FERC seeks to align natural gas pipeline scheduling and RTO and ISO generation despatch times

On 20 March 2014, the Federal Energy Regulatory Commission (FERC) issued a proposed rulemaking and two related orders designed to better align the scheduling of gas flows with the dispatch of electric generation and to improve flexibility associated with the transportation of natural gas. FERC’s actions come at an interesting time. As winter comes to a close, electricity customers in New England are experiencing a significant increase in electricity prices — increases that were not expected when ISO-New England met with FERC last autumn. FERC’s orders appear to respond to conditions in New England, without specifically addressing whether these conditions are due in part to extreme cold, pipeline constraints, disincentives to obtaining firm transportation capacity or some combination of these and other factors.

Citing a steadily increasing reliance on natural gas as a fuel for US electric generation, FERC’s notice of proposed rulemaking (NOPR) does the following: (i) proposes revisions to interstate natural gas transportation nomination deadlines to better align scheduling across the nation’s natural gas and electric grids; (ii) seeks to clarify FERC’s ‘no-bumping’ policy as it applies to enhanced pipeline services; and (iii) proposes to require interstate natural gas pipelines to offer multi-party service agreements in order to enhance flexibility associated with natural gas transportation service…

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