EPA Criticizes State Department Keystone XL Draft EIS

June 2013, Vol. 68, No. 6

Bottlenecks in New England mostly during peak periods have been something of a cause célèbre at the commission in the past year, as it has held a number of technical conferences aimed at generating ideas on how natural gas pipelines and electric utilities -- and the ISOs which serve utilities -- can better communicate and schedule with one another in times of high natural gas demand. New England is the prime troubled spot, with the Midwest also experiencing gas supply shortfalls.

The latest FERC conference was held on April 25. In her opening statement, Commissioner Cheryl LaFleur referred to theoOrder the commissioners had approved the day before allowing the New England Power Pool (NEPOOL) new flexibility with regard to the timing of natural gas purchases. On Feb. 7, ISO New England Inc. (ISO-NE) and NEPOOL jointly submitted two alternative sets of proposed revisions to the day-ahead market activities in ISO-NE’s Transmission, Markets and Services Tariff. ISO-NE is the regional transmission organization (RTO) and essentially the electricity market regulator. The NEPOOL is composed of electric generators and wholesale electric markets operating in the market.

But the FERC Order left Richard Kruse, vice president for regulatory affairs at Spectra Energy, at a loss. Spectra owns the Algonquin Gas Transmission LLC and Maritimes & Northeast Pipeline, L.L.C. which bring gas to New England. Spectra's capacity to New England is fully booked, which is a problem for New England utilities switching to natural gas, who are desperate for the cheap Marcellus Shale gas Algonquin and Maritimes bring to New England. Kruse says, "Neither proposal really did anything from a gas pipeline standpoint. It was a huge fight over a one-our difference. I don't understand what they were fighting about. From a gas/electric scheduling standpoint, the oder did not help them at all, either ISO-NE or NEPOOL."

In fact, Algonquin has been marketing its Algonquin Incremental Market (AIM) expansion project for years, and is in the process of signing precedent agreements. "But the New England electric markets are not stepping up for our capacity," he states. "In our view, electric generators are not getting a price signal out of ISO-NE to make it worthwhile for them to sign up for firm capacity."