Energy Exchange

Federal regulators should reevaluate the incentive model for gas pipelines

The energy industry is in the midst of a massive transformation. Natural gas fired power plants are now the dominant source of electric power in the U.S., and according to numerous studies, natural gas will continue to have a role in our future energy system — even in stringent greenhouse gas reduction scenarios. For the first time ever, renewables supplied more generation than coal in April. New technologies, evolving customer expectations and state laws directing greenhouse gas reductions are driving significant changes in the way we use and consume energy. The pace of this change will be even further accelerated as we turn to electrification as a means of decarbonization.

Regulators must reevaluate their policies and rules to ensure they are keeping up with these major changes. This is particularly true for the current revenue model of gas pipelines, which is built on the idea that “the more you spend, the more you earn.”

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Also posted in Clean Energy, Natural Gas / Comments are closed

The right way for California to divest from natural gas

As California’s drive to wean itself from fossil fuels continues, important new challenges are emerging in its wake. Part of a broader effort to shift the state’s electric grid entirely to clean energy by 2045, for example, includes the Los Angeles Department of Water and Power’s recent announcement to retire three gas-fired power plants, while making a series of local investments to manage and balance the electric load. And with the grid getting cleaner, efforts are now getting underway to electrify as many of the other residential, commercial and industrial activities that currently depend on gas.

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Also posted in California, Climate, Natural Gas / Tagged , , | Comments are closed

California’s move to cut utility gas leaks is a critical part of moving towards a low carbon future

As shown by the recent special report from the Intergovernmental Panel on Climate Change, emissions from fossil fuel combustion in California and elsewhere present dire consequences for the planet. This means California, like the rest of the world, must take real steps now to shift toward a low carbon future.

Similar to many other developed economies, California has a vast oil and gas delivery infrastructure that is integrated into its modern way of life – a system that supports the combustion of fossil fuels in nearly every corner of society. As a result, making dramatic shifts toward a carbon neutral economy as envisioned in a recent executive order by Governor Brown will take a lot of investment. While this investment is underway, it’s appropriate to also make sure the system that delivers energy to homes and businesses is as environmentally benign as possible.

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Also posted in Aliso Canyon, California, General, Methane, Natural Gas / Comments are closed

Resilience proceeding gives FERC a chance to advance gas-electric coordination

Last September, the U.S. Department of Energy (DOE) started a conversation on resilience, asking the Federal Energy Regulatory Commission (FERC) to provide new revenues and guaranteed profits to the owners of old, inefficient coal and nuclear power plants to compensate these resources for certain reliability and (undefined) resilience attributes.

FERC swiftly disposed of that proposal in a January 8 order, finding that it was not warranted and would run counter to its pro-market regulatory model. FERC then asked all of the Regional Transmission Operators (RTOs) and Independent System Operators (ISOs) to explain how they are evaluating and addressing resilience within their respective markets.

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Also posted in Grid Modernization, Natural Gas, Regional Grid / Comments are closed

New England’s energy future lies in the balance

As recent and ongoing activity regarding fuel security, renewable energy procurement and natural gas infrastructure make clear, the energy system in New England is at a critical juncture, the responses and solutions to which will shape the region’s economy for the next 30 years or more.

ISO-NE, the regional electricity grid operator, released its fuel security study raising legitimate reliability concerns based largely on the sufficiency of pipeline infrastructure and expanding deployment of renewable energy. Meanwhile, the Federal Energy Regulatory Commission (FERC) initiated a comprehensive review of electric system resiliency, including reliability and fuel security. Read More »

Also posted in Natural Gas / Comments are closed

Data shows two companies stand alone in their New England pipeline practices

This blog post was co-authored with Levi Marks and Matthew Zaragoza-Watkins

Earlier this month we—a  team of economists at EDF, UC Santa Barbara, University of Wyoming and Vanderbilt University—released  a new study on the natural gas pipeline markets in New England which revealed a distinctive pattern showing that local gas utilities owned by two companies—Eversource and Avangrid—routinely ordered large deliveries, then sharply reduced those orders at the last minute. This “down-scheduling” consistently came too late for anyone else to buy that capacity, thus limiting available gas supply in the wholesale market.

One question people ask: Were these two companies acting any differently from other firms, and how can you tell?

We approached this question as we would any research project by thoroughly investigating the data. Over 18 months, we analyzed scheduled gas flows for all 117 delivery points (nodes) on the Algonquin pipeline for every hour of every day in a three-year study period from August 1, 2013 to July 31, 2016, which we downloaded from the pipeline’s public reporting web site. In total, we looked at approximately eight million data points generated from the scheduling patterns of 18 local gas utilities owned by 11 parent companies.

What we found in those public data was clear and irrefutable. Local distribution companies owned by two of those parent companies—and only utilities belonging to those parents—consistently behaved differently than all the others. We don’t know why, but there’s no question that it occurred. The pattern is clear when you visualize the data. Read More »

Also posted in General, Natural Gas / Comments are closed