This week’s Pipeliners Podcast episode features Mary Palkovich, a consultant for Xcel Energy, discussing issues around peak shaving and curtailment for gas utility operators.
In this episode, you will learn about methods for peak shaving, including propane air, gas storage, and compressed natural gas. Russel and Mary also recount their curtailment experiences and the lessons learned from real-world situations. Finally, Mary provides her key peak shaving and curtailment takeaways for utility operators.
Peak Shaving & Curtailment: Show Notes, Links, and Insider Terms
- Mary Palkovich serves as a consultant for Xcel Energy. Connect with Mary on LinkedIn.
- Xcel Energy is a leading electric and natural gas energy company that offers a portfolio of energy-related products and services to 3.4 million electricity customers and 1.9 million natural gas customers across several U.S. states.
- Peak Shaving refers to leveling out peaks in gas usage for all consumers. During high demand, natural gas companies will essentially reduce the amount of power consumption at small increments to avoid peak loads.
- Curtailment is the act of restricting or reducing supply. This is particularly common in the oil and gas industry, which has to respond quickly to changes in supply and demand.
- Liquefied Natural Gas (LNG) is natural gas that has been cooled to a liquid state (liquefied), at about -260° Fahrenheit, for shipping and storage. The volume of natural gas in its liquid state is about 600 times smaller than its volume in its gaseous state in a natural gas pipeline.
- Propane Air, also called LPG-Air or SNG, is essentially synthetic natural gas that is formed by mixing vaporized propane or LPG with air. Once mixed, it forms a homogeneous mixture that can be used as a direct replacement for natural gas in combustion applications.
- British Thermal Unit (BTU) is the amount of energy needed to raise 1 pound of water by 1 degree Fahrenheit while at sea level.
- Compressed Natural Gas (CNG) is produced by compressing natural gas to less than 1% of its volume at standard atmospheric pressure.
- CNG trailers are specialized equipment capable of transporting high-pressure gas from one location to another.
- The Operator Qualification Rule (OQ Rule) refers to the 49 CFR Parts 192 and 195 requirements for pipeline operators to develop a qualification program to evaluate an individual’s ability to react to abnormal operating conditions (AOCs) that may occur while performing tasks.
- O&M (Operations & Maintenance) is a comprehensive approach to performing pipeline tasks related to the operation and maintenance of gas and liquid pipeline systems. A robust O&M program provides personnel with the knowledge and understanding of each situation to enable them to correctly assess the situation and take corrective action.
- Cryogenics is the production of and behavior of materials at very low temperatures. Ultra-cold temperatures change the chemical properties of materials.
- HMI (Human Machine Interface) is the user interface that connects an operator to the controller in pipeline operations.
- SCADA (Supervisory Control and Data Acquisition) is a system of software and technology that allows pipeliners to control processes locally or at remote locations.
- SOC 2 Audit address third-party risks in a cybersecurity context by evaluating the internal controls, policies, and procedures that support a service provider’s systems.
- PLCs (Programmable Logic Controllers) are programmable devices placed in the field that take action when certain conditions are met in a pipeline program. A PLC receives information about process conditions and then sends information to devices on a production site in order to control them.
- RTUs (Remote Telemetry Units) are electronic devices placed in the field. RTUs enable remote automation by communicating data back to the facility and taking specific action after receiving input from the facility.
Peak Shaving & Curtailment: Full Episode Transcript
Russel Treat: Welcome to the Pipeliners Podcast, episode 224, sponsored by EnerACT Energy Services, supporting pipeline operators to achieve natural compliance through plans, procedures, and tools specifically implemented to create and retain required records as the work is performed. Find out more at EnerACTEnergyServices.com.
Announcer: The Pipeliners Podcast, where professionals, Bubba geeks, and industry insiders share their knowledge and experience about technology, projects, and pipeline operations. Now, your host, Russel Treat.
Russel: Thanks for listening to the Pipeliners Podcast. I appreciate you taking the time, and to show the appreciation we give away a cool customized YETI tumbler to one listener every episode. This week, our winner is Madellyn Kennedy with NiSource. Congrats, Madellyn, your YETI is on its way. To learn how you can win this signature prize, stick around till the end of the episode.
