Grid 2020 examines the future on gas-electricity interoperability

This is an updated version of a story that originally ran in Inside Lines on June 17, 2015.

Flexibility and the need for greater coordination across the different sectors of the utility industry were some of the themes that emerged at the Grid 20/20: Focus on Gas/Electric Interoperability forum June 17 at PJM’s Audubon, Pa. campus.

Panelists from across the spectrum of the gas and electric businesses presented their viewpoints on three diverse panels and all agreed that the utility industry needs gas-electric interoperability.

Aligning the natural gas infrastructure with the electric transmission infrastructure may be a complex challenge to solve, but it is solvable. Both keynote speaker Gordon van Welie, president and CEO, ISO New England, and guest speaker Phillip Moeller, Federal Energy Regulatory Commissioner, touched on that during the afternoon.

“Creative ideas are welcome,” Moeller told the audience. “We need desperately to keep the momentum going on these issues. Everything changes if we have a big problem and we will all be blamed,” Moeller warned. “If this were easy, somebody else would have done it.”

Left to right, Michael Borgatti, director of RTO Services, Gabel Associates; N. Jonathan Peress, Air Policy director, Natural Gas, Environmental Defense Fund; Mike Kormos – V-vice president -Operations, PJM; Asim Haque – Vice Chairman, Public Utilities Commission of Ohio and (at podium) Philip D. Moeller, commissioner, Federal Energy Regulatory Commission

Left to right, Michael Borgatti, director of RTO Services, Gabel Associates; N. Jonathan Peress, Air Policy director, Natural Gas, Environmental Defense Fund; Mike Kormos – V-vice president -Operations, PJM; Asim Haque – Vice Chairman, Public Utilities Commission of Ohio and (at podium) Philip D. Moeller, commissioner, Federal Energy Regulatory Commission

In his keynote address, van Welie discussed how gas infrastructure in New England has not grown with the demand and how more pipelines are needed. Gas pipeline developers want long-term commitments from generators to justify investment.

Availability of gas supply during recent extreme winters in New England and PJM led to generator outages and sparked what eventually evolved into the Winter Reliability Program in ISONE and recently, Capacity Performance in PJM.

“It showed the importance of capacity markets,” he said. “We’ve got to be able to keep lights on when it’s cloudy and when the wind is not blowing. The alternative is natural gas. Are we getting the best from the pipes and the wires to alleviate the situation?  Pay-for-performance aligns [the generators’] interest with ours from a reliability point of view.

“We were facing some of the same concerns facing PJM – the timing of the gas/electric market, capacity markets. Pay for performance provided strong incentives, incentive to invest in operations performance.”

In a panel on electric industry changes and challenges, van Welie pointed out how alignment of the markets also affects consumers.

“We have a responsibility at minimum to resolve it for reliability. We have a responsibility there. It’s something that’s not been fully addressed from a societal point of view,” he said. “How will it be addressed? I know we’ll figure something out, but it’s not clear what the solution is.”

In his closing remarks, Terry Boston, PJM president and CEO, said that he believes that energy independence for North America is “attainable,” but he brought home the theme of the day – it won’t be easy.

“We need some communication, some coordination and some collaboration” as far as flexibility. “It’s imperative that we learn from each other. We have that capability.”