On April 16, 2015, the Federal Energy Regulatory Commission (FERC) approved a final rule adopting proposals by the North American Energy Standards Board (NAESB) to revise the interstate natural gas nomination timeline. The new ruling moves the Timely Nomination Cycle Deadline for scheduling gas transportation from 11:30 a.m. CCT to 1:00 p.m. CCT, and adds a third intraday nomination cycle during the gas operating day. The commission rejected a proposal to shift the start of the gas day up five hours from 9 a.m. to 4 a.m. CCT.
In the U.S., electric grids operate on a 24 hour cycle that starts at midnight in each operator’s local time, while the gas day is uniform across the country. Most generators chose to not subscribe to higher-priced firm gas service, but rather use lower-priced interruptible service. These requests can be curtailed if insufficient gas supply is available. This poses a larger burden on East Coast generators, whose morning demand ramp occurs between 6 a.m. and 8 a.m., all before the new gas day begins. These generators must accurately predict their gas needs by the last intraday nomination period at 5 p.m. CCT. However, West Coast generators can request intraday adjustments at the first nomination period (10 a.m.). This period occurs during their morning demand ramp and gives them more flexibility to react to higher-than-expected loads.
The proposals are intended to align the gas and electric grids to better accommodate an increasing reliance on natural gas-based generation. These changes allow gas shippers and generators to react more dynamically to changes in demand throughout the day, hopefully resulting in lower operating costs for generators and more efficient allocation of gas volumes for gas utilities and pipeline owners throughout the country.
This change will take effect 75 days after its publication in the Federal Register. We anticipate the effective date to be on or around July 5, 2015.
The information in this page is offered only for general informational and educational purposes. It is not offered as and does not constitute legal advice.