This week, Mary Palkovich is returning, and we’re going to talk about peak shaving and curtailment in utility operations. Mary, welcome back to the Pipeliners Podcast.
Mary Palkovich: Thank you, Russel.
Russel: Mary and I’ve been having a great time just chatting along. We figured it’s probably time to turn on the microphones and record what we’re talking about because people might be interested.
Mary: That’s right.
Russel: I’ve asked you on to talk about peak shaving and curtailment. I know you have a lot of background and you had those responsibilities for a big part of your career. Probably the best thing to do is just start with a little bit of a definition for those that might not know. What is peak shaving? What’s peak shaving all about?
Mary: Peak shaving, and I’ll talk about it in terms of natural gas, is a method for supplying gas to a distribution system that you don’t rely on all the time. It is reserved for critical weather events or outages.
You have equipment that is on standby, and it is used to shave the peaks when the demand is so high that the normal base gas can’t supply it, so that’s why it’s called, you shave the peaks with peak shaving equipment.
Russel: For those who are not gas utility operators, what they probably don’t understand is the nature of the operation. You don’t control the demand. The demand is what the demand is. What you do is control the supply. You have to keep the pressure in the system adequate to sustain delivery.
Mary: That’s right. You can imagine how residential homes…we can fairly closely predict those. We know people get out of bed at six in the morning, and they turn on the shower, and they maybe load up the stove. We have these high-demand mornings in colder weather climates. We can predict those.
What’s difficult sometimes to predict is if a school is going to be called off, or if there is a manufacturing facility that needs to jack up their gas usage for some configuration that the utility may not know about. Those are some of the events that can happen that can change demand.
Russel: The other thing that’s also true and I have a very vivid memory in my career of working with a utility and we were working around the control room and there was a big cold snap, and they were very concerned about keeping the pressure at certain points in the system.
You have your city gates, and basically what you’re doing is you’re blowing on a straw that breaks apart and goes to a whole lot of places. You can only blow so hard on the straw, I guess is what I’m trying to say. At some point, you have to figure out how to get gas into other places sometimes.
Mary: That’s right. What’s interesting, too, is the interplay between electric and gas. Many of my counterparts over the years have had a lot of confidence in the gas system.
The issue is if the blower motor on the furnace doesn’t blow, and that requires electricity, all the good gas in the world doesn’t heat the home if the blowers aren’t working. The interplay between the two is so critically important.
Russel: Being from South Texas, I have some pretty current memories of exactly that phenomenon. [laughs]
Russel: What I can say is, thank God for that pretty gas fireplace that I never run because my wife and I were huddled up in front of that and cooking on it like we were camping out in our living room.
Mary: We’ve become so dependent upon one another in the gas and electric space because of natural gas, electric fire generation. It’s an interesting play back and forth.
Russel: What are some of the mechanisms that utility operators use to do peak shaving?
Mary: I’m very familiar with LNG, liquid natural gas, and also propane air as a means to inject into the pipeline when natural gas, coming from either Texas, Canada, Kansas, or wherever, needs another boost of peak shaving boost.
LNG is in the north, and I’m familiar with several utilities that have LNG. It’s difficult to build those these days. It still is happening pretty rarely. LNG has to be -240 degrees Fahrenheit for it to stay in its liquid state. Then propane has to be mixed with air to be put into the pipeline so that you can get to the right BTU level.
All of the equipment that supports LNG and propane better be ready when called upon. It’s one of those – I think of the Maytag repairman often. You might be sitting there bored, but when called upon, it better go.
Russel: The guys that run those LNG peak shaving plants, their job, 40 weeks of the year, is pretty routine, pretty mundane, but there are two to six weeks a year where they are just getting after it.
Mary: Yeah, they’re the hero or the goat, and nowhere in between.
Russel: That’s right. It’s a digital, not an analog, right?
Mary: 100 percent, it’s zero or one.
Russel: I’m familiar with a couple of other mechanisms for peak shaving. One would be gas storage.
Mary: I should have mentioned underground storage. That one’s a different animal. When I worked in Michigan, the geology in Michigan is such that there is so much underground cavern storage.
In fact, the utility that I worked for right before I took the job I’m currently doing had 16 storage fields in various sizes and pressures. One of them, it could start gas all the way to 2,000 PSI. It was so tight.
