DV Journal

Having heard witnesses say America’s largest power grid remains unreliable nearly a year after a close call with blackouts last Christmas, Pennsylvania State Sen. Gene Yaw called the testimony “a little scary.”

Glen Thomas, a former Pennsylvania Public Utility Commission chairman who consults on grid issues, testified during a joint hearing of Pennsylvania and Ohio legislators. “Reliability challenges are likely to get worse, not better,” he said.

Other witnesses were no more encouraging.

“We cannot operate a system with 100 percent renewables,” said Asim Haque, a senior vice president of the PJM Interconnection, which serves 65 million people in all or parts of 13 states and the District of Columbia.

Haque’s statement contradicts what many “green” energy proponents claim about wind and solar power—technologies that account for most new energy sources proposed for PJM because subsidies and regulations have made more reliable sources uneconomical.

Without grid reliability in Pennsylvania (the nation’s largest electricity exporter), there is none in PJM. And reliability has often taken a back seat to the politics of energy policy. That puts Pennsylvania policymakers at the heart of the matter.

Repeated—even urgent—warnings abound that the power grid is increasingly prone to failure. Some of these warnings come straight from grid overseers, including the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation (NERC).

In PJM and neighboring regions, severe cold “can lead to energy emergencies as operators face sharp increases in generator forced outages and electricity demand,” according to a recent NERC assessment. “Forecasted peak demand has risen while resources have changed little in these areas since Winter Storm Elliot (December 2022) caused energy emergencies across the area.”

The bottom line is Pennsylvanians are in dire danger of life-threatening winter blackouts. Let’s not forget the 2012 cold snap in Texas that killed more than 200 people and caused billions of dollars in economic damages.

The reason is painfully clear: States and utilities are shutting down reliable power plants, especially coal-fired and nuclear facilities. They are replacing these reliable sources with unreliable sources, such as wind and solar generators, which do not work on cold, windless nights.

Since its present program clearly is not working, PJM has proposed significant changes to how it secures reliable power plants. Commendable as PJM’s effort is, it has been a long time coming.

Grid reliability wilted for years under conflicting state and federal policies that favored wind and solar at the expense of more reliable fossil fuel and nuclear plants. In addition, ever more stringent federal environmental policies have forced the closure of some of the world’s cleanest coal-fired plants, increasing dependence on other less reliable or more vulnerable sources during cold weather.

For more than a decade in Pennsylvania, subsidies for so-called alternative energy sources have worked against grid reliability. In 2019, then-Gov. Tom Wolf tried to impose a carbon tax on electricity generation by joining the Regional Greenhouse Gas Initiative (RGGI). Wolf’s proposal not only discouraged the construction of new natural gas-fired plants but also hastened the July closure of the state’s largest coal-fired plant at Homer City. Meanwhile, developers canceled plans in 2023 for two gas-fired power plants after failing to get approvals from a state regulatory regime described by some industry sources as the nation’s most hostile.

Although a court ruling killed the carbon tax, Gov. Josh Shapiro has decided to appeal RGGI’s dismissal to the state Supreme Court. Separately, he has proposed increasing alternative energy subsidies. Both actions go in exactly the wrong direction.

Instead, here are some things for Pennsylvania policymakers to consider as a course correction:

• Focus first on cold winter nights with no wind or solar power. Obvious solutions are adequately winterized gas-supply systems and coal and nuclear plants with on-site fuel supplies that protect against the vulnerabilities of just-in-time pipeline deliveries.
• Stop claiming wind and solar can replace coal, gas, and nuclear. They can’t.
• Allow construction of pipelines to supply fuel to gas plants. More than two-thirds of voters support such infrastructure development, according to a poll by the Commonwealth Foundation.
• Resist federal regulations that undermine reliability and change state policy that does likewise.

Grid reliability can be complicated, but it should not be scary.

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“At the current trajectory, PJM is not going to have sufficient power to meet the demands of consumers, and prices are likely to increase.”

