Statement of Commissioner Cheryl A. LaFleur on Gas-Electric Coordination

April 16, 2015
Commissioner Cheryl A. LaFleur

Docket No. RM14-2-000
Item No. M-1

Statement of Commissioner Cheryl A. LaFleur on
Gas-Electric Coordination
“Today’s Final Rule, which revises our regulations related to scheduling of transportation service on interstate
pipelines, is the culmination of over three years of collaborative efforts among the Commission, its staff, the electric
and natural gas sectors, state regulators, and other interested stakeholders. I support this order because these
revisions to natural gas scheduling practices are an important step in promoting coordination between the natural gas
and electric markets.
“Over three years ago, the Commission identified a growing concern related to gas-electric interdependence, in light
of the nation’s increasing reliance on natural gas for electric generation. In response, the Commission started a
dialogue, including several regional and national technical conferences, regarding the potential need for better
coordination between the natural gas and electricity markets. Based on the record we assembled, the Commission
identified two cross-cutting issues that warranted national attention: communications between natural gas and electric
operators, and natural gas and electric scheduling and capacity release issues.
“In March 2014, the Commission issued a Notice of Proposed Rulemaking (NOPR) that proposed changes to nationwide
gas scheduling practices. While we put forward a proposal in the NOPR, the Commission provided the electricity and
natural gas industries six months to utilize the NAESB process to attempt to reach consensus on a proposal – whether
the Commission’s or an alternative. Today’s Final Rule revises our regulations to incorporate by reference modified
NAESB Wholesale Gas Quadrant Business Practice Standards developed through that process, to change the timing for
the day-ahead Timely Nomination Cycle and to add an intraday nomination cycle.
“This order illustrates how the Commission can engage with industry and stakeholders in a collaborative process to
offer real improvements in our natural gas and electricity markets. I believe that the Final Rule strikes the appropriate
balance by offering more flexibility to all shippers on interstate pipelines, changing the nationwide Timely Nomination
Cycle nomination deadline, and adding an additional intraday nomination cycle. Notably, while the Commission had
proposed to change the start time for the gas day in the NOPR issued last year, I was persuaded that there was simply
insufficient justification for making that change at this time.
In particular, I would like to thank FERC staff, NAESB industry volunteers, and NAESB staff, all of whom have worked
hard on these issues.
“Today’s order is not the end of the Commission’s work on these issues. The RTOs and ISOs are now required to file
tariff revisions to coordinate their markets with the changes adopted in this Final Rule, or show cause why such
changes to existing scheduling practices are not needed.
“In addition, beyond national issues such as scheduling, regional efforts should continue to address aspects of
gas/electric coordination, particularly fuel assurance in competitive electric markets that are heavily or increasingly
dependent on natural gas. In particular, ISO-NE and PJM have undertaken market reforms to promote fuel assurance in
their respective footprints, some of which are still pending before the Commission, and efforts are underway in New
England to assess and address regional needs for natural gas infrastructure. I will be closely following these efforts as
they go forward.”