PJM finds ‘no immediate threat’ to reliable power

Source: Rod Kuckro, E&E News reporter • Posted: Monday, November 5, 2018

The nation’s largest grid operator seized control of the resilience debate yesterday when it issued an analysis that found there is “no imminent threat” to keeping the lights on as coal and nuclear power plants close.

That was the conclusion of a virtual stress test that looked at the resilience of power generators’ fuel supplies in the PJM Interconnection, which provides power to 65 million people in all or parts of 13 states and the District of Columbia in the Mid-Atlantic to the Midwest and operates a competitive wholesale electricity market.

The exercise was designed to test the grid’s limits to endure high-impact, long-term disruptions to generators’ fuel supply.

“Overall, the findings show that this system can withstand an extended period of stress while remaining reliable and fuel secure,” Andrew Ott, PJM’s president and CEO, said during a media briefing in Washington.

The chance of a disruption affecting the grid is “five to six years out at least,” he said.

Still, “I myself think there are actions we need to take in terms of valuing fuel-secure resources,” he said.

Because of its size and evolving generation fleet, PJM has been at the center of a national discussion begun by Energy Secretary Rick Perry about ensuring the resilience of the power grid as owners of nuclear and coal-fired power plants shut down ones that are not competitive in the market.

Perry asked the Federal Energy Regulatory Commission last year to alter market rules to protect nuclear and coal plants because they have on-site, secure fuel supplies (Energywire, Oct. 2, 2017).

In January, FERC unanimously rejected his request and instead opened an inquiry into what resilience means for the regional grid operators such as PJM (E&E News PM, Jan. 8).

Now, the Trump administration is mulling over other options to accomplish Perry’s goal by tying possible aid to national security concerns.

“We think government intervention is unnecessary,” Ott said, saying it would be more inefficient and costly than a market-based solution developed by PJM and its stakeholders.

Ott expects that developing such a solution will require a “deliberate, systematic analysis” likely resulting in a proposal to PJM members in 2019 with any potential market rule changes targeted for filing with FERC in early 2020.

Ott was scheduled to meet yesterday afternoon with FERC Chairman Neil Chatterjee and Bruce Walker, DOE’s assistant secretary for electricity.

He said he hopes FERC will consider the PJM analysis as part of its resilience docket.

“PJM is reliable today. But in this study we are also looking into the future, to stress-test our system to reveal future vulnerabilities and make sure we are resilient under many different conditions,” Ott said.

The PJM analysis considered more than 300 scenarios that could occur from 2023 into the future, involving severe winter weather, customer demand, unanticipated generator retirements and fuel availability.

The “plausible” combination of factors in the future could result in power outages, PJM found.

So the grid operator will launch a process to examine whether and how to value fuel-secure electricity generation.

“Engaging in this conversation and getting ahead of the game is the prudent way to go,” Ott said. “Hope is not a good strategic plan.”