| NEW YORK
NEW YORK Feb 26 The New England electricity
grid operator and association of power producers have filed with
federal energy regulators to force electricity providers to
submit bids for the day-ahead market two to three hours earlier
to insure they tap enough supply to support gas-fired power
Filing earlier bids may not allow a power provider to see a
full spectrum of natural gas prices since the market trades
mostly between 10 a.m. and noon EST.
Natural gas makes up the fuel component of the power price.
Bids for electricity prices in New England are currently due
at noon EST (1700 GMT).
The ISO New England and New England Power Pool (NEPOOL)
filed a request on Feb. 7 with the U.S. Federal Energy
Regulatory Commission (FERC) to bump up the time to file bids
under the Federal Power Act, citing a need to improve
reliability of receiving natural gas to support power
"Increased demand for natural gas in New England has
increased competition for the use of the natural gas pipelines
and has made it more difficult for generators to obtain natural
gas for power generation," the filing said.
Market comments in favor or against the proposal are due to
FERC on Thursday.
The New England region has too little pipeline capacity to
deliver as the fuel has grown in popularity for both power
generation and space heating.
Prices at a major New England pipeline hub, Algonquin,
located in the Boston area, have risen by as much as two-to-six
times during peak weather demand.
Natural gas accounted for 15 percent of electricity
production in New England in 2000. By 2011, it had grown to 52
"Given how gas markets function, some gas generators
previously have not been able to perform when called upon due to
fuel issues," ISO and NEPOOL also said in the filing.
ISO is calling for bids to be in at 9 a.m., NEPOOL at 10
The FERC has 60 days to "accept, reject or suspend (meaning
it can defer the effective date for up to five months) filings
made under the section 205 of the Federal Power Act," a FERC
spokesman said via email.
A trade association representing the New England regional
power producers plans to file on Thursday a motion that supports
the NEPOOL proposal.
"If the electricity bids are due by 9 a.m. before there is
any liquidity in the gas market, you put in bids without knowing
the price of gas or, in an extreme situation, how much gas is
available," said Dan Dolan, president of the New England Power
Generators Association (NEPGA). "Even just 10 a.m. will provide
some indication of where the fuel markets are going."
ISO believes the gas market would adjust to a new trading
"We do not believe there will be a material impact on prices
because there appears to be adequate time for price discovery
and, to the extent there's a need for earlier liquidity, the gas
markets will shift in response to the large number of buyers
requiring firm quotes before the day-ahead market bidding window
closes at 9:00 a.m.," an ISO spokeswoman said in an email.
Calpine Corp, NRG Energy, Vitol
and Exelon Corp are among the companies that filed
so-called motions to intervene with the FERC.
An NRG spokesman and Calpine spokeswoman referred to the
NEPGA to provide comment, while an Exelon spokesman said the
company had no further comment beyond what it filed with FERC.
A Vitol spokesman was unable to provide a response in time
for this story.