IEEE Power & Energy Magazine - November/December 2014 - 24

per day (MMft3/d) of pipeline capacity firmly contracted
for gas delivery, more than 80% of that capacity is held
by local gas distribution companies (LDCs) that contract
for the maximum capacity required to meet winter peak
demand. At other times, they can release some of this
capacity to merchant generators on a secondary capacity release basis. The pipeline capacity is augmented by
deliveries from an LNG import terminal in Everett, Massachusetts. In addition, New England LDCs rely on LNG
peak-shaving and propane-air facilities to meet their peak
demand requirements. Such resources are not available to
electric power generators, however. On the coldest days,
LDCs use all of their contracted pipeline and other delivery
capacity to meet space heating demand for natural gas. On
those days, generators with subordinate delivery contracts
may have no remaining delivery capacity and therefore be
unable to operate.

4,000
3,800
3,600

MMft3

3,400
3,200
3,000
2,800
2,600
2,400
2,200

D
8 ec.
D
15 ec
D .
22 ec
D .
29 ec
D .
e
5 c.
Ja
12 n.
J
19 an.
J
26 an.
Ja
2 n.
Fe
9 b.
F
16 eb
Fe .
23 b
Fe .
b.

2,000

Sources: Pipeline EBB Data, FERC Index of Customer Data

figure 5. Pipeline flows and contracted capability in New
England, winter 2013-2014.

Day-Ahead Energy
Market Step

Current
Deadline

New Deadline

12 p.m.

10 a.m.

4 p.m.

12-1:30 p.m.

Re-Offer Period for
Participants to Submit
Revisions

4-6 p.m.

From Time Results
Are Posted to 2 p.m.

ISO Completes
RAA Process

10 p.m.

5 p.m.

Participants Submit
Bids to Supply Power
ISO Posts Day-Ahead
Results

figure 6. A sample DAM schedule.
24

ieee power & energy magazine

ISO-NE's 2013-2014 Experience
As we stated above, the winter of 2013-2014 saw a significant southward shift in the Earth's north polar vortex within
the Northern Hemisphere, which led to prolonged cold fronts
over most of the Northeast and Midwest in the United States
and Canada. These cold fronts resulted in record low temperatures and conditions that triggered school and business
closures around the region.
As temperatures dropped, heating demand increased. As
measured in heating degree days (reflecting the difference
in temperature below 65 °F), the 2013-2014 winter was the
third-coldest winter in the past 30 years (see Figure 3).
During this period, spot market natural gas prices in
some areas spiked to historically high levels (see Figure 4),
as consumers relied on natural gas to heat homes and businesses and the gas needs of power generators increased
as electric demand similarly rose. On a number of days
throughout the winter, Northeast gas prices increased to well
above US$20 per million British thermal units (MMBtu) in
response to the high gas use. For example, Algonquin Citygate prices-commonly used to represent New England gas
prices-spiked to well above US$20 per MMBtu on roughly
30 different days from December through February. Some of
the price spikes were quite extreme, with Algonquin prices
peaking at more than US$70 per MMBtu in late January
and early February. Such price levels are well above prices
observed in recent years.
In New England, the convergence of extremely high
demand for electricity and natural gas has led to substantial challenges to electric sector providers that are increasingly reliant on natural gas as a primary fuel for power
generation. LDCs needed all of their contracted pipeline
capacity during peak days that winter. Nominations of
gas pipeline capacity were therefore very high on those
extremely cold days, and subordinate contracts for gas
transport were generally not available to power providers
(see Figure 5). As mentioned above, the regional pipeline
capacity is augmented by deliveries from the LNG import
terminal in Everett, Massachusetts; these averaged about
30 MMft3 this winter. All things considered, utilization
of regional gas infrastructure was very high on a number
of days throughout the winter, leaving very little unutilized pipeline capacity for use by power providers. While
this could have led to shortages of electric power and the
potential for brownouts and blackouts, ISO-NE avoided
this outcome through a variety of programs.

How ISO New England Successfully
Managed the Challenge
ISO-NE was ultimately able to successfully "weather" the
hardships created during the 2013-2014 winter largely
because the ISO 1) had already implemented some operational lessons learned from previous crises, 2) instituted an
oil supply program to boost the reliability and sustainability
of the oil fleet, and 3) strengthened its understanding of and
november/december 2014

Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - November/December 2014