The Public Need for Gas/Electric Coordination

Transcription

1 Pennsylvania Independent Oil & Gas Association May 14, 2014 The Public Need for Gas/Electric Coordination Richard Kruse, VP Regulatory Spectra Energy

2 Our Strong Portfolio of Assets Natural Gas Transmission Pipe: 19,000 mi Natural Gas Storage Capacity: 300+ Bcf Natural Gas Gathering Pipe: 69,000 mi Crude Transmission Pipe: 1,700 mi NGL Transmission Pipe: 1,500 mi SE Gas Processing Capacity: 3.7 Bcf/d 2013 DCP Gathered and Processed: 6.4 Tbtu/d 2013 DCP NGLs Produced: 425 MBbl/d Distribution Pipe: 39,000 mi Union Gas Retail Customers: 1.4 million Gas storage facility Gas processing plant Propane terminal NGL storage Shale gas formations Crude storage Major oil pipeline terminal Spectra Energy Corp 2

3 Texas Eastern Supplies Pre-Marcellus Flows 2007 ~50% ~50% Northeast Markets In 2007, gas flowing into the Northeast came from two sources: About half of this supply came up from the Gulf of Mexico The other supply came from Mid- Continent shales and from interconnecting pipelines delivering gas into our system in Ohio Spectra Energy Corp 3

4 Texas Eastern Appalachian Shale Supply Interconnect Program 54 Requests In-Service & Under Agreement (requested tap & posted M&R capacity) Current Appalachian Shale Supply 14.2 Bcf/d Bcf/d 33 In-Service (posted M&R capacity) 6.6 Bcf/d 21 In Progress & Under Agreement (Scheduled 2013 In-Service) 7.6 Bcf/d Texas Eastern Appalachian Shale Supply Growth 2,000,000 1,750,000 1,500,000 1,250,000 1,000, , , ,000 - Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Spectra Energy Corp 4

5 Texas Eastern Supplies Expected Flows 2017 Ontario Northeast Midwest Gulf Coast Marcellus By 2017, we expect to flow as much volume southbound as we used to flow northbound We anticipate Marcellus continuing to supply the Northeast and the Gulf Coast and Midwest Spectra Energy Corp 5

6 Sign Posts on the Road to Gas Electric Coordination New England Cold Snap Southwest Cold Weather Event Increased Use of Natural Gas for Electric Generation NERC (2013) 17% to 25% over last decade ISO-NE 51% in 2011 Brayton Point Power Station cheered for announcing it will shut down 2017 (1,492MW) EIPC Study of Gas-Electric System Interface Multiple Polar Vortex Storms (It was cold this winter!) Energy Future, Failing to See Shale-Gas Boom, to Break-up (Wall Street Journal April 30, 2014) Brayton Point Power Station critized for planned shut down Spectra Energy Corp 6

7 Interrelated Gas/Electric Issues Gas/Electric issues can be sorted into 3 sets of interrelated issues Communication Scheduling and Coordination Infrastructure and Services Spectra Energy Corp 7

8 Communication The general perception is that reliability will be enhanced if electric operators and gas operators communicate on status of their respective operations How much communication is too much? When must communication be public and what can be private are key regulatory questions FERC provided needed guidance in Order No. 787 regarding electric rules and gas rules which were in place for the winter. restrict communications Spectra Energy Corp 8

9 Scheduling & Coordination Standardized Gas Day is standardized for North America Gas Scheduling is standardized for North America Some pipelines provide Hourly Scheduling including Spectra Energy pipelines Not Standardized Electric Day varies by ISO Electric Scheduling varies by ISO Prior efforts to standardize Gas/Electric Day were unsuccessful NAESB efforts to identify solutions Natural Gas Council Proposal FERC NOPR RM14-2 Spectra Energy Corp 9

10 Timeline Proposal Comparison Current Timeline (NAESB) Proposed Timeline (NGC) Proposed Timeline (RM14-2) Start of Gas Day 9am 9am 4am Timely Cycle Nomination Deadline 11:30 AM 1:00 PM 1:00 PM Confirmation Deadline 3:30 PM 4:30 PM 4:00 PM Scheduling Deadline 4:30 PM 5:00 PM 4:30 PM Gas Flow Time 9:00 AM 9:00 AM 4:00 AM Hours of Gas Flow Evening Cycle Nomination Deadline 6:00 PM 6:30 PM 6:00 PM Confirmation Deadline 9:00 PM 9:00 PM 9:00 PM Scheduling Deadline 10:00 PM 9:30 PM 10:00 PM Gas Flow Time 9:00 AM 9:00 AM 4:00 AM Hours of Gas Flow Intraday 1 Cycle Nomination Deadline 10:00 AM 9:00 AM 8:00 AM Confirmations Deadline 1:00 PM 11:30 AM 10:30 AM Scheduling Deadline 2:00 PM 12:00 PM 11:00 AM Gas Flow Time 5:00 PM 3:00 PM 12:00 PM Hours of Gas Flow Bump Bump Bump FERC has asked NAESB, Is there a better way? Intraday 2 Cycle Nomination Deadline 5:00 PM 2:00 PM 10:30 AM Confirmation Deadline 8:00 PM 4:00 PM 1:30 PM Scheduling Deadline 9:00 PM 4:30 PM 2:00 PM Gas Flow Time 9:00 PM 9:00 PM 4:00 PM Hours of Gas Flow No Bump Bump Bump Intraday 3 Cycle Nomination Deadline - 9:00 PM 4:00 PM Confirmation Deadline - 11:00 PM 5:30 PM Scheduling Deadline - 11:30 PM 6:00 PM Gas Flow Time - 12:00 AM 7:00 PM Hours of Gas Flow Bump Bump Intraday 4 Cycle Nomination Deadline - - 7:00 PM Confirmation Deadline - - 8:30 PM Scheduling Deadline - - 9:00 PM Gas Flow Time - - 9:00 PM Hours of Gas Flow No Bump Spectra Energy Corp 10

11 Is this Just A Northeast Problem? NYISO PJM Arizona/New Mexico MISO? Spectra Energy Corp 11

12 Gas-Fired Power Generation Dynamics Texas Eastern (M2 and M3 Zones) 1000 Power Market Demand Growth (MDth/d) Average Daily Flows 0 C08 C09 C10 C11 C12 C13 Spectra Energy Corp 12

13 Texas Eastern Transmission, L.P. Gas-Fired Power Generation Dynamics Peak Demand vs. Firm Contracted Capacity (MDth/d) Summer Peak Winter Peak Contracted 26.8% Generators Winter 13/14 Firm Capacity vs Historical Winter Peak Flow Spectra Energy Corp 13

14 Gas-Fired Power Generation Dynamics Algonquin Gas Transmission 500 Power Market Demand Growth (MDth/d) Average Daily Flows 0 C08 C09 C10 C11 C12 C13 Spectra Energy Corp 14

15 Algonquin Gas Transmission Gas-Fired Power Generation Dynamics Peak Demand vs. Firm Contracted Capacity (MDth/d) Summer Peak Winter Peak Contracted 16.7% Generators Winter 13/14 Firm Capacity vs Historical Winter Peak Flow Spectra Energy Corp 15

16 What Is The Real Problem? Communication, Scheduling and Coordination concerns are merely symptoms of the real problem: Insufficient gas pipeline infrastructure to support growing gas demand The disconnect: Wholesale electric markets dispatch plants based on price with no incentives for reliability The dispatch model discourages generators from holding firm capacity contracts Pipelines, however, need long term contracts to support infrastructure investment to meet growing demand Spectra Energy Corp 16

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