IEEE Power & Energy Magazine - November/December 2014 - 23

Total November Through March Heating Degree Days

4,500
4,000
3,500
3,000

6%

12%
11%
11%
7%
7%
6%
4%
3% 2% 4% 2% 1%
3%
3%
1%
0%
-2%
1%
-1% -2%
-1%
-3%
-2% -4%
-4%
-6%
-6%
-9% -8%
-15%

2,500
2,000
1,500
1,000
500

W

in
W ter
in 19
W ter 84
in 19 -1
t
W er 85- 985
in 19 1
W ter 86 98
in 1 -1 6
W ter 987 98
in 19 -1 7
W ter 88 98
in 19 -1 8
W ter 89 98
in 19 -1 9
W ter 90 99
in 19 -1 0
W ter 91 99
in 19 -1 1
W ter 92 99
in 19 -1 2
W ter 93 99
in 19 -1 3
W ter 94 99
in 19 -1 4
W ter 95 99
in 19 -1 5
W ter 96- 996
in 19 1
W ter 97 99
in 19 -1 7
W ter 98 99
in 19 -1 8
W ter 99 99
in 20 -2 9
W ter 00 00
in 20 -2 0
t
W er 2 01- 001
in 0 2
W ter 02- 002
in 20 2
W ter 03 003
in 20 -2
t
W er 04- 004
in 20 2
W ter 05 00
in 2 -2 5
W ter 006 00
in 20 -2 6
W ter 07 00
in 20 -2 7
W ter 08 00
in 20 -2 8
W ter 09 00
in 20 -2 9
W ter 10 01
20
2 - 0
-Y Winte 01 20
ea
r 2 1- 11
r N int 01 20
or er 2 2- 12
m 0 20
al 13 1
19 -2 3
92 01
-2 4
01
1

0

figure 3. U.S. winter heating degree days, 1994-2014.

where and when it is needed. The United States has an
extensive natural gas pipeline network, augmented by LNG
import terminals and gas storage facilities that are able to
reliably deliver gas to consumers under most conditions,
nearly all the time. The key challenge to the increasingly
gas-reliant power grid is the set of circumstances that systematically results in an inability to provide gas to electric
generators at times of peak demand.

transportation cost recovery. As a result, most gas-fired ISO
and RTO generators rely on capacity release pipeline services, which exposes them to service interruption when gas
demand is high.
In New England, electric generators are increasingly
reliant on natural gas as a primary fuel for power generation. Although the area has roughly 3,700 million ft 3

90

november/december 2014

80
70
60

Transco Z6 NY
Algonquin Citygate
Dominion South Point
Henry Hub

50
40
30
20
10

D
e
9 c. 2
D 0
16 ec. 13
D 20
23 ec. 13
D 20
30 ec. 13
D 20
e 1
6 c. 2 3
Ja 01
13 n. 3
J 20
20 an. 14
Ja 20
27 n. 14
Ja 201
3 n. 2 4
Fe 0
10 b. 14
F 20
17 eb. 14
F 20
24 eb. 14
Fe 201
b. 4
20
14

0

2

Under the current Federal Energy Regulatory Commission
(FERC) regulatory model, interstate gas pipeline owners
only build or increase pipeline capacity in order to meet obligations to shippers holding firm capacity contracts. Absent
long-term firm contracts, no new pipeline capacity is built.
In vertically integrated power markets, electrical generators
often sign such long-term pipeline contracts because they
are often permitted to pass the costs of the new transmission capacity through to their customers. But most merchant
generators in organized power markets say they cannot
afford to pay for firm pipeline capacity over the course
of a year because the generators' actual gas use may vary
from fixed supply agreements, and the ISO and RTO capacity and energy markets currently do not allow for firm-gas

Spot Gas Price, US$/MMBtu

Regulation and Firm Capacity Pipeline Contracts

figure 4. Gas price behavior during the winter of 2013-2014.
ieee power & energy magazine

23



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

IEEE Power & Energy Magazine - November/December 2014 - Cover1
IEEE Power & Energy Magazine - November/December 2014 - Cover2
IEEE Power & Energy Magazine - November/December 2014 - 1
IEEE Power & Energy Magazine - November/December 2014 - 2
IEEE Power & Energy Magazine - November/December 2014 - 3
IEEE Power & Energy Magazine - November/December 2014 - 4
IEEE Power & Energy Magazine - November/December 2014 - 5
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IEEE Power & Energy Magazine - November/December 2014 - 8
IEEE Power & Energy Magazine - November/December 2014 - 9
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IEEE Power & Energy Magazine - November/December 2014 - 11
IEEE Power & Energy Magazine - November/December 2014 - 12
IEEE Power & Energy Magazine - November/December 2014 - 13
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IEEE Power & Energy Magazine - November/December 2014 - 90
IEEE Power & Energy Magazine - November/December 2014 - 91
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IEEE Power & Energy Magazine - November/December 2014 - Cover3
IEEE Power & Energy Magazine - November/December 2014 - Cover4
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