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PJM Interconnection: Summer Electricity Supplies Should Be Sufficient Under Anticipated Conditions; Higher Than Expected Generator Outages, Extreme Scenarios Could Bring Risk To Reserve Margins

On May 11, the PJM Interconnection released its annual summer assessment and predicts sufficient supply to meet summer electricity needs for the 65 million people it serves across 13 states and the District of Columbia-- including Pennsylvania-- under anticipated conditions.

PJM projects a non-diversified peak demand for electricity this summer at approximately 156,000 MW and has performed reliability studies at loads nearing 163,000 MW.

PJM’s all-time, one-day highest power use was recorded in the summer of 2006 at 165,563 MW. One megawatt can power about 800 homes.

PJM has more than 186,000 MW of installed generating capacity available to meet customer needs, with resources available in reserve to cover historically observed summer generation outage scenarios.

Risk To Reserve Margins

The risk to reserve margins this year is a result of higher expected generator outage rates based on recent trends, particularly during Winter Storm Elliott, coupled with hot summer weather that drives up demand for electricity.

The National Weather Service predicts higher-than-normal temperatures this summer for most of the U.S., and particularly the East Coast and Gulf Coast.

While its assessment shows that PJM is prepared to maintain reliability this summer, modeling of extreme scenarios indicates tightening reserve margins and the potential need to reduce load by deploying demand response in certain conditions.

Demand Response

PJM can deploy demand response by instructing customers who have agreed in advance to be temporarily interrupted in exchange for a capacity payment to reduce their load.

This scenario could occur in the event of extraordinary electricity demand and high generator outages – an unlikely but possible set of circumstances.

“PJM works diligently throughout the year to coordinate and plan for peak load operations, with reliability as our top priority,” said PJM President and CEO Manu Asthana. “We’re not saying these extreme conditions will happen, but the last few years have taught us to prepare for events we have never seen.”

Extreme Scenarios

Following the lessons of Winter Storm Uri in early 2021, PJM models now incorporate more extreme scenarios that have no historical precedent, including the combination of multiple unlikely conditions occurring at the same time.

“We have learned through experience to expand the set of possibilities we prepare for,” said Mike Bryson, Sr. Vice President – Operations. “We will continue to work with our utility partners and stakeholders to refine our planning, analysis and communications of the risks presented by new and challenging weather patterns and other variables.”

Generator Nonperformance

The failure of natural gas and coal-fired power plants to meet their obligations to generate power during Winter Storm Elliot has heightened concerns about margin projects in the PJM grid area.

A record $1.8 billion in nonperformance penalties were issued to nearly 200 generators by PJM in April in response to these failures.

A number of electric generators have declared bankruptcy or sought protection from the penalties from the Federal Energy Regulatory Commission. Read more here.

Pennsylvania’s largest remaining coal-fired power plant-- Homer City in Indiana County-- announced plans to close in June. Read more here.

A PA Senate hearing on May 1 highlighted the fact wholesale electricity prices in the PJM region have been too low to support coal and natural gas-fired baseload power plants and as a result plant closures are outpacing bringing new renewable energy sources like solar and wind, along with energy storage, online fast enough to replace that capacity. Read more here.

Not addressed in either of the Senate hearings on grid issues this year was the fact that natural gas price spikes caused by international market forces resulted in natural gas costs going up by as much as 128% for Pennsylvania consumers and electricity costs by as much as 34% this past winter. [Read more here]

Visit the PJM Interconnection website for more information.

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]

-- Senate Hearing: Wholesale Electricity Prices Too Low To Support Coal, Natural Gas Power Plants In Market; Natural Gas Reliability Issues Will Continue [PaEN]

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

Related Articles This Week:

-- Penn State Shale [Gas] Network Workshop Features Acting DEP Secretary Richard Negrin May 18-19 In State College [PaEN]