US FERC chairman wants more reliability and increased infrastructure for gas, renewables

Houston (Platts)--6Mar2014/442 pm EST/2142 GMT


New environmental rules and technologies are causing the energy market to change rapidly in the US, driving the Federal Energy Regulatory Commission to focus on reliability and infrastructure across the grid, FERC Chairman Cheryl LaFleur said Thursday.

The infrastructure will have to support new energy supplies, such as natural gas and renewables, LaFleur said during a discussion at the IHS CERAWeek conference in Houston.

"Almost any energy issue comes to a balance between cost, reliability and the environment," she said. "Those vectors change depending on what side of the triangle you're pushing."

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One challenge for electricity reliability is the disparate scheduling between electricity and natural gas, she said, comparing the electricity market to a 24-hour ATM and the gas market to a bank with tellers. La Fleur said The Natural Gas Council has been working to create an industry-lead effort and FERC is looking to give that effort the opportunity to reach a consensus rather than jump ahead and create regulation.

"But we are also prepared to carry out our responsibility and make a proposal," LaFleur said. "It's not simple. The electricity and gas markets attract investment at different times. It's all about deciding on the best imperfect solution we have."

On environmental rules, LaFleur said she thinks compliance is "well in hand" and FERC is addressing any remaining issues and making sure states and grid operators coordinate well to maintain reliability in the face of plant retirements.

Even though the market is facing a lot of transition right now, LaFleur said she is cautiously optimistic about the outlook of power in the US.

"Some of these things are good problems to have," she said. "Certainly a lot of cheap gas is a good problem and new technology is a good problem but it requires a lot of transition to change the system."

--T.L. Hamilton, tiffany.hamilton@platts.com --Edited by Derek Sands, derek.sands@platts.com

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