Then also, I know that down in the South, there are a lot of salt caverns that become natural gas storage fields in addition to aquifers that are all over the place, but it’s a geology thing that’s fascinating.
Russel: Yeah, I’ve done a fair amount of work around storage. It’s absolutely fascinating. The interesting thing about storage, as you mentioned, is it’s geologic. There’s a need to have it close to where the demand is at.
Mary: Right. I’m aware of the utility. Probably, everybody listening to this knows who I’m talking about, but in the dead of winter on a design day, this particular utility in Michigan, about 60 percent of its gas comes out of its storage field. It’s the way the system was built up and configured.
When you talk to people in the industry that understand gas and understand pressure and pipes and all that, and you explain that, there is a head scratch that goes “up 60 percent?” from a storage field on a design day. When it’s on, it’s on good.
Russel: It is interesting because, in some of those storage fields, the compression they have is sized quite small because they have such a long time during the year to get the gas into the facility. The withdrawal capacity is super-oversized because when they need it, they need it all. They need it right now.
Mary: This one that I’m describing free flows out – it can come out at 1600 PSI. They have to knock it down until the field gets depleted enough that it drops below the pressure that it wants to be into the pipeline. Then, they have to use compression to get the last 50 percent out of the field. It’s fascinating. For us, in the business, as you know Russel, it is just interesting.
Russel: It is. There are so many things that are outside of your control. It’s not the kind of thing that for those that are coming from the production side, it works more like a choke than the flow control because you turn it on and off in stages. It’s fascinating.
Mary: There’s multiple stages of compression. This one’s for that scenario, and that compression hits this window of operating parameters. It’s quite technical.
Russel: The other thing I’ve seen used for peak shaving is compressed natural gas. They’ll track a trailer with a bundle of high-pressure cylinders, and they will strategically locate them throughout their system because they know historically that when it gets cold, these are the choke points.
They’ll take that gas and move it further up the system and have other places they can inject when they need to inject.
Mary: That’s prudent, too, because those trailers are not just for peak shaving a part of the system that might have low pressure in design day conditions. Those trailers can be used during construction, too. When you need to take a transmission line out and it’s the summer where the load is low and you just hook that up for a month while you get your pipeline fixed. Those are good assets for utilities to have.
Russel: That covers peak shaving, which is the engineering operations fun side of the same topic because the flip side of the coin is curtailment. We should talk about, what is curtailment?
Mary: I love curtailment as a tool to keep costs down for firm customers. Let’s talk about what curtailment is. There are gas customers, typically they are large volume customers, and they say, “I am willing to pay a lower rate to the utility and I’m willing to be curtailed if you give me notice.”
Meaning, “You tell me a day in advance cold weather is coming and I want you to not use natural gas.” A lot of these are manufacturers, large customer users, and they’re willing to be curtailed so that they have a cheap rate on their natural gas use.
What’s nice about that for the utility is they can keep their costs down. The regulators in the various states, mostly in the north, like this because it keeps mom and pops’ rates low, the firm rates.
In the South, I’m aware that curtailment is nice also for the same exact reason, just on a different scale. Like if you think about all those customers along the ship channel outside of Houston, those big users, they’re willing to curtail, too, to keep their rates very low.
Russel: It’s interesting, in the South, the curtailments normally occur on a hot day because it’s all the additional gas that’s required to run the power plants to drive all the air conditioning equipment.
Mary: Isn’t that funny?
Mary: Then I’ve run into utilities, I worked for utility for about eight years, and they had interruptible rates. They had customers that were curtailable but they didn’t enact curtailment because it didn’t seem customer friendly.
It always shocked me that the state that authorized the rates didn’t climb on them to do the curtailment to save the capacity in the pipes for the firm customers. We’ve just described three different kinds of scenarios where curtailable customers get away with a good deal and others that are prepared to be curtailed and are curtailed.
Russel: I want to transition because I think when we were off-mic and having these conversations. It got fun when we started doing a little storytelling about, “Here’s my experience doing peak shaving and curtailment.”
Because anybody that’s done this has, I’ll just say, interesting stories in that domain. I’ll start because I can talk about an interesting situation. I’ve done a lot of work with customers down on the island of Trinidad.
