The Federal Energy Regulatory Commission hasaccepted interim measures to address the limited operability of the Aliso Canyon natural gas storage facility that could affect reliability and market operations in the California Independent System Operator (CAISO) grid this summer.
The order also directs FERC staff to convene a technical conference following implementation of the measures approved in the order to discuss the effectiveness of those tariff revisions and the need for additional and/or longer-term measures.
Southern California Gas Co.’s Aliso Canyon facility experienced a large natural gas leak last fall that significantly depleted the storage field. The leaking well was capped in February and the state of California prohibited injections of natural gas into the facility until completion of a comprehensive safety review.
The facility serves gas-fired generators in the Los Angeles Basin and San Diego. Its limited operations are likely to stress the region’s gas system this summer when Southern California needs those generators to serve both peak loads and changes in load due to the variable nature of renewable generation.
“Substantial efforts have been made by CAISO, California regulators and the energy companies to enhance planning and preparation, communication and coordination, and situational awareness,” FERC Chairman Norman C. Bay said. “That being said, the situation remains a serious one, and we will continue to monitor Aliso Canyon very carefully. While Aliso Canyon is a non-jurisdictional facility, we are ready to provide whatever assistance we can, as needed or appropriate.”
The situation “highlights the connection between the gas and electric industries and how their operations affect consumers,” Chairman Bay said. “It also points out the need for infrastructure as gas becomes the marginal fuel for power generation in many markets. We need to ensure the gas is there in order to maintain reliability.”
Today’s tariff revisions expire November 30, 2016, unless CAISO files to retain or revise them. They are intended to mitigate operational risks that could lead to power outages due to restrictions of gas deliveries to electric generators. They would work by promoting generator bids that reflect gas system limitations, reducing the chance that CAISO will dispatch generators in a way that harms gas system reliability, and permitting CAISO to reserve sufficient internal transmission transfer capability to react to changes in the gas system. The revisions also will improve the ability of generators to recover fuel costs during this interim period of potential volatility.