APPrO has raised concerns and identified issues for further attention in response to new proposals for gas-electric co-ordination from the IESO. The IESO hosted a Consultation Webinar on May 7 outlining its proposals and related issues arising from recent FERC Order making certain modifications to the North American Energy Standards Board (NAESB) gas nomination windows. The FERC order was issued April 4, 2015 (Docket Number RM-14-2-000).
APPrO said the process proposed by the IESO could result in “substantial daily effort for limited gains,” and noted concerns that the information the IESO may receive “may not provide a complete picture of the GFG supply arrangements.” Gas fired generators (GFGs) may be asked to provide additional information to the IESO detailing their arrangements with natural gas pipelines and distribution companies (GASCOs). This information is intended to help avert supply problems foreseen by US energy regulators. However APPrO believes that the situation is different in Ontario, and that “the offers made by each GFG already reflect any potential pipeline constraints.”
APPrO stressed that “providing generator specific information may violate the obligations between the GASCO and the GFG. APPrO would want to better understand the specific information that the IESO is expecting the GASCO to provide, and what procedures the IESO intends to develop to determine which GFGs’ information is shared with which GASCO.”
In addition there is a risk that commercially sensitive projections could become available to counterparties to commercial contracts, affecting commercial behavior in an imbalanced fashion. “If the information provided by the IESO to the GASCO in the GGFR includes an outlook for the GFG demand in advance of the individual GFGs securing those market based services, it could result in unintended consequences of the GASCO having this demand forecast and being able to set its prices for these market based service in advance of the generators actually seeking this service. This would not provide a level playing field between the GFG and the GASCO and could result in the GFG having to pay higher prices for these services absent the GASCO having this information.”
APPrO recommends the following:
• Any program implemented be done on a pilot basis and explicitly re-evaluated after 12 months, including soliciting input from GFGs.
• Prior to drafting market rules and implementing this program the IESO further consult specifically with GFGs to discuss among other things:
• The issue of the GASCO releasing generator specific commercially sensitive information;
• The potential for the GASCO to use IESO forecasts to set the price of market based services in advance of individual negotiations that could take place between the GFG and the GASCO;
• APPrO suggests the GASCO internal Code of Conduct specifically prohibit market based services personnel from access to generator-specific information.
Another set of proposals under discussion with the IESO were less controversial. The FERC recently approved certain changes the NAESB nomination windows for the US natural gas industry. The changes include:
• The Timely nomination window will move from 11:30 Central Clock Time (CCT) to 1:00 PM CCT;
• Add an Intra-day 3 window that would allow an additional nomination for the current gas day at 7:00 PM CCT that would be effective at 10:00 PM CCT.
APPrO supported these changes but made a significant related observation: “the change by itself does not improve the current mismatch that exists between the IESO’s DACP timing at 2:00 PM CCT (3:00 Ontario time) and the new Timely nomination window at 1:00 PM CCT. The IESO should look to release the results of the DACP process in advance of the Timely nomination window to allow GFGs sufficient time to arrange their respective gas supplies and schedule gas in this Timely window using the results of the DACP.”
For more information, see the IESO page on Gas-Electric Coordination Enhancements, and APPrO’s comments of May 15 posted on it. See also the following related story in this issue of IPPSO FACTO: FERC approves final rule to improve gas-electric coordination.