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PJM Interconnection Winter Outlook: Adequate Power Supplies Available Under Normal Conditions; PJM Delays Next Power Auction After Prices Spike

On October 14, the PJM Interconnection issued its Winter Outlook on available electricity generation saying PJM has "adequate resources to serve the forecasted demand for electricity this winter under expected conditions, although reserve margins continue to shrink with continued generator retirements and increasing demand."

PJM expects to have approximately 179,800 MW of resources to meet the forecasted peak demand of approximately 141,200 MW, plus a forecast average of about 5,500 MW of electricity exports to neighboring systems.

The system should also remain reliable under several more extreme and less likely scenarios involving lower levels of gas and/or renewable generation, higher electricity demand or increased exports, but extreme weather scenarios may require the use of emergency procedures.

[House Hearing

[October 16-- Agenda Posted. House Environmental Resources and Energy Committee holds a hearing on PJM: Meeting Emerging Electricity Demand. Click Here to watch on-demand.]

"The PJM system is reliable today, but we are keenly aware of the challenges we face as system reserves continue to erode," said PJM President and CEO Manu Asthana. "The trends we are seeing raise system risk under the kind of extreme weather we have seen over the past few years."

PJM remains concerned that increasing demand, ongoing generator retirements and the slow pace of new projects coming online are tightening reserves.

Since Winter Storm Elliott in December 2022, forecasted winter peak demand has risen by over 4,000 MW, while the number of thermal generation resources have decreased.

[During Winter Storm Elliot, 70% of the unanticipated outages of electric generation were natural gas-fired power plants, according to PJM. Read more here.]

These combined factors add a degree of risk that generator failures on the level of Elliott could leave the system vulnerable to power outages.

Michael Bryson, Sr. Vice President – Operations, said PJM and its stakeholders over the past two years have focused on sharpening situational awareness for PJM operators, as well as generator preparation, communication and scheduling.

"We are not that far away from Winter Storm Elliott, so the possibility of that scenario remains very real," Bryson said. "We saw how the work we have done with stakeholders since then has helped generator performance while improving our awareness of the system's true capability at any given time."

[On September 19, Utility Dive reported the North American Electric Reliability Corp issued a statement that it "remains concerned about maintaining sufficient natural gas supplies to address extreme winter conditions." Read more here.

[59% Dependent On Gas For Electricity

[Pennsylvania’s electricity generation lacks the stability and lower costs brought by diversity in our fuel mix. We depend on one fuel to generate 59% of our electricity-- natural gas-- followed by nuclear power-- 31.9%, coal-- 5.4% and 3.7% from other sources. Read more here.

[The price of that fuel is set by foreign markets and is heavily influenced by the whims of adversarial nations and dictators. Read more here.

[The dramatic spikes in natural gas cost as a result of the Russian war in the Ukraine and international markets now setting the price of gas in Pennsylvania are still being felt in Pennsylvania’s electricity rates, as the Public Utility Commission has repeatedly warned electricity consumers. Read more here.

[Currently, in spite of low prices for natural gas, Pennsylvania customers of natural gas utilities are still seeing increases in their rates, for example, Peoples Natural Gas customers will have a 12% increase in their bills, with more coming. Read more here.

[In July, the PJM Interconnection auction for wholesale electricity generation capacity to be delivered in 2025-26 resulted in a 933% increase in electricity costs over 2024-25. Read more here.

[PJM said one of the factors in raising prices was improved risk modeling for extreme weather and accreditation that more accurately values each resource’s contribution to reliability.

[In plain language that means accurately factoring in the potential unreliability of natural gas, among other factors, on which we depend for 59% of our electric generation.

[In September, Sen. Gene Yaw (R-Lycoming) announced plans to add more gas-fired electric generation through a taxpayer-funded PA Baseload Energy Development Fund based on a Texas model. Read more here.

[38,000 MW of renewable electric generation and energy storage has already been approved by the PJM for connection to the electric grid. Read more here.

[However, on September 26, Utility Dive reported concerns by PJM that these projects are not being built for a variety of reasons including procuring equipment, local opposition and financing obstacles.

[Will We Have Enough Gas?

[Pennsylvania natural gas producers like EQT, CNX Resources, Coterra Energy, Chesapeake Energy and many others have been deliberately cutting back production-- EQT alone by 1 billion cubic feet per day-- in an attempt to raise natural gas prices.

[From August 23 to October 11, Baker Hughes reported the number of shale gas drilling rigs in Pennsylvania dropped from 21 to 12-- a 38% decline.

[Between 75% and 80% of the shale gas produced in Pennsylvania is used outside the state and exported to other countries. Read more here.

