THE PRESIDENT of New England’s power grid operator is urging Congress to start regulating the natural gas industry more closely to increase the reliability of both gas and electricity service.
Gordon van Welie, the president of ISO New England, said the natural gas and electricity markets are interdependent, but they are not being treated that way in a regulatory sense.
“Congress established rigorous regulatory oversight and mandatory standards over the bulk electric system after the 2003 blackout, but has not established a comparable level of oversight and standards for the single biggest source of energy to that system,” Van Welie said at a hearing of the House Energy and Commerce Committee, referring to natural gas.
Van Welie said greater oversight of the natural gas industry could help avoid shortages during extended cold spells during the winter months when gas needed for both heating and electricity production is in high demand.
He also pointed to recent instances when pressure on gas transmission lines has fallen to dangerously low levels. In New York City on Christmas Eve last year, Con Edison declared a gas system emergency and, with the help of liquefied natural gas, narrowly avoided having to shut the system down.
“Loss of natural gas service to its system would not only have left many customers in the life-threatening position of being without heat during extreme cold; but would likely have caused extensive property damage due to damaged water pipes,” according to a recent report from the Federal Energy Regulatory Commission and the North American Electric Reliability Corp. “Restoring service to impacted customers would have required entering each customer site and manually re-lighting gas appliance pilots. Even with assistance of mutual assistance resources, this process could have taken several months.”
A similar event occurred in Newport, Rhode Island, in 2019 that resulted in thousands of homes losing gas service for up to a week.
The regional grid operator is fairly confident there will be adequate natural gas supplies over the next few years, but as demand for electricity increases to accommodate the decarbonization of the economy the problem could become severe. Van Welie said the New England power grid will have to meet a doubling of average demand for electricity and a tripling of winter peak demand by 2050.
“As has been demonstrated in recent events in other regions, the electric and gas systems are interdependent and a failure in one system impacts the other. [Power grid operators] have no jurisdiction over the natural gas system and do not have the expertise to determine whether it will remain reliable through the energy transition,” van Welie said in his speech to the congressional committee. “Gas infrastructure and supplies will be needed well into the future until commercially available renewable fuels, or alternative technologies, are economic. In particular, while we expect that the average usage of gas will decline, our modeling shows that the peak demand for gas and oil will increase during periods when renewables are not able to perform. Our studies indicate that the most vulnerable scenarios occur during winter cold snaps.”
A big concern is how to transition away from fossil fuels toward renewable energy in a way that maintains reliability. Van Welie returned to an idea he has been pushing for years.
“I believe the most efficient, market-based solution to this problem is effective carbon pricing, which would drive innovation in the market by compensating new and existing clean energy resources for their carbon free energy, while also providing powerful incentives to existing carbon emitting resources to reduce their carbon emissions,” he said, adding that all revenues collected from carbon pricing should be returned to consumers.