pat wood iii, chairman federal energy regulatory commission new englands platform for infrastructure...
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Pat Wood III, Chairman
Federal Energy Regulatory Commission
New England’s Platform for Infrastructure Development
BostonSeptember 13, 2004
September 13, 2004 Pat Wood, III: Federal Energy Regulatory Commission 2
Stable platform for growth
September 13, 2004 Pat Wood, III: Federal Energy Regulatory Commission 3
Infrastructure status
Healthy generation supply
Needed closer to load
New gas supply needed
LNG facilities could satisfy this demand
Transmission improvements generally in progress
Need to ensure progress in certain areas
September 13, 2004 Pat Wood, III: Federal Energy Regulatory Commission 4
2000 2004
2000 2004
Other
Oil
Nuclear
Hydro
Coal
Gas
New England
New York
27,956
34,521(+ 23%)
38,018(+ 7%)
35,625
Source: RDI PowerDat.
New England generation capacity increased 23 percent from Jan. 2000 through May 2004
September 13, 2004 Pat Wood, III: Federal Energy Regulatory Commission 5
Large increase in gas-fired generation
NEPOOL Historic Generation Growth
0
10,000
20,000
30,000
40,000
50,000
60,000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
MW
12%
18%
16%
13%
33%
8%
6%
7%8%
57%
13%
7%
COALNUCLEAR
HYDRO
OIL
GAS
OTHER
September 13, 2004 Pat Wood, III: Federal Energy Regulatory Commission 6
30
246 281 308 324193
198189
193 197
117
167163
169176
185
140141
143143
0
100
200
300
400
500
600
700
800
900
1993 2003 2005 2007 2008
Bc
f
Electric Generation Residential Commercial Industrial
Generation increased overall gas demand
September 13, 2004 Pat Wood, III: Federal Energy Regulatory Commission 7
Algonquin Gas Transmission Co.Iroquois Gas Transmission System, L.P.Maritimes & Northeast Pipeline, LlcPortland Natural Gas Transmission SystemTennessee Gas Pipeline Co.Joint Maritimes/PNGTS
0.25 Bcf/d0.4 Bcf/d
0.95 Bcf/d
0. 57 Bcf/d
0.03 Bcf/d
2.7 Bcf/d
No additional pipeline capacity is projected to serve the New England region through 2005. The last approved expansion of the DOMAC LNG facility will provide some additional LNG volumes.
Source: EEA’s April 2004 Base Case
Gas supply options limited
September 13, 2004 Pat Wood, III: Federal Energy Regulatory Commission 8
New England
Source: EEA’s April 2004 Data Base adjusted
0
0.5
1
1.5
2
2.5
3
3.5
4
Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08
Bc
f/d
Total Demand Pipeline Capacity
Demand close to pipeline capacity
September 13, 2004 Pat Wood, III: Federal Energy Regulatory Commission 9
Source: Compiled by FERC Staff
1
2
3
4
5
6
7
8 9 10
1211
1. Fall River, MA: 0.8 Bcf/d (Weaver’s Cove Energy)2. Somerset, MA: 0.65 Bcf/d (Somerset LNG)3. Providence, RI: 0.5 Bcf/d (KeySpan & BG LNG)4. Offshore Boston, MA: 0.8 Bcf/d (Northeast Gateway)5. Pleasant Point, ME: 0.5 Bcf/d (Quoddy Bay, LLC)6. Quebec City, QC: 0.5 Bcf/d (Enbridge/Gaz Met/Gaz de France)7. Riviere-Du Loup, QC: 0.5 Bcf/d (Cacouna Energy)8. St. John, NB: 1.0 Bcf/d (Irving Oil & Canaport)9. Point Tupper, NS: 1.0 Bcf/d (Access Northeast Energy)10. Goldboro, NS: 1.0 Bcf/d (Keltic Petrochemicals)11. Belmar, NJ Offshore: N/A (El Paso Global12. Logan Township, NJ: 1.2 Bcf/d (Crown Landing LNG-BP)
Planned Terminals
Existing Import LNG Everett, MA: 1.035 Bcf/d (Tractebel)
Potential LNG terminals may provide 8.5 Bcf/d by 2010
September 13, 2004 Pat Wood, III: Federal Energy Regulatory Commission 10
Transmission grid is strengthening
Orrington –
Point Lepreau
New Haven –
W. Rutland
Plumtree - Norwalk
Bergen - NY
Sayreville – New Bridge Rd.
New Scotland - NYC
Holbrook – K Street
Canal – Oak St
Middletown - Norwalk
Millbury - Card
Glenbrook - Norwalk
New Scobie - Tewksbury
Source: NERC ES&D 2003 version 1, NYISO Power Trends: New York’s Success & Unfinished Business, ISO-New England: NEPOOL Transmission System Project Listing and PowerMap.
345 kV Line
DC Line
September 13, 2004 Pat Wood, III: Federal Energy Regulatory Commission 11
Test of platform during cold snap
Gas and power systems delivered despite record low temperatures and record load
Gas capacity limits reached
Behavior was competitive
Gas moved from electric generation to retail heating based on price signal
Gas generation was not appropriately valued, and oil units could have been usedStress exposed a need for better market integration
September 13, 2004 Pat Wood, III: Federal Energy Regulatory Commission 12
ISO-NE Achieves the Wholesale Power Market Platform
Regional independent grid operation
Regional transmission planning
Fair cost allocation for new and existing transmission
Market monitoring and market power mitigation
Spot markets (real time and day ahead markets)
Transparent efficient congestion management
Firm transmission rights (financial rights)
Resource adequacy (capacity obligations and markets)
September 13, 2004 Pat Wood, III: Federal Energy Regulatory Commission 13
Market tests of the platform
SW Connecticut still stressedPricing/investment signal is distorted
NYC capacity prices > $100 per kW-year, but next door:
NE capacity prices < $2 per kW-year, including SW Conn
Which is the correct capacity value given their similar supply-demand balance?
Boston congestion largely resolvedProper pricing signals work
September 13, 2004 Pat Wood, III: Federal Energy Regulatory Commission 14
Further Progress Expected
1) Finalize RTO status
Independence
Tariff filing rights
Liability & indemnification
2) Regional State Committee (NESCOE)
3) Seams with NYISO Elimination of import/export fees with NYISO
Virtual regional dispatch
4) Resource adequacy
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