Wisconsin Public Utility Institute Gas: What s in the Pipeline September 13, 2012

Transcription

1 Wisconsin Public Utility Institute Gas: What s in the Pipeline September 13, 2012

2 Kirk Lavengood Vice President Business Development Northern Natural Gas Company 1

3 Northern Natural Gas System Northern s system has two distinct rate areas Market Area with a peak-day capacity of over 5.5 Bcf Field Area with a peak-day capacity of over 2.3 Bcf Northern has a vast network of pipeline facilities 14,900 miles of pipeline 48 compressor stations Over 2,150 receipt and delivery points Northern has five storage facilities with 59 Bcf firm capacity and 1.1 Bcf/day of peak deliverability Three underground storage facilities Redfield, Iowa Cunningham, Kansas Lyons, Kansas Two liquefied natural gas facilities with 4.0 Bcf capacity Wrenshall, Minnesota Garner, Iowa NM Market Area KS SD NE TX OK Field Area MN IA Demarcation MO AR LA WI IL MI ABC D EF Field Zone 2

4 Electric Generation on Northern Northern serves electric generation facilities directly and through utility distribution systems Direct connected plants 38 with generating capacity of 11,870 MW Combined cycle plants 17 with capacity of 6,806 MW Peaking plants 21 with capacity of 5,064 MW Over the past two years, direct-connected plants comprised approximately 12% of Northern s throughput Winter peak generation load was 15% of Northern s system load Summer peak generation load was 40% of Northern s system load Over the last decade, Northern has expanded its system to serve 14 firm contracted electric generation plants with over 5,000 MW of generating capacity and has met the in-service date for each plant 3

5 Electric Generation Load 4

6 Direct-Connect Power Plants M i n n e s o t a M i c h i g a n W i s c o n s i n S o u t h D a k o t a N e b r a s k a I o w a I l l i n o i s K a n s a s M i s s o u r i N e w M e x i c o O k l a h o m a T e x a s T e x a s 5

7 Service Flexibility Electric Generation Electric generation loads are very similar to Northern s temperature-sensitive heating loads Traditional utility loads swing significantly based on weather changes and variations in forecasts Electric generation loads swing significantly based on weather changes and RTO market orders Active communication between customer and Northern s gas control group (available 24 hours per day) is key to providing flexible and reliable service and managing load variations Northern s 16-hour Market Area design day provides significant hourly flow flexibility Consistent with on-peak power market No hourly penalties on Northern s system Northern provides an 8 a.m. end of gas day true-up for actual usage variations, providing significant daily load flexibility Northern s pipeline system has been designed to accommodate transient loads Two LNG facilities capable of delivering up to 600,000 Dth/day Approximately 6 Bcf of line pack to accommodate load variations Supply receipts throughout the pipeline system provide exceptional physical and price diversity System operational storage gas of 14 Bcf 6

8 Potential Electric Generation Growth Northern anticipates additional growth from new power plants, expansion of existing plants and coal to gas conversions Potential of an additional 6,000 MW of generating capacity and over 600,000 Dth/day of natural gas load New plants 1,500 MW 150,000 Dth/day gas load Expansion 3,200 MW 350,000 Dth/day gas load Conversion to gas 1,200 MW 120,000 Dth/day gas load Northern is well situated to serve these customers Availability of diverse supplies The grid nature of Northern s system is comprised of multiple mainlines and redundant paths to serve the market Availability of peaking facilities and balancing services History of exceptional service reliability Supporting incremental loads with firm transportation assures available capacity to meet market requirements 7

9 Expansion Projects Since 2007 South Dakota $8.0 million 60,000 Dth/day Nebraska $25.0 million 58,000 Dth/day Texas/New Mexico $10.0 million 220,000 Dth/day Minnesota $250.0 million 466,000 Dth/day Wisconsin $860,000 17,500 Dth/day Iowa $88.0 million 122,000 Dth/day Redfield 8 BCF Expansion $52.0 million Granite Wash Supply Interconnect 615,000 Dth/day Wolfberry Supply Interconnect 705,000 Dth/day Northern has invested over $430 million since 2007 to expand its system by over 900,000 Dth/day plus 8 Bcf of storage capacity to meet market needs Northern is expanding its Field Area supply interconnects, resulting in approximately 1.3 Bcf/day of incremental capacity Expansion requirements for firm markets vary based on market location, volume and pressure requirements Northern is ready and willing to partner with customers to complete projects that meet customer growth requirements 8

10 Meeting Market Expansion Needs Northern works with its customers to provide effective services and processes to meet firm service needs FERC should continue to permit its historic pipeline-by-pipeline approach to addressing service needs Increased natural gas demand generally requires pipeline construction, which is subject to FERC regulation and approval by appropriate government agencies FERC has granted blanket authority for projects up to the following levels Automatic Blanket up to $10.8 million; may not be used for mainline expansions Prior-Notice Filing more than $10.8 million up to $30.8 million; agency approvals can range from 30 days to six months, while authorization generally occurs within days Projects costing more than $30.8 million require Section 7 Application Six months prior to filing the Section 7 application, a request to use FERC s pre-filing process is filed. Authorization from FERC may take six to eight months from the Section 7 application filing FERC should consider the following project approval improvements Expand scope of the blanket authorizations to include mainline facilities, MAOP increases Increase the cost-limit for blanket authorizations Identify measures to shorten review time for Section 7 applications Initiate consultation with agencies that typically will not formally consult on blanket projects without FERC s formal initiation 9