Trinidad’s in the southern part of the Caribbean. It’s about 2.5 million people. It’s an island nation. It’s just off the coast of Venezuela. A lot of industry there. A lot of oil and gas production, big LNG plant, big ammonia plant. All that kind of stuff.
Mary: Beautiful people.
Russel: What’s interesting is their entire infrastructure from production, processing, to the city gate, to the industrial plant is all within 100 miles pipeline, which is unheard of if we think about that in the U.S. because we normally have much larger systems.
I was on the island. At one point, they had an island-wide power outage, and then later I had an opportunity to work with the operator. I’ll say that their curtailment issues were very different than what you would typically find in a utility because they had so little time to react. They basically had four hours to react.
If things on the upstream side, production upsets, and things like that would occur, they had very little time to react. They had to be very clear about not only how much they could curtail, but also how quickly they could curtail.
They had some pretty complex mechanisms to understand, where are we in our current situation? If we had to, who could we curtail and how quickly could we curtail? Really fascinating stuff.
Mary: That is interesting. I wonder, if a customer was called to curtail and they did not curtail for whatever reason, did they pay a penalty gas?
Russel: I don’t know. I don’t know the commercial side of it. I just know the operation side of it.
Mary: Because that’s the tool for the utility. You sign up for this good rate and I call you and I give you 24-hour warning that you need to curtail. If you don’t do it, you will be paying fivefold for your gas. It’s a penalty gas. The regulators love it, too, because then grandma and grandpa still get their cheap gas. The big guys that don’t curtail, they pay the price.
Russel: In this particular case, it was all the same company. It was more punitive, I guess is the word I would use, probably the wrong word to use, but it was more…
Russel: Maybe. Kind of, “We’re going to let you know when you need to move because we cannot curtail you. We don’t have a choice. We don’t have the gas. You’re going to be curtailed.” It was just a matter of dealing with – they had a supply issue and they had to… It was more like an emergency response in our world where you had gas shortages and you had to do an emergency response. It was more like that except that it was more routine if that makes sense.
Mary: On a regular basis.
Russel: It was a fascinating operations challenge.
Mary: There’s the scenario where a large volume customer might self-curtail without knowing they are, because the straw is just too small.
Russel: What would be some of your more interesting curtailment stories?
Mary: My favorite story is, and this was in Minnesota about 20 years ago, we had a sub-20-below-zero morning. One of our senior-most technical engineers was trying to get out of his house to get into the office. We realized that for this huge customer, we couldn’t get the information to them that they needed to curtail. He said, “Well, I’ll go because they’re close to my house. I’ll go over there and make sure that they know.”
He gets to what is the equivalent of a gate station outside of this plant, because he can’t get in. They’ve got security. He says, “Well, I’ll just shut the valve.” He gets out there, and we’re on the phone with him because this is when you’re using cellphones that are the size of bricks and things like that. He says he didn’t have the ability to open the lock on the valve that he was going to shut. It was frozen. This is an engineer who’s not a smoker. He says, “Well, I happen to have a lighter in my pocket.” We wondered why. He lights the lock. Now mind you, he’s at a gas station, a natural gas metering valving station, which to use open flame is risky anyway. He says, “Wait a minute. What am I doing? I’m not operator qualified to do this.”
This whole scenario of we got to get this customer off because they’re going to draw down the pressure in the pipe, and then we’re going to have issues on the firm customers. We got this technical senior engineer who can’t get the lock open. Then he says, “Oh, the crew is here.” The crew shows up. The union lead gets out of the truck, walks up, puts his elbow to the senior engineer, and says, “Move over, Dave.”
He gets out a blowtorch and he goes to the frozen lock. This is the union guy who’s been around forever. He unlocks the thing, shuts the valve, and saves the day. Well, we had so much fun in the engineering department talking about the incompetence of the senior-most technical engineer trying to save the day to prevent this outage because the customer couldn’t curtail because we couldn’t get the information to them. It was comical. And, it all turned out well and fine, but you can imagine…
Russel: I would love to have just been in the…there’s a whole conversation that’s flying off in my head right now as I’m hearing this story. You have a guy who is not OQ, who’s using an open flame at a gate station.
Mary: That’s right. This particular engineer was licensed in the state. He was the best we had, and he was freaking out. We said, “Look, we’ll call the state and get special dispensation for the OQ violation to save a couple of 1,000 customers from freezing out on 20 below. We’ll cover you on that.”
