American Gas - October 2012 - (Page 32)

t ANDREW SOTO is senior managing counsel at the American Gas Association. SCOTT BUTLER is a senior policy advisor at Con Edison Co. of New York. new york story he Federal Energy Regulatory Commission has focused its attention on coordination between natural gas and electricity since freezing temperatures resulted in well freeze-offs and rolling blackouts in the Southwestern U.S. in the winter of 2010-11. But the story of gas-electric coordination began much earlier in New York City. New York’s reliance on natural gas for the generation of electricity has risen steadily since the 1970s, when the use of coal for electric generation was banned in New York City. The trend accelerated as world events raised concerns about the price and availability of oil and FERC began the phase-out of natural gas price controls. Since then, natural gas has become the principal fuel for generating electricity in New York City. The need to locate electric generation in New York City is driven by the fact that the city is an electric “load pocket” and has its own locational capacity requirement to assure electric reliability. Although electric transmission allows city consumers to receive up to 5,530 MW of electricity from other areas of New York State and New Jersey, that is not sufficient to meet the city’s 2012 projected 11,505 MW peak electric load and provide a reserve margin in case of generation or transmission outages. As a result, the New York Independent System Operator, the state’s electric transmission operator, requires that electric commodity providers purchase or own capacity equal to a substantial percentage (currently 83 percent) of their customers’ peak load within the city borders. Any remaining capacity and the required reserve margin may be purchased from generators the BY SCOTT BUTLER located elsewhere in New York. Con Edison, the New York State Reliability Council, and NYISO have developed a unique system that relies on dual-fuel-capable generation units to balance the reliability needs of the city’s electric and gas consumers. The system was developed to ensure that both gas and electric reliability in New York City can be maintained, even if a major gas system failure occurs during a period of high electric demand. In the event of such a failure, a few gas-fired generators could trip off-line, but dual-fuel-capable units already burning oil or that can quickly shift to oil using their automatic fuel switching will be able to maintain electric service. At the same time, when the generating units switch to oil, they help stabilize falling gas system pressures until remotely operated valves can be closed. Making the Switch Automatic The city’s gas-electric coordination system is implemented through a series of interrelated requirements. Most important, Con Edison’s state-regulated gas transportation tariff generally requires interruptible gas-fired generators to be dual-fuel-capable and maintain a five-day supply of backup fuel. Recent electric interconnection requirements require new generators connecting to Con Edison’s electric transmission and gas transportation systems to install automatic fuel switching systems. Nearly 72 percent of electric generating capacity in New York City is dual-fuel capable, 23 percent relies only upon natural gas, and 5 percent relies solely on oil. To make sure this dual-fuel-capability can be relied upon in the event of a gas system contingency, NYSRC’s local electric reliability rules require designated dual-fuel-capable genera- 32 AMERICAN GAS OCTOBER 2012

Table of Contents for the Digital Edition of American Gas - October 2012

American Gas - October 2012
Contents
President’s Message
Industry News
In the Know
Safety First
Tech Talk
Keep the Lights On
Buyer’s Guide 2012
Places to Be
Jobline
Advertisers’ Index
Noteworthies
Marketplace
Facts on Gas

American Gas - October 2012

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