Regulatory and rate proceedings at FERC can be time consuming and expensive, but this hurdle can be overcome.
Don L. Sytsma is a vice president with R. J. Rudden Associates. He is directly involved in the restructuring, reformation and introduction of customer choice in many markets, and has performed consulting engagements all over the world. Ron Hrehor also is a vice president with R.J. Rudden Associates. His background includes consulting in the energy industry throughout the world, focusing on natural gas market reformation, infrastructure and energy trading issues.
For the natural gas infrastructure and the available pipeline system capacity to be utilized as a foundation for the reduction in power transmission congestion, there are certain issues that need to be addressed. These issues relate both to the power industry's ability to dictate power generation locations, and to the gas industry being able to meet the power industry's needs in terms of cost, delivery, and supply operation.
1. Alignment and Synchronization of Interests
The regulatory, commercial, and operational aspects of natural gas industry and power industry participants, and their interrelationships, need to be understood and joined to achieve the lowest delivered cost of energy to natural gas and power consumers. This joining may necessitate a coordinated and consistent regulatory framework and jurisdiction between the power and the natural gas industries. For example, gas transmission system transportation rates are designed to provide compensation to the gas companies for the delivery of natural gas, and are not specifically designed to provide compensation to the gas companies for the financial benefits that may be achieved in the market through the elimination of power transmission constraints.