The Federal Energy Regulatory Commission has approved the PJM Interconnection’s $796 million plan for making transmission upgrades — primarily by Exelon utilities Baltimore Gas and Electric, PECO Energy and Potomac Electric Power — to handle the planned retirement of a power plant in Maryland.
In its Wednesday decision, FERC said arguments against the plan made by the Maryland Public Service Commission, the state’s ratepayer advocate and the Organization of PJM States Inc., or OPSI, were outside the scope of the case.
FERC Commissioner Allison Clements urged PJM and its stakeholders to consider adopting a proactive transmission planning process to address reliability risks so “a full suite of cost-effective solutions can be more carefully considered.”
Talen Energy in April told PJM it planned to retire its 1,282-MW Brandon Shores plant near Baltimore by June 1, 2025. The grid operator’s board in July approved PJM’s proposed “grid solutions package” for bolstering the grid to avoid reliability problems.
The PSC and Maryland Office of People’s Counsel argued, among other things, that Brandon Shores’ retirement was foreshadowed long before Talen told PJM about its decision, given the plant’s age, its low capacity factors and Talen’s financial troubles.
FERC said that because PJM determined that its proposed grid upgrades were needed by June 1, 2025, that the upgrades could be deemed an “immediate-need reliability project,” which isn’t subject to a competitive solicitation for transmission solutions.
“Establishing a new project proposal window for the Brandon Shores deactivation would extend the length of the reliability violation and delay the implementation of the needed transmission facilities,” FERC said.
FERC said it was “encouraged” by PJM’s stakeholder process to examine whether the grid operator should change its generation retirement and transmission planning processes. PJM requires generators to file deactivation notices with the grid operator at least 90 days before they plan to retire a generating unit.
“PJM and the [independent market monitor] believe that stakeholders should consider extending the prior notice period for generation deactivations to increase the opportunity for any required transmission upgrades to be completed, to allow potential new competitive entry, and allow the deactivation to proceed as requested,” the grid operator said in “problem statement.”
PJM’s Deactivation Enhancements Senior Task Force aims to develop a proposal by April.
Clements said the comments by the PSC, the ratepayer advocate and OPSI “paint a troubling picture” about PJM’s grid planning.
“I wonder whether PJM’s extensive reliance on immediate need reliability solutions such as those at issue in this proceeding is in part a symptom of the failure of the region to carry out proactive, scenario-based multi-value planning,” she said.
FERC Commissioner Mark Christie had different concerns about PJM’s proposal.
Talen’s decision to shutter its power plant may have been driven by Maryland’s “net zero” greenhouse gas emissions mandate, which requires a 60% cut in economy-wide carbon emissions from 2006 levels by 2031, Christie said in a concurrence to the decision.
Because of that, the transmission upgrades could be considered public policy projects, which would be paid for solely by Maryland ratepayers instead of having their costs spread across PJM, he said.
Also, the power plant retirement raises questions about deregulation, according to Christie.
“This filing does illustrate … the risks to reliability of depending primarily on a regional capacity market for resource adequacy, rather than on a state’s own integrated resource planning … process, with a resource mix that includes sufficient state-regulated, rate-based, reliability-critical units to ensure its load-serving utilities always have adequate resources,” he said.