Extreme weather events justify more coordination between electricity, natural gas sectors
There’s a technical interdependence between the production of natural gas and the production of electricity, which in many states each rely on the other to be produced, a situation increasingly impacted by the ongoing and more frequent assault of extreme weather on both systems.
Think about what happened earlier this year during Winter Storm Uri in Texas, where a failure by natural gas producers to supply adequate fuel to power plants “exacerbated electricity issues” during the February storm and subsequent blackouts, according to a new report from the University of Texas at Austin (UT).
“That interdependence from a technical standpoint is very important for us to focus on so that we can ensure we maintain reliable and safe systems for customers,” said Commissioner Megan Gilman of the Colorado Public Utilities Commission, who moderated From Therms to Watts: Gas-Electric Coordination, Electrification, and Extreme Weather, a general session held Tuesday during the National Association of Regulatory Utility Commissioners (NARUC) Summer Policy Summit.
“We have to figure this out… or people will die” because both sectors “provide critical infrastructure to critical services for customers,” said panelist Jason Ryan, senior vice president at CenterPoint Energy Inc., an American Fortune 500 electric and natural gas utility serving markets in Arkansas, Indiana, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas.
At the same time, there also exists an interdependence between the natural gas and electricity sectors from an economic perspective, Gilman said, noting that some systems around the country continue to grapple with the financial fallout caused by catastrophic storms and wildfires this year.
Gilman pointed out that three ongoing trends demonstrate why coordination between those who oversee and operate the natural gas and electricity sectors has never been more important: the transportation and building heating sectors are converting from liquid and gaseous hydrocarbon-based fuels to electricity; natural gas-fired generation has steadily grown to supply more than 40 percent of U.S. electricity; and disruptive events — such as Winter Storm Uri, widespread heat events and wildfires in the West — demonstrate the vulnerabilities of different types of energy infrastructure.
All three trends, she said, require more coordination around how bulk power system planners, regulated utilities and natural gas pipeline operators deliver reliable energy under growing electrification and extreme weather.
Ryan at CenterPoint Energy — which provides natural gas to some 4.5 million customers in its service territory, while also serving more than three million electricity customers primarily in Texas and Indiana — said the interconnectedness of gas and electricity is what both industries have wanted to have happen for a long time, and “it has happened over time and continues to accelerate,” he said.
Therefore, the infrastructure must be built “given that it’s all interconnected,” said Ryan. “You have to operate it that way. And you have to manage the issues that come out of the interconnectedness, especially as it impacts our electric and natural gas customers.”
For instance, as electric generation comes online using gas infrastructure, Ryan said that it’s important to ensure that new gas generation pays to build the infrastructure for them both to use it. Likewise, the infrastructure should be operated and managed to meet the peak demands of both sets of customers at the same time, he added.
“That means you need to weatherize gas production facilities in the South so that they can produce at those high-peak times because you need them both for electric service and for gas service,” Ryan said.
Winter Storm Uri taught both sectors several important lessons, he added, such as: If you run a load management program, don’t turn off critical gas infrastructure as part of that program. “You will just continue to spiral downward,” he said, referencing the UT report findings.
And don’t just consider the impacts of weather events, said Ryan. Think about interconnectedness issues in the context of both natural and intentional events in which natural gas and electricity would need to be simultaneously provided.
“Just be thoughtful about how you’re managing the systems given the interconnectedness,” he said.
From a financial perspective, virtual panelist Kelly Beaver, vice president of Energy Marketing and Supply for UGI Energy Services, pointed out that it is the infrastructure issues that can cause the price spikes and outages, in turn impacting the dynamic relationship between the two sectors.
One of the key things UGI also identifies as important for natural gas and electricity coordination, Beaver said, is reliability and resiliency, “to be able to deliver [any type of energy] to customers during those peak times.”
For instance, adjusting for variable loads between the electricity and natural gas sectors should be considered and that’s not going to be an inexpensive endeavor, said Beaver, who works on the natural gas side at UGI Energy Services, which is a subsidiary of UGI Corp. that supplies and markets natural gas, liquid fuels and electricity to roughly 40,000 customer locations across the Mid-Atlantic and Northeastern United States.
Generally, the NARUC session panelists agreed that more coordinated planning is needed among the gas and electricity sectors. Ryan suggested better planning would be particularly beneficial at the state level and across regions, for instance.
When asked who else in addition to gas and electric should be included in such planning, both Ryan and Joseph Bowring, president of Monitoring Analytics, the independent external market monitor for PJM Interconnection LLC, suggested the water and oil sectors, while Beaver said the technology sector.
