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Senate Environmental Committee Holds May 1 Hearing On Electric Grid Reliability Looking At Natural Gas, Other Generation Failures During Winter Storm Elliot In December

The Senate Environmental Resources and Energy Committee will hold its second hearing May 1 on electric grid reliability and the failure of natural gas and other generation to provide power when called on by PJM during Winter Storm Elliot in December.

Witnesses during this hearing represent generators and are expected to be--

-- Glen Thomas, President of PJM Power Providers Group and former Chair of PA PUC

-- Jim Locher, Keystone-Conemaugh Project Office

-- Dr. Matt Barmack, Vice President of Market and Regulatory Policy At Calpine

-- Rob Dewechter, Regional Vice President Cogentrix

PJM Nonperformance Penalties

On or about the week of April 10, the PJM Interconnection began assessing up to $2 billion in penalties on about 200 electricity generators that failed to perform when called on by PJM during Winter Storm Elliot.

At the peak of Winter Storm Elliott, about 47,000 MW were unexpectedly offline in PJM’s footprint. About 63% of all outages were natural gas-fired power plants, 28% was coal, 4% oil, 2% nuclear, 1% hydroelectric and about 1% “other,” according to PJM. Read more here.

PJM did not release the names of the companies or the penalty amounts, saying that is for the individual companies to disclose to their shareholders and investors.

Click Here for a list of companies operating in Pennsylvania that could be affected.

At least one company has filed bankruptcy as a result of the penalties and six others have sought protection from the Federal Energy Regulatory Commission. Read more here.

On April 7, FERC gave PJM some flexibility for handling member defaults under certain conditions while they continue to participate in PJM’s grid markets. Read more here.

On April 14, PJM asked FERC for additional assistance in resolving nonperformance penalties to help avoid “market disruption, defaults, bankruptcies and the physical loss of assets.” Read more here.

PJM operates the electricity grid and wholesale power markets in 13 states (including Pennsylvania) and the District of Columbia.

Click Here: PJM Frequently Asked Questions Winter Storm Elliot Issues [LOTS of info.]

Click Here for PJM’s Winter Storm Elliott Information webpage.

Takeaways From First Hearing

The key takeaways during the first hearing on this issue February 27 were--

-- Natural Gas Continues To Have A Reliability Problem: 70% of the PJM electric generation that failed to perform during the December freeze were natural gas-fired power plants. Natural gas had the same problems during a cold weather event in 2014 and the polar vortex in 2018. That’s problematic for Pennsylvania because the state depends on natural gas for 53% of our electric generation and the electric grid generally as it becomes more dependent on natural gas.

-- Renewable Energy Generation Isn’t Coming Online Fast Enough: A study PJM released February 24 showed renewable energy generation sources were not coming online fast enough to replace fossil fuel plants that are retiring. PJM has started a critical path analysis to avoid this mismatch that could affect the ability of the grid to reliably supply electricity. Read more here.

-- 35,000 MW Of Renewable Generation Approved By PJM, But Not Connected: PJM said 35,000 MW of renewable resources are through the PJM approval process, but not commercially interconnected to the PJM grid due to issues like supply chains and siting.

-- 95% Of Proposed New Generation In PJM Is Renewable & Storage: 95% of the new energy generation seeking to connect to the PJM grid is solar, wind, and energy storage because renewable energy is cheaper than natural gas and nuclear.

-- Baseload-type Reliability Of Renewable Generation An Issue: While PJM said renewable energy performed “up to their capability,” it does not have the same “essential reliability services,” i.e. continuous baseload generation ability, as thermal generators. Renewables could, if long duration battery storage or other technology is deployed at scale.

-- Independent Energy Office Proposal: Sen. Gene Yaw (R-Lycoming), Majority Chair of the Senate Environmental Committee, said he is working on legislation to create an Independent Energy Office for energy planning and related issues, along the lines of the Independent Fiscal Office established for budget issues. Read more here.

-- Not Addressed Was The Spike In Natural Gas Prices: The hearing did not address the natural gas price spikes caused by international market forces that resulted in natural gas costs going up by as much as 128% for Pennsylvania consumers and electricity costs by as much as 34%. [Read more here]

Click Here to read more from February hearing.

The hearing will be held in Room 8E-B East Wing Capitol Building starting at 10:00 a.m. Click Here to watch live.

Sen. Gene Yaw (R-Lycoming) serves as Majority Chair of the Senate Environmental Committee and can be contacted by calling 717-787-3280 or sending email to: gyaw@pasen.gov. Sen. Carolyn Comitta (D-Chester) serves as Minority Chair and can be contacted by calling 717-787-5709 or sending email to: senatorcomitta@pasenate.com.

Resource Links:

-- PJM Frequently Asked Questions Winter Storm Elliot Issues [LOTS of info.]

-- PJM’s Winter Storm Elliott Information webpage.

Related Articles - Winter Storm Elliot:

-- PJM This Week Sends Penalty Assessments Of Up To $2 Billion To Electric Generators That Failed To Perform During December’s Winter Storm Elliot; Natural Gas Power Plants Had 63% Of Outages [PaEN]

-- 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]

-- PJM’s Preliminary Review Of Christmas Storm Electric Generation Failures Shows Natural Gas Units Failed To Provide Power At Over Triple The Rate Of Other Generation [PaEN]

-- PJM Interconnection: PJM Operated Reliably Throughout Winter Storm Challenges, But ‘Generator Forced Outages Were Unacceptable’ [PaEN]

-- PA Capital-Star: After A Series Of Winter Storms, FERC Approves New Standards For Power Plants To Prevent Power Failures During Extreme Weather [PJM’s December Freeze Included] [PaEN]

-- Guest Essay: Forestall Or Foresee - The Energy Transition And The Pennsylvania Legislature - By Ralph Kisberg, Responsible Drilling Alliance, Lycoming County [PaEN]

PA Oil & Gas Public Notice Dashboards:

-- Pennsylvania Oil & Gas Weekly Compliance Dashboard - April 22 - 28; Conventional Wells Venting Gas; Shale Gas Well Pad Spills [PaEN]