Full Title: Rethinking Gas-Electric Coordination Market Design Reforms for Electric Power Reliability During Cold Weather Events
Author(s): Leila Safavi, Jiaxing Wu, Chiara Lo Prete, and Burçin Ünel
Publisher(s): Institute for Policy Integrity
Publication Date: July 21, 2025
Full Text: Download Resource
Description (excerpt):
Severe winter storms have revealed a critical misalignment between the design of natural gas markets and the operational needs of gas-fired power plants, which are increasingly relied upon to maintain electric system reliability during periods of peak demand. This report demonstrates that core features of the gas system—including long-term contract structures, nomination and scheduling practices, and limited market mechanisms for reallocating capacity—are not well-suited to serve the flexible, time-sensitive demands of electricity generation. As a result, generators often face barriers to procuring fuel when it is most needed, contributing to widespread outages during extreme weather events.