State utility regulators are urging the PJM Interconnection to push certain proposed generating projects through its stalled interconnection process to help replace retiring power plants.
PJM should also consider using a streamlined study process for proposed resources that would use interconnections from retiring power plants and ending the practice of reviewing “dead applications” that are submitted before PJM starts its new queue process, according to the April 20 letter from the Organization of PJM States Inc.
“Such additional efforts will provide a balanced approach to both retaining existing generation as well as furthering the deployment of new generation resources,” OPSI said.
The OPSI letter comes amid upheaval at PJM, which operates the grid and wholesale power markets in 13 Mid-Atlantic and Midwest states and Washington, D.C.
During Winter Storm Elliott about 47,000 MW in PJM were unexpectedly offline, triggering $1.8 billion in possible penalties and raising questions about the effectiveness of the grid operator’s “capacity performance” framework that penalizes power plant owners for failing to deliver power in emergencies and rewarding those that overperform. The Federal Energy Regulatory Commission has launched an inquiry into PJM’s capacity markets.
And in February, PJM issued a report finding that power plants may be retiring faster than they are being replaced, threatening grid reliability. The grid operator launched a fast-track stakeholder process, called Critical Issue Fast Path – Resource Adequacy, or CIFP, that largely focuses on reforms that could bolster existing power plants. PJM has asked FERC to let it delay upcoming capacity auctions so they can include reform measures.
“We're rattling the foundations here,” Mike Jacobs, Union of Concerned Scientists senior energy analyst, said Friday. “And everything PJM is calling for in this moment of crisis is strengthening the status of the existing supply.”
PJM’s fast-track stakeholder process lacks measures, such as interconnection reforms, to help bring generation online, according to OPSI.
This is “especially poignant” because recent modeling by PJM’s Clean Attribute Performance Senior Task Force shows there is enough new thermal entry to replace over two-thirds of retiring thermal capacity this decade and ample pending non-thermal interconnection requests waiting to come online, according to OPSI.
“This clearly indicates that prioritizing a transition to even just a reasonably functioning interconnection process should be prominently front and center on the CIFP agenda,” OPSI said.
FERC in December approved a PJM proposal to revamp its interconnection review process that includes a multi-year pause in reviewing new proposals, but only projects that entered the interconnection process before 2022 will likely be operating by 2030, according to OPSI.
PJM’s FERC-approved interconnection process reform was overwhelmingly supported by its members, and the transition to the new process is set to begin in July, Jeffrey Shields, a spokesman for the grid operator, said in an email.
Shields said there is no shortage of renewable energy projects moving through PJM’s interconnection process. About 43,000 MW in projects have completed it but are not yet built, and another 100,000 MW is expected to be through by the end of 2025, according to Shields.
“The vast majority of all these projects are renewables and, if they are built, could address most of the long-term reliability concerns PJM has identified,” he said.
Projects that have completed the interconnection process are not being built due to siting, supply chain, or other issues facing the industry, Shields said, noting that only about 700 MW in renewable projects came online last year.
“While PJM will continue to pursue additional refinements to the interconnection process through traditional stakeholder channels, this line of criticism completely misses what is happening in our planning queue right now,” he said.
The PJM Power Providers Group didn’t respond to a request for comment.
The PJM board should consider three options: tie interconnection process reforms to the expedited CIFP timeline; state that efficiency improvements to the interconnection process are “in-scope” in the current CIFP timeline; or launch a new fast-track stakeholder process for bringing generation online to replace retiring units, according to OPSI.
State utility regulators don’t have a voting role in PJM, and OPSI’s letter is one of the few ways it can influence the grid operator, according to Jacobs.
PJM’s stakeholder process is dominated by companies that own power plants and are “lukewarm” to new power supply, he said.
“We might have set this up with a [governance] structure that doesn't really work because of the ways we allocated who gets to vote,” Jacobs said.
The Union of Concerned Scientists is part of a group that last month urged PJM to reduce barriers to new generating resources.
The groups called for immediately streamlining the process for transferring transmission rights from retiring power plants; identifying near-term grid upgrades to help resources get through the interconnection backlog; and, reducing barriers to capacity imports.
Editor’s note: This story was updated to include PJM’s comments.