IEEE Power & Energy Magazine - November/December 2014 - 81

were subsequently scheduled faced "bumping." Bumping is
the pipeline equivalent of being told to get off the plane after
having boarded.
shippers with nonfirm transportation arrangements also
faced curtailments and interruptions, as well as significant
penalty exposure resulting from enforcement of pipeline
tariff ratable take provisions, i.e., about 1/24th of the daily
quantity per hour. during the frigid portion of the winter
of 2013-2014, shale gas production remained robust: daily
production was reduced by only about 0.8 billion ft3 per day
due to well freeze-ups and related operational constraints
for several days during January, a 6% reduction in average
production from Marcellus. the run-up in gas prices therefore reflected delivery constraints across the supply chain as
well as the coincidence of extreme cold across the eastern
interconnection, which significantly increased the demand
from customers as well as electric generation. this coincidence enabled gas producers with a variety of transportation
options to deploy their respective portfolios to the highest
economic value, often in nearby markets rather than at or
toward the terminus of the supply chain in new Jersey, new
York city, or new england. Like Ldcs with firm entitlements, the distinct minority of gas-fired generators that
possessed firm transportation entitlements were generally
able to obtain sufficient deliveries to perform at full power
output. tVa, for example, has primary firm entitlements to
serve its gas-fired generators. generators in ontario have
primary firm entitlements as well. certain other generators
across the study region have firm entitlements, but that is the
exception not the rule.

energy prices in the PJM and Miso service areas approached
Us$2,000/MWh. emergency petitions were filed by PJM
and nYiso to retroactively lift the Us$1,000/MWh cap in
response to the unprecedented superspike in delivered gas
prices. Ferc responded practically overnight to the growing
crisis, granting the PPas' requests to lift the cap and thereby
allowing generators to recoup the underlying cost of producing energy.
during the polar vortex and the subsequent vortex-like
events in the fourth week of January, many of the pipelines
serving Ldcs and gas-fired generators throughout the eastern interconnection issued capacity constraint warnings and
operational flow orders (oFos). Pipeline operators issue
oFos during periods of pipeline congestion to protect pipeline operational integrity and generally notify shippers that
their transportation services may be restricted. the issuance
of alerts and oFos generally discouraged but did not preclude
shippers with nonfirm transportation arrangements from submitting timely nominations for natural gas, since these shippers knew that nonfirm nominations would probably not be
scheduled. a shipper's submission of a timely nomination for
the use of the pipeline system to serve gas-fired generation is
akin to booking a seat on the shuttle from Boston to Washington, d.c., a week or the day before the desired travel date:
unless the flight is sold out, the airline will typically accommodate the reservation request. the prospect of getting a seat
when the booking is done last minute-in other words, on the
day of travel-can be daunting, especially during the peak
holiday rush. shippers with nonfirm transportation arrangements that did submit timely nominations for natural gas that

140
70
Daily Basis Differential
(US$/MMBtu)

Daily Spot Price (US$/MMBtu)

120
100
80
60

TZ6NY-AGT Citygates

50
30
10
-10
-30
-50
1/1/2014

2/1/2014

3/1/2014

40
20

Transco Zone 6 New York

Transco Zone 5

Algonquin Citygates

01
4

26
/2

20
14

3/

19
/

20
14
3/

01
4

12
/
3/

01
4

3/
5/
2

26
/2

01
4
2/

19
/2

01
4
2/

01
4

12
/2
2/

2/
5/
2

20
14

29
/

20
14
1/

22
/

20
14
1/

01
4

15
/
1/

1/
8/
2

1/
1/
2

01
4

0

Chicago Citygates

figure 2. Daily spot gas prices from January to March 2014.
november/december 2014

ieee power & energy magazine

81



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

IEEE Power & Energy Magazine - November/December 2014 - Cover1
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IEEE Power & Energy Magazine - November/December 2014 - Cover3
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