Natural gas is increasingly becoming the fuel of choice to
generate electricity, and gas demand from the power sector is
projected to grow substantially given expectations that natural
gas prices will remain relatively low and stable and that a
significant amount of coal-fired generation may close due to
environmental restrictions. The increased use of natural gas to
generate electricity, however, has some in the gas industry
concerned. When a large gas-fired generator is dispatched to
serve electric needs, the pull on the gas system can be great
causing changes in pipeline pressures and reducing system
flexibility to meet other customers’ needs. While many gas-fired
generators have contracted for firm pipeline capacity and gas
supplies, others – especially peaking generators – have relied
on interruptible capacity and spot market purchases. During
periods of peak gas demand, there may be little or no
interruptible pipeline capacity available to serve generators
that have not contracted for their own capacity