability requirements. Participants generally indicated that gas markets in PJM are more liquid than those in NYISO given the availability of various pipelines and storage.
While many representatives of generators indicated that they currently are able to secure pipeline capacity, several pipelines noted that liquidity and flexibility experienced thus far in the Mid-Atlantic region are not necessarily indicative of the flexibility that will be available in the future as gas-fired generation grows. Representatives of an LDC and a pipeline also argued that cost causality needs to be matched with cost responsibility. An LDC representative asserted that today certain costs of serving generators’ variability and hourly flows are being paid by LDCs.
The issue of the use of secondary firm contracts and recallable capacity release contracts (rather than primary firm contracts) as a means of serving gas-fired generation was discussed. Several contend the practice of relying on types of transportation services other than primary firm transportation to fuel gas-fired generation is not a reliable solution given the higher rate of curtailment of secondary firm customers. Some pipeline participants also noted that while producers have funded some new pipeline capacity, these pipelines only extend far enough to get the natural gas from the producing region to a liquid pooling point, and there is still a need to build infrastructure to get natural gas from the supply area to generators. Some LDC representatives noted that for generators behind their citygates, even if the generator has firm gas contracts on an interstate pipeline, it still needs firm natural gas delivery capacity on the LDC’s system.
Several participants also raised concerns about planning—whether the planning horizon is long enough and whether market participants are planning appropriately. Noting the differences between electric and gas planning horizons, a pipeline noted that pipelines do not plan for growth; rather they build to accommodate firm customers. An industrial participant argued that market signals are not a substitute for planning and contended that the region may need a longer-term planning horizon. A generator noted that while a long-term electric planning process exists, what is missing is consideration of fuel security.
There was no consensus among Mid-Atlantic conference participants as to the best way to address the gas-electric scheduling mismatch. A representative of NYISO stated that it currently releases its day-ahead dispatch results earlier (10 a.m. EST) than PJM does (4 p.m. EST). NYISO’s representative noted that the earlier release allows gas-fired generators to be better informed for the first timely pipeline nomination cycle which occurs at 11 a.m. (CST). Feedback from participants representing generators on whether they preferred the earlier release or later release was mixed. NYISO’s representative also reported that it is considering moving the day-ahead dispatch results release to earlier than 10 a.m. (EST) (when gas markets are more liquid) or later (to facilitate better gas supply and transportation price certainty when bidding), and will continue to explore scheduling through its stakeholder process. Conference participants noted that in PJM, where the natural gas market is relatively liquid and there are many pipelines and storage reservoirs, generators thus far have been able to acquire natural gas supplies and pipeline capacity in later pipeline nomination cycles. Conference participants noted that in
NYISO where the gas market is less liquid it is not always easy to acquire gas after the first timely pipeline nomination cycle.
With regard to the process for allowing generators to modify bids to reflect actual fuel costs, NYISO permits it if a generator had to switch fuels or procure more expensive intra-day gas if the ISO increased its dispatch level. According to the PJM representative, PJM does not currently permit this, but PJM would be open to considering it.
Some participants representing generators encouraged the creation of more nomination cycles. Pipeline representatives noted that some pipelines in the region already offer hourly nomination cycles and stated that more frequent nominations will not help if there is inadequate pipeline capacity.
Regarding communications, a representative of NYISO noted that it does not necessarily understand how pipeline outages impact the electric system and which generators will be affected. Representatives of PJM and a pipeline mentioned a partnership which would include exchanging control room operators. They expect that spending time in each others’ control rooms will help to bridge the language gap and learn about each other’s industry. Various conference participants also noted their interest in tabletop exercises that simulate reliability scenarios. A representative of NYISO noted that several combined gas-electric utilities, along with certain pipelines within its area, recently ran a useful tabletop exercise.
Conference participants indicated that there is no formal outage coordination process across industries, but some expressed support for a formalized process. Some conference participants noted there is a tension between wanting to openly discuss publicly available information on outages and the impact on operations, and concern about whether unit-specific discussion would violate regulations against undue preference or discrimination. Pipeline representatives noted reluctance to discuss granular impacts at the level of individual shippers beyond the information the pipelines make publicly available on electronic bulletin boards. One participant noted that enhanced outage coordination gives rise to heightened concern over manipulation. Various participants indicated concern about specifying shipper-level information in discussions.
Participants from both the natural gas and electric industries suggested clarification of the Standards of Conduct and Natural Gas Act Section 4b undue preference and anti-manipulation rules would be helpful.10 One participant suggested
“common sense leeway” to the Standards of Conduct rules in emergencies. A pipeline trade association representative noted that some RTOs/ISOs have adopted the Standards of Conduct in their tariffs and RTOs/ISOs are concerned about sharing information with pipelines. PJM’s representative asked whether it can tell pipelines which generator units will be dispatched.