Russel: And then the tech showing up, the union tech showing up with a blowtorch to melt the ice off the lock, so he can get the [laughs] valve closed. I mean, how far outside of the normal O&M process and procedure are you at that point?
Mary: All the way around. I said 20 years ago…I’m doing my math here. It was more like 25 or almost 30 years ago now, because this is 2022. That was early ’90s.
Russel: Oh my gosh. It’s hilarious because I remember the first time I went into a high pressured gas facility. I started working right out of the military in cryogenics, liquid nitrogen, liquid CO2, etc., I remember the first time I started working with that stuff. You develop a healthy respect for it very quickly.
I remember later, the first time I’m actually out of a set of pipelines and a set of valves where I need to put hands on the pipe, and hands-on the valves, and grease valves, and operate things, and blow some lines down. Until you build some experience with it, it’s a little unsettling, I’ll just say. It’s a little unsettling.
Mary: Recently, I had the opportunity to work on a large LNG project. We had a need to get inside of the double-walled LNG tank. There are companies out there that provide cryogenic services, where they can do certain things with not just cryogenic pumps but drop cameras inside tanks, and these cameras are inside of softball-size iron clad.
The whole thing is fascinating. The world of cryogenics is quite specialty, quite technical, and very fascinating.
Russel: It is. It’s interesting to me that I did that. That would have been in the late ’80s that I was doing cryogenics work, and that experience has come back to me. The value of that experience has come back to me many times over my career.
Mary: It’s like once you become a cathodic protection expert, you are for the rest of your life. [laughs]
Russel: Right. You work in it so much that you burn those neuron loops in your brain, where they were. Do you have any other interesting curtailment stories or shaving stories?
Mary: This would just be more of what I saw was a best practice. One of the utilities I worked for knew the criticality of the curtailable customers actually curtailing to save the system.
What they did was they invited every interruptible customer to a technical conference where they bought lunch and gave trinkets, and things like that. It was a one-day, show up at 9:00 and leave at 3:00 type of a thing.
They talked through why curtailment and they advocated that these interruptible customers test their system because some of those large customers that curtailed had their own little peak shaving system. They did the economic analysis and learned that for them it was cheaper to do that versus send their whole team home for the day.
I thought that was quite a best practice. The utility brought in experts, and they had vendors that sold peak shaving systems because some of the newer interruptible customers didn’t realize they had an option besides just going off gas. I just thought that was a best practice.
I did work at a utility where, as I mentioned earlier, they had interruptible customers. They just did not curtail them. I thought, “Well, that’s kind of a miss.” They said, “Well, but the customer doesn’t like to be curtailed.” I said, “Well, how is it that your regulator is not nipping at your heels?”
These conferences that helped the interruptible customer understand how to curtail and what their options were, I just thought was a best practice.
Russel: I could also see, too, how if a customer understands by doing curtailment, what benefit they’re providing to their community. That’s some real value, too.
Mary: If you think about it environmentally, it’s pretty brilliant. Smaller pipes, less going through, you jump off for the day. Usually, a cold snap is two to three days max, if it’s cold-driven. If it’s cold-driven, like you described, where the electric needs the gas for electric generation, it’s still is a weather-related issue. It doesn’t happen that you find out in one hour, you’re going to have a cold snap. You usually know that.
Russel: You see that coming at least three to five days out. I think that’s very true. It’s what was interesting about the project in Trinidad. They didn’t necessarily see it coming because it was related to production upsets.
Russel: Now the nature of gas in the U.S. is production upsets are pretty far abstracted from operating utility.
Mary: The only one I can think of was that recent pipeline issue that was on the East Coast.
Russel: Yeah, where they had a pipeline outage that caused issues. The thing I thought that was very interesting, these are the things that we’re getting better at as an industry is curtailment and the ability to do their curtailment to be automated and built into the HMI as a special set of screens to facilitate that kind of task.
That’s one of those things. That’s a normal operation, but not usual. Meaning, I do it but only do it occasionally. Having some thought in some tools so that you’re not just doing that curtailment off of checklist and notepads can be really helpful to streamline your execution.