[In November, Pittsburgh-based EQT Corporation, the largest producer of natural gas in the US, relaunched its "Unleash” LNG Exports initiative that argued the US "has a duty to provide” natural gas to countries like China because they don't have natural gas of their own. Read more here. Read more here.

[On February 28, Ohio US Senator Sherrod Brown and Oregon US Senator Jeff Merkley introduced the Protecting American Households from Rising Energy Costs Act, legislation that would ban the export of crude oil or liquefied natural gas (LNG) to our biggest adversaries: China, Russia, Iran, and North Korea. Read more here.

[LNG gas export capacity will double by 2028 resulting in a harder link to international markets and often higher prices with its resulting impacts on Pennsylvania consumers. Read more here.

[Delay In Next PJM Auction

[On October 11, Utility Dive reported PJM will be delaying the next power auction for “about six months” to give it time to draft more changes to its capacity market auction system. The next auction was originally planned for December.]

PJM’s Forecast

PJM analyzes the expected demand for electricity, weather predictions and other factors to develop its forecast for winter operations.

PJM's ongoing Cold Weather Preparation Guideline and Checklist for generation owners includes everything from increasing staffing for weather emergencies to performing required maintenance activities to prepare equipment for winter conditions.

This checklist is mandatory.

Each year, PJM performs winter readiness assessments in advance of the cold weather months, collecting data on fuel inventory, supply and delivery characteristics, emissions limitations, and minimum operating temperatures.

PJM meets with federal and state regulators and neighboring systems to review winter preparations.

PJM also conducts weekly operational review meetings with major natural gas pipeline operators serving generators in the PJM footprint to coordinate operations with the pipelines that supply a large portion of the gas generation fleet.

PJM and its members also conduct a cold weather operations drill ahead of each winter.

Additionally, ahead of this winter, PJM will schedule site visits to generation resources along with ReliabilityFirst and SERC, two of the six regional organizations that audit reliability standards on behalf of the North American Electric Reliability Corporation (NERC).

In 2023, PJM and the Independent Market Monitor developed and published guidance for generators (PDF) on how best to provide timely and accurate information about their operating parameters and availability during periods of natural gas pipeline operating restrictions.

PJM's all-time winter peak was 143,295 MW, set on Feb. 20, 2015.

Click Here for the complete PJM announcement.

House Hearing

October 16-- Agenda Posted. House Environmental Resources and Energy Committee holds a hearing on PJM: Meeting Emerging Electricity Demand. Click Here to watch on-demand.

NewsClips - PJM:

-- Utility Dive: PJM Plans To Delay Upcoming Electric Generation Auction By 6 Months

-- Utility Dive: Possible PJM Market Changes Could Lower Near-Term Capacity Prices, But Ultimately Give Rise To Higher Prices For A Longer Period Of Time - Morgan Stanley

-- Utility Dive: PJM Floats Plan To Allow Limited Number Of Electric Generating Projects To Jump Into Interconnection Approval Process Early Next Year To Help Address Reliability Issues

-- Utility Dive: Omitting Talen Energy Reliability Must-Run Power Plants From PJM’s Next Capacity Auction Could Cost $14.5 Billion, Organization Of PJM States Says

-- Utility Dive: PJM Interconnection Inflates Electricity Prices By Billions By Not Consistently Accounting For Reliability Must-Run Contracts, Campaign Alleges

-- Utility Dive: PJM Interconnection Market Design Flaws Added Nearly 50% To Latest Capacity Auction Electricity Costs: Market Monitor; PJM To Publish A Response

-- Utility Dive: PJM Is Blocking Battery Storage Interconnection Pathway That Could Unlock ‘Tens Of Thousands Of Megawatts’ Of Additional Capacity For The Grid

-- Utility Dive: PJM Says ‘Concerns Are Growing’ That PJM Cleared Electric Generation Projects Are Not Being Built; Less Than 2 GW Of Capacity Added Almost All Solar; 37,000+ MW Approved

Resource Links - Electric Grid:

-- Pennsylvania’s Electric Grid Is Dependent On One Fuel To Generate 59% Of Our Electricity; Market Moving To Renewables + Storage [PaEN]

-- Guest Essay: Pennsylvania May Not Be Able To Keep All The Lights On In Four Years - By Terry Fitzpatrick, Energy [Utilities] Association of PA

-- PJM Makes Multiple Reliability-Focused Improvements To Prepare For Winter To Deal With 70% Natural Gas, Other Generator Nonperformance In 2022 [PaEN]

-- PJM Reports Natural Gas Power Plants Were Over Half The Forced Outages During Winter Storm Gerri In January; Special Procedures Used For Gas Generators Raised Questions About Market Impacts [PaEN]

