Largest grid operator dismisses threat of coal and nuclear closures

Source: By John Siciliano and Josh Siegel, Washington Examiner • Posted: Friday, November 2, 2018

The operator of the largest power market in America released a report Thursday finding that its electricity supply would hold up against a range of threats, providing evidence against the Trump administration case for preserving coal and nuclear plants.

“The PJM system is reliable today and will remain reliable into the future,” the grid operator, PJM Interconnection, said in an eight-page summary of a much-anticipated report slated for full release in December.

Andrew Ott, president and CEO of PJM, amplified that assertion Thursday morning during a press conference in Washington D.C.

“The grid is more reliable today than it’s ever been,” Ott said.

PJM covers a large territory, representing 65 million people in 13 states from Illinois to Virginia.

Undercutting rationale for Trump plan: The report weighs against the Trump administration’s interest in using emergency power to keep coal and nuclear plants alive.

“We think government intervention is unnecessary,” Ott said. “Nothing in our report would say there is a specific need for a specific fuel source. We are fuel neutral.”

The White House has reportedly considered asserting a national security justification for providing coal and nuclear plants with subsidies to keep them from retiring. The effort has stalled, but critics fear the administration could try to revive the idea through different mechanisms.

How the study worked: PJM’s analysis of the grid’s resilience released Thursday projected five years into the future, testing more than 300 different scenarios, including extreme ones in which announced retirements of plants occur as planned, the weather is disruptive, and power demand is high.

Potential far off risk: PJM, however, included one scenario in which the grid could face risk – if more retirements of power plants occur than expected.

“Based on results of this analysis we do see a risk we can get into situations where we couldn’t meet all demand under certain circumstances,” Ott said, adding later that any threat is “at least” five to six years away.

What comes next: While there is no “imminent threat” to the grid, PJM said the findings of its report justify its effort to encourage the Federal Energy Regulatory Commission, which oversees wholesale power markets, to take action to more fairly pay fuel sources based on the security they can provide.

PJM has offered a proposal to FERC that would change how power providers are compensated as the grid transitions to more natural gas and renewables, rewarding sources with higher payments that can provide reliable and resilient service.

“There are legitimate discussions about resource attributes that aren’t priced,” Ott said. “My message is: let’s quantify the attribute and price it through the market. It’s a more sustainable and efficient way to do it.”