Mary: That’s right. The other thing you and I didn’t talk about was the cyber issue now that things are becoming much more… even at the plants, they were the last ones in a lot of utilities to get digital.
The cyber risk is now entering into peak shaving plants because… The utilities are doing a good job, I believe, clamping down on risks of employees using things like flash drives and those things.
Russel: Oh, my gosh. I’ve got just the last couple of inches left to finish a SOC 2 cybersecurity audit. We’ve been working on it for a while. That’s a subject that’s very timely and near and dear to my heart at the moment, the whole cybersecurity thing.
Mary: Right on.
Russel: You talk about that cybersecurity issue getting out to the plants, which have historically been isolated from it, the other thing that’s happening is getting out to the vendors.
If you think about something as simple as a CNG trailer, I’m going to mobilize that CNG trailer, and that CNG trailer is going to have some automation on it, either operated by me or operated by the CNG trailer provider.
Now I’ve got to look at all that from a cybersecurity perspective. I got to make sure my policy is implemented. I’ve figured that all out as it relates to that operation. It just adds a whole nother level of complexity in terms of doing your threat analysis.
Mary: That’s right because the SCADA systems is where the bullies want to attack. They want to go right there.
Russel: It’s generally the soft underbelly of the network because a lot of the stuff that’s in the SCADA systems doesn’t even support some of the more modernized security things depending on how old your PLCs and RTUs and all that kind of stuff are. Again, it’s a whole nother fascinating domain.
What should pipeliners takeaway from our conversation today, Mary? If we were going to say, “Okay, we’ve told some fun stories and talk about this. Here’s what you really ought to take away in practice.” What would you say is probably the most important thing for pipeliners to take away from this conversation?
Mary: I would say that there was a time where it wasn’t that long ago, where peak shaving was deemed something archaic. If you build your pipes right and they’re big enough, you shouldn’t have to peak shave.
That’s not the world we live in because if you do the economics – because every utility configuration is different and every state regulatory environment is different, but the economics should drive it.
There is an environmental component today to not building the biggest pipeline you can build, build just what’s sufficient, and peak shaving does enable that.
Russel: That’s a really interesting point. If I build smaller pipes and I have designed them to operate at lower pressures, I’m inherently going to have less emissions.
Mary: You bet. It’s precision, and it’s complex, but we are good enough to do that. We have that knowledge. It used to be build it and they will come. That doesn’t work anymore.
Russel: The other thing that’s true, too, is the nature of what we’re able to do in our control systems is way more advanced than when we were doing pneumatic control and making major adjustments that required rolling a crew. That’s very different than doing digital control, and I can put in a whole new control algorithm from my house.
Mary: Not just the controls. We used to blow down pipelines and burb and blow down things, and now we capture the gas and put it back in. That’s standard practice.
Russel: That’s one of those things I haven’t had direct experience with. I need to go get my hands dirty and see that because I need to see all that works.
Mary: Call me when we’re offline from this, and I’ll give you some names and numbers.
Russel: [laughs] That will be awesome. I love it when I get to put on my hard hat and PPE, my boots, actually go out in the field. I don’t get to do that near as often as I used to, and I miss it.
Mary: Now you have to have all flame retardant clothing, too.
Russel: I got all kinds of that. That’s not a problem. This has been fun as always, Mary. I do appreciate you coming on board and sharing your experience in this domain. This has been fun. We need to do it again.
Mary: It’s always a pleasure, Russel. Hope your weather down there is nice and warm. It’s chilly here in Minneapolis.
Russel: We’re starting to have a proper spring. We’re getting those temperatures in the mid-70s in the days, in the 50s at night. That’s like a Minnesota summer is what it is.
Mary: [laughs] I have to get down there and play some golf here shortly.
Russel: We’ll see if I can hook you up on that.
Mary: All right.
Russel: I hope you enjoyed this week’s episode of the Pipeliners Podcast and our conversation with Mary. Just a reminder before you go, you should register to win our customized Pipeliners Podcast YETI tumbler. Simply visit pipelinepodcastnetwork.com/win and enter yourself in the drawing.
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Russel: If you have ideas, questions, or topics you’d be interested in, please let me know either on the Contact Us page or reach out to me on LinkedIn. Thanks for listening. I’ll talk to you next week.
Transcription by CastingWords