OREANDA-NEWS. The Federal Energy Regulatory Commission (FERC) is nearing a decision on whether to force a major change in operations of US interstate pipelines to accommodate the needs of the electricity sector, which is becoming increasingly reliant on natural gas for generation.

FERC's 16 April meeting agenda, released yesterday, includes the proposal to shift the operating schedules for pipelines five hours earlier to avoid power plant reliability problems.

The commission, which proposed the rule in March 2014, hoped that the gas and electric industries will reach a consensus on adjusting the gas scheduling rules.

But pipeline owners and gas utilities have fought FERC's proposed "gas-electric coordination" rule. The gas industry says the rule would force them to shoulder the costs of overhauling their operations to benefit gas-fired power plants that historically have not paid for firm capacity.

By contrast, US electric grid operators argue the coordination plan will be essential to reliability as they become ever more reliant on natural gas.

FERC's rulemaking aims to solve a scheduling mismatch between pipelines and the electric industry that grid operators have blamed for reliability problems.

US electric grids operate on a 24-hour cycle that starts at midnight in operators' local time, while the gas day start is uniform across North America. The operating day for pipelines now starts at 9am CT, meaning a gas-fired plant on the east coast might be running out of scheduled gas in the middle of the morning ramp, when electricity demand rises sharply.

FERC proposed shifting the gas day to start at 4am CT to avoid this problem.

But pipeline owners and gas utilities have said there is insufficient basis to force them to change their operating practices, blaming reliability problems instead on the failure of generators to contract for firm pipeline transportation capacity.

Critics of the gas day change also argue it would be unreasonable to mandate pipeline changes across the US when data that regional grid operators recently provided to FERC indicated the issue was most prevalent in northeast power markets.

Pipeline groups want FERC to walk away from the proposed 4am CT gas day start and instead approve other parts of its proposed rule that would add pipeline nomination cycles and change their timing. Those changes are generally uncontroversial as they would prevent power generators from having to buy and schedule fuel delivery before they know if the grid operators will dispatch them the next day.

"We think that the scheduling change alleviates need for changes to the gas day because it accommodates some of the commission's concerns," Interstate Natural Gas Association of America general counsel Joan Dreskin said. The group represents US pipeline operators.

FERC next week also plans to act on a proposal that would give pipeline owners more flexibility in recovering the costs of modernization projects by using a "tracker" mechanism that would pass one-time upgrade costs along to customers.