US EPA rule would impact gas pipelines; PJM stakeholders pursuing power-gas coordination

The 2023 US Environmental Protection Agency's Good Neighbor Rule will impact natural gas pipelines in 20 states as tighter industrial emissions regulations will affect about 1,220 compressor station engines. Retrofitting the equipment would need to occur year-round which could reduce gas supplies to power generators during peak demand winter periods, PJM Interconnection said March 26.

As a result, an emergency stay was filed with the US Supreme Court in October 2023 by several interstate pipelines and the Interstate Natural Gas Association of America, according to a presentation given during a PJM Electric Gas Coordination Senior Task Force meeting.

The court heard oral arguments in February and amicus briefs are due in April, according to the presentation.

The 1,220 compressor stations that would be impacted have greater than 1,000 horsepower. Those stations would need to be retrofitted to address nitrous oxide emissions by May 2026, PJM staff said, adding that having such a large number of engines out at the same time could be a reliability concern, especially during winter when home heating competes with power generation for available gas supply.

Given the action unfolding at the court, PJM is currently taking a "wait-and-see" approach, staff said.

The PJM task force developed a solution package designed to address areas where power and gas market coordination can be improved. That package was approved by stakeholder vote and PJM rule manual language is being updated for presentation at the PJM Markets and Reliability Committee in April.

If the package receives approval at the MRC, efforts will then be advanced to implement the changes before next winter, PJM staff said. The solution package passed an initial vote with 56% in favor and five abstentions.

The proposed solutions address intraday reliability commitment runs, gas procurement notification, and unit parameter exception updates. Regarding commitment runs, PJM will run multiple intraday real-time commitment runs that are timed to complete in advance of the three intraday gas nomination cycle deadlines.

"Gas units receiving commitments during these runs will be notified with adequate time to procure and schedule needed supply prior to the nomination deadlines," according to PJM.

Regarding gas procurement, gas-fired generators receiving a day-ahead award are to provide notification to PJM that gas either has been procured or is expected to be available to meet their day-ahead commitment.

For unit parameter exceptions, in the short term, exceptions will reflect nomination deadlines and ratable takes in a gas-fired unit's operating parameters when enforced by pipelines.

Additional focus areas

A business practice subcommittee that includes the North American Energy Standards Board has been convened to address power and gas industry communications during critical periods. Discussions began in late January and are expected to continue into the third quarter of 2024, according to the PJM presentation.

Specifically, there is a focus on improving the situational awareness of potential upstream gas supply losses and improved clarity on emergency notices from interstate gas pipelines.

For example, if force majeure is enacted on a compressor station, the exact location is not always identified so power grid operators have asked for additional clarity on when those notices are issued and they have been "getting good feedback" from the pipelines, PJM staff said.

Getting a handle on upstream supply losses has not been as easy to address because of how that information is transferred downstream but PJM staff said hopefully more traction can be made there.

There could also be additional work required by the PJM task force, with stakeholders saying that the solutions approved thus far address the real-time power market but any change there could have impacts on the day-ahead power market.

Questions remain regarding potential impacts to the day-ahead market that could be caused by changes to real-time markets, one stakeholder said.

The next PJM EGSTF meeting will be on April 19 ahead of the April 25 MRC.