The PJM Interconnection said it will be sending penalty assessments to electric generators that failed to perform during December’s Winter Storm Elliot this week across its service territory of 13 states and the District of Columbia.

Susan Buehler, a spokesperson for PJM said, the grid operator does not disclose the companies receiving penalty assessments or the amount of the assessments.  “The companies themselves are likely to disclose that information to their shareholders.”

Bloomberg has reported the total amount of penalties could be as much as $2 billion.  Read more here.

On March 31, Bloomberg reported Lincoln Power LLC, the owner of two Illinois power plants, had filed for bankruptcy “after its financial strain was exacerbated by nearly $39 million in penalties” levied by PJM.  Read more here.

In the article, PJM was quoted as saying, “PJM has been working with our members over the last several months to minimize member defaults.”

The reason the penalties are being assessed by PJM is these electric generators were obligated by contract to provide electricity when called on by PJM.  PJM called for electricity from these generators during Winter Storm Elliot and they failed to provide it and are therefore subject to monetary penalties.

Natural Gas Outages

Of the 47,000 MW of generation outages December 23-25, PJM now says natural gas accounted for about 63 percent, coal 28 percent, oil 4 percent, nuclear 2 percent, hydro 1 percent and “other” 1 percent, according to PJM’s latest report.

PJM said the “rapid onset of cold temperatures heavily impacted natural gas production, particularly in the Marcellus and Utica basins, which are the predominant source of the natural gas procured by gas generation in the PJM footprint.

“This led to significant loss of gas supply for all downstream gas consumers, particularly larger, more efficient gas-fired power generation units that require nominated supply and higher pipeline pressures to operate.

-- Supplies from the Appalachian Basin shrank 27% from usual levels, according to reports by Bloomberg.

-- Well freeze-offs sent production plunging by more than 20% in Pennsylvania, while output more than halved in Ohio, constraining supplies into the Northeast and the Tennessee Valley.

-- There were also losses of pipeline compression that occurred in Ohio and Pennsylvania, which tended to exacerbate gas delivery issues.

“Based on preliminary information, the greatest cause of outages appears to be failure of plant equipment, along with failure to start, units tripping offline and temperature-related failures.

PJM said part of its task will be to determine exactly why those and other resources didn’t perform.  Read more here.

List Of PA Natural Gas Power Plants

Although PJM did not disclose the electric generation companies being assessed penalties for failure to perform, the Pennsylvania Public Utility Commission publishes a list of companies owning electric generation facilities in the state.

The 2022 report includes these natural gas facilities with a generation operating capacity of over 250 MW, but again, at this point, it is not known which ones will be receiving penalty assessments--

-- Talen Generation LLC - Martins Creek 3 & 4

-- Invenergy LLC - Lackawanna Energy Center

-- Talen Generation LLC - Brunner Island

-- Starwood Energy Group GLBL LLC - Fairless Works Energy Center

-- Connectiv Bethlehem LLC - Bethlehem CC

-- NAES Corp - CPV Fairview Energy Center

-- EthosEnergy - Moxie Freedom Generating Station

-- NAES Corp - Hickory Run Energy Station

-- Tenaska Operations - Tenaska Westmoreland Generating Station

-- Marcus Hook Energy - Marcus Hook

-- Calpine Corp. - York 2 Energy Center

-- NAES Corp - Hunterstown CC

-- The Carlyle Group - Panda Liberty Generating Station (Moxie Liberty)

-- The Carlyle Group - Patriot Power Generation Plan (Moxie Patriot)

-- Ihi Power Services Corp - Armstrong County

-- Helix Generation LLC - PPL Ironwood

-- Exelon Power - Eddystone 3-4

-- Vistra Corp - Fayette Energy Facility

-- Dynegy Power - Ontelaunee Energy Center

-- Hill Top Energy Center LLC - Hill Top Energy Center

-- Talen Energy Corporation - Lower Mount Bethel

-- NRG REMA, LLC - Shawville

-- Liberty Electric Power LLC - Liberty Electric Power

-- Aspen Generating LLC - Allegheny Energy 3, 4, 5 (Springdale)

-- Connectiv Mid Merit LLC - York Energy Center (Delta Power Project)

-- NAES Corp - Birdsboro Combined Cycle Plant

-- NRG Power Midwest - New Castle

-- NRG Power Midwest - Brunot Island CC

-- Handsome Lake Energy LLC - Handsome Lake Energy

-- Shell Chemical Appalachia LLC - Shell Chemical Appalachia Cogen

Again, PJM did not indicate which generators may be getting penalty assessments.

Click Here for more information on these and other electric generation facilities from the Public Utility Commission report.

New Weatherization Standards

PJM said it and other regional grid operators have asked the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation to adopt stricter weatherization standards for generators  “which they have thus far declined to do.”  Read more here.

PJM added, “stronger winterization standards for the natural gas industry are also needed, and is something [the] state and federal government should seriously consider, though PJM does not have any jurisdiction in [the] area of natural gas production.”   Read more here.

Follow-up PA Senate Committee Meeting

The Pennsylvania Senate Environmental and Consumer Protection Committees held a hearing on the Winter Storm Elliot impacts on electricity supplies February 27.  Read more here.

The Senate Environmental Committee anticipates holding a follow up informational briefing from “industry operators” on grid reliability and PJM procedures possibly as early as May 1.

Visit PJM’s Winter Storm Elliott Information webpage for more information on the grid operator’s actions related to the electric generation performance issues.

Resource Links:

-- PJM Frequently Asked Questions about Winter Storm Elliot Issues

Related Articles - Winter Storm Elliot:

-- Senate Hearing On Electric Grid Reliability: Natural Gas Continues To Have Reliability Problems; Renewables Aren’t Coming Online Fast Enough; Energy Office To Be Proposed  [PaEN]

Related Articles This Week - Energy:

-- PUC Denies Conventional Oil & Gas Industry Petition To Reconsider Regulation Of Class One Natural Gas Gathering Pipelines [PaEN]

-- 22 Groups Express Concerns With Pennsylvania’s Carbon Storage Plans, Capacity To Regulate Injection Wells  [PaEN]

-- Guest Essay: A Conservative Argument For Clean Energy -- Follow The Market, Fossil Fuels Are No Bargain - By Dave Jenkins,  Conservatives For Responsible Stewardship    [PaEN]

-- Washington & Jefferson College Hosts April 5 Webinar On Justice40 - Bringing Energy Transition Benefits To Disadvantaged Communities  [PaEN]

-- PUC Urges Consumers To Contact Utilities About Payment Of Past-Due Or High Bills As Winter Moratorium Ends March 31

-- PUC Concludes 2022 Pottstown Explosion Investigation Finding No Evidence Natural Gas Service Contributed To Deadly Event

[Posted: April 2, 2023]

4/3/2023