-- New NERC Winter Reliability Assessment Finds Elevated Risk Of Blackouts In Extreme Weather Conditions; Natural Gas Supplies Still Vulnerable To These Conditions With 'Devastating Consequences' [PaEN]

-- US EIA Report Shows How Winter Storms Have Reduced US Natural Gas Production, But Disruptions Can Happen Any Time Of The Year [PaEN]

-- Sen. Yaw To Introduce Bills To Establish PA Baseload Energy Development Fund Based On Texas Model; And Have One Permit For Power Plants [PaEN]

-- PA House Republicans Introduce Bill Creating An Energy Advocate With Power To Veto Any Action By Any State Agency That Harms Energy Reliability, Affordability [PaEN]

PA Oil & Gas Industry Public Notice Dashboards:

-- PA Oil & Gas Weekly Compliance Dashboard - October 5 to 18 - Conventional Well Owners Issued 767 Violations For Abandoning Their Wells - So Far, More Than Double Number In 2019; Leaking Gas Storage Area Wells [PaEN]

-- PA Oil & Gas Industrial Facilities: Permit Notices, Opportunities To Comment - October 12 [PaEN]

-- PA Oil & Gas Industrial Facilities: Permit Notices, Opportunities To Comment - October 19 [PaEN]

-- DEP Posted 87 Pages Of Permit-Related Notices In October 12 PA Bulletin [PaEN]

-- DEP Posted 57 Pages Of Permit-Related Notices In October 19 PA Bulletin [PaEN]

Related Articles This Week:

-- Pennsylvania Voters Overwhelmingly Support Stricter Regulations On Fracking, New Poll Finds [PaEN]

-- Saint Vincent College Study Finds Counties With Shale Gas Fracking Wells Using Chemicals That Target Certain Hormones Have Greater Incidence Of Pre-Term Births, Low Birth Weights [PaEN]

-- Beaver County Residents Invited To Join An Oct. 23 In-Person Tour Of Shale Gas Fracking Sites & Infrastructure In Washington County And Discover Its Costs [PaEN]

-- Observer-Reporter Letter: There’s Another Side To The 'Shale Gas Revolution' [PaEN]

-- Sen. Bartolotta, Sen. Yaw Announce Bill To Withhold Gas Drilling Impact Fees To Municipalities That Set More Protective Standards On Natural Gas Development Than State Law, And While There Is a Legal Challenge To Local Restrictions [PaEN]

-- Observer-Reporter Guest Essay: Why Politicians Want You To Pay More For Natural Gas - By Patrick McDonnell, CEO of PennFuture, Former Secretary of DEP [PaEN]

-- PJM Interconnection Winter Outlook: Adequate Power Supplies Available Under Normal Conditions; PJM Delays Next Power Auction After Prices Spike [PaEN]

-- The Derrick: PUC Judge Issues Emergency Order Appointing Aqua Pennsylvania As Temporary Operator For 6 Rhodes Estate Water Companies [Serious Community Impacts Continue From Conventional Oil Well Spill In Venango County] [PaEN]

-- DEP Begins Accepting Applications For New Methane Reduction Grants To Plug Conventional Oil, Gas Wells Oct. 16 [PaEN]

-- Evangelical Environmental Network Delivers Over 36,000 Comments From Pro-Life Christians To Gov. Shapiro, DEP In Support Of Strong Oil & Gas Industry Methane Emission Controls [PaEN]

-- Beaver County Marcellus Awareness Community Receives Grant To Strengthen Communications and Community Engagement Initiatives [PaEN]

-- Susquehanna River Basin Conditions Trigger Low-Flow Water Use Restrictions At 9 Shale Gas Water Withdrawals In Bradford, Susquehanna, Tioga Counties [PaEN]

-- DEP Invites Comments On Proposed Air Quality General Permit (GP-16) Covering Gaseous Fuel-Fired Spark Ignition Internal Combustion Engines [Copy Of Documents ]

-- Team PA & Clean Air Task Force Convene Leaders To Discuss Challenges, Opportunities Of Industrial Decarbonization; DOE Provides Update On Decarbonization Investments In PA [PaEN]

-- Beaver County Marcellus Awareness Community Urges EPA To Move Forward With Strong Regulation Of Vinyl Chloride Under Federal Toxic Substances Control Act, While Calling For A Ban [PaEN]

-- EPA Files $4.2 Million Settlement Of Air Pollution Violations For 2019 Philadelphia Refinery Explosion, Fire; Public Comments Invited [PaEN]

NewsClips:

-- The Energy Age Blog: ‘Amity & Prosperity’ By Eliza Griswold Thrust Fracking In Washington County, PA Into The National Spotlight