Participants articulated different views on the markets’ ability to send appropriate signals. One pipeline representative argued that electric market signals do not factor in reliability and another participant argued that generators in unregulated markets have no incentive to contract for firm pipeline transportation. A PJM representative noted that its wholesale electric capacity market does not pay generators if they do not run and capacity factors11 decline if generators do not run. A generator representative stated that PJM’s capacity market sends the right signals, while a pipeline representative argued that PJM’s nonperformance penalties are weak and do not justify paying for fuel security. A NERC representative noted that many capacity market incentives, such as Equivalent Forced Outage Rate—demand (EFORd)12 penalties, are problematic because they are retrospective and the impact arrives three years later.
In general, participants in this technical conference urged the Commission to “be patient” and check back with the regions to see that they continue to make progress on most issues involving gas-electric coordination, although there was interest in having the communications issues clarified.
Mid-Atlantic Regional Initiatives
A representative of NYISO noted that NYISO, PJM, ISO-NE, the Ontario Independent Electricity System Operator (IESO), and possibly also Midwest Independent System Operator (MISO) are planning a comprehensive study across pipelines serving these regions that would incorporate retirements and infrastructure changes over five to ten years. The study will examine planned generation retirements, new transmission lines, and new pipelines for the next five to 10 years and try to identify any electric reliability problems. The study is expected to be available sometime in 2013.
On communications between the RTOs/ISOs and the pipelines in coordinating outages, representatives of PJM and NYISO discussed educational processes and
operator training and exchange programs, and the development of protocols for the sharing of maintenance schedules.13 As mentioned above, several combined utilities went through a tabletop reliability scenario exercise with several pipelines, where they examined different scenarios based upon loss of supply.

C.Central Region

Many participants in the Central Region conference stated that gas-electric coordination in the region is not currently a problem. However, a representative of MISO suggested that this could change in 2013-2015 when it expects approximately 30,000 MW of coal-fired generation to either be retired or taken off line for retrofits to meet emissions standards over the 2012-2015 period. MISO’s representative anticipates this will result in a greater reliance upon gas-fired generators, and said that it is particularly concerned about the unavailability of coal units during the December – April period, when natural gas demand is highest.
Participants came down on all sides of the gas-electric scheduling question. Some suggested that both markets would benefit if the market schedules were more aligned: if the electric market cleared earlier in the day and the timely (first) gas nomination cycle occurred later in the day, market participants would be able to make gas supply arrangements at a time when the natural gas market is more liquid, based upon knowing earlier which generation plants were going to run. Others asserted that the earlier day-ahead electric commitments are made, the less accurate the load and price forecasts become. Some firm gas pipeline shippers expressed concern about the impact of increased gas-fired generation upon the quality of their firm pipeline services. Suggestions to improve gas pipeline flexibility include revisiting the “no-bump” rule and making intra-day capacity release more flexible. A few shippers noted what they
described as the high quality and flexibility of their pipeline transportation services. One pipeline representative expressed a willingness to continue to create flexible services for customers, including offering short-term capacity and volumetric rates.
Participants generally reported that there is little direct communication between the pipelines and electric system operators in this region. Many participants asserted that responsibility for information-sharing lies with the generator, and that generators should be responsible for communicating and sharing outage, capacity, and expected gas burn information with both the pipelines and the RTOs/ISOs. Several participants suggested that information sharing could be improved by having RTOs/ISOs provide the gas pipelines with hourly generator commitments, so that pipelines would know in advance which gas-fired generators are likely to run. Many expressed concern, however, about the market sensitivity and the potential for violations of the Commission’s regulations prohibiting undue discrimination or preference associated with sharing such information. They suggested that adequate protections would need to be in place to ensure such information was confined only to operating personnel and not shared with marketing departments.
Another example identified at this conference was gas-electric communications during emergencies and peak demand situations. While generators often provide the pipelines with a day-ahead hourly burn profiles as required by NAESB gas-electric business standards,15 pipelines suggested more real-time information would also be useful, especially during electric contingencies that could affect gas facilities such as electric compression, production or storage. Again, concerns were raised about violating the Commission’s regulations against anti-competitive conduct.
Addressing reliability concerns, it was suggested that entities responsible for resource adequacy should evaluate fuel availability in their loss of load probability (LOLP) studies for both winter and summer planning. MISO’s representative suggested that this could be accomplished by including unavailability due to lack of fuel in the generators’ forced outage rate. However, there was concern expressed that the forced outage rates are historical and do not reflect the expected unavailability due to increases in capacity factors of gas-fired generation.
Central Regional Initiatives
A representative of MISO noted that it is continuing to refine and update an October 2011 study,16 which looked at whether current generation capacity is sufficient given planned coal plant retirements and planned retrofit outages expected in the 2013-2015 period. MISO’s representative committed to working with the pipelines that serve the generators in its control area and obtaining a more definitive planned outage/maintenance schedule from coal-fired generation as they move into the 2013-2015 time period. In addition, he noted that MISO recently formed a task force to work on general gas-electric coordination issues.17
A representative of ERCOT suggested it could act as a host for tabletop exercises for RTOs/ISOs and pipelines to review emergency procedures and discuss communication issues and risks on the bulk power and natural gas systems.