That dire warning came from Glen Thomas, president of the industry group PJM Power Providers, at a state Senate Environmental Resources and Energy Committee briefing earlier this week addressing the pressing concern of electrical grid reliability in Pennsylvania.

Grid operator PJM distributes power across 13 states from Illinois to North Carolina from its headquarters in suburban Philadelphia. The company doesn’t generate electricity or operate power plants. Instead, its primary mission is to “ensure the safety, reliability, and security of the bulk electric power system,” including here in Pennsylvania.

And that mission, Thomas warned lawmakers, is in danger as reliable power sources continue to be retired from the grid—something that’s occurring “faster than anticipated.”

Thomas told DVJournal that “demand is increasing, supply is retiring, and it’s not being replaced by the quantity of assets necessary to sustain reliability.”

“It’s a pretty simple supply-and-demand issue,” he said. “Electricity markets are complicated, but the problem itself is that demand is going up, and supply is leaving and not being replaced.”

At the briefing, committee Chairman Gene Yaw (R-Bradford) blamed green-energy politics for the pace of power source retirements.

“Short-sighted environmental policies have forced fossil fuel plants into nonexistence, resulting in fewer reliable energy sources to shoulder the burden of increased demand on Pennsylvania’s electrical grid,” Yaw said.

James Locher, the chief operating officer of Key Con LLC, also spoke at the briefing, laying out how much Pennsylvania households still rely on fossil fuel-generated energy. Key Con LLC manages the large Keystone and Conemaugh coal plants in western Pennsylvania. Locher said these plants deliver “3,400 MW of reliable power” into the PJM system.

And during weather events like 2022’s Winter Storm Elliott, his plant becomes absolutely essential. As the cyclone bomb drove temperatures down and demand up, PJM called for customers to conserve electricity use as it struggled to find power sources to meet demand.

“Without adequate and comparably reliable replacement capacity accounting for the contributions of Keystone, Conemaugh, and other coal-fired units,” Locher said, “future electric power system failures in PJM are more likely during similar extreme weather events.”

PJM itself has been undertaking extensive research to determine the scope of the grid retirement crisis it is currently facing. In research published earlier this year, a company analysis predicted a whopping 21 percent of its “current installed capacity” could be out of commission within seven years, with the largest share of those closures, PJM estimated, potentially coming from government regulations.

The company estimates “40 GW of existing generation … at risk of retirement by 2030.” Breaking it down, PJM projected “6 GW of 2022 deactivations, 6 GW of announced retirements, 25 GW of potential policy-driven retirements, and 3 GW of potential economic retirements.”

Thomas said it could be difficult to determine the effects of environmental policies on costs versus outright closures of plants. “If an environmental regulation changes, and that increases the costs associated with a unit’s ability to produce power, and it’s forced to retire, is that a policy retirement, or an economic retirement?”

“Very few of these policies are mandating retirement,” he posited, “they’re just increasing costs associated with these facilities until they’re no longer economically viable.”

Demand will also rise in the near future, the PJM analysis said, ranging from 1.4 percent to localized 7 percent surges. And what the grid loses in legacy generation, the analysis said, it will not make up for in next-gen renewables.

Thomas told DVJournal that “right now, the market rules are set up in such a way that most units are receiving an economic signal to retire.”

“If we can change those economic rules so that those economic signals change, I believe there is an opportunity to turn this around,” he said. “But on the current trajectory, with the current rules in place, this region is going to be short of power” in the next few years.

PJM’s “New Services Queue” consists “primarily of renewables (94 percent) and gas (6 percent),” the analysis said. The “historical rate of completion for renewable projects has been approximately 5 percent,” PJM noted, and “the current pace of new entry would be insufficient to keep up with expected retirements and demand growth by 2030.”

Yaw pointed out that Pennsylvania’s access to electricity isn’t determined by what happens in its borders.

“What other states do has a great effect on the grid. For example, any of the [PJM] states that say they’re going to go completely green or clean or whatever you want to call it — they say they’re not going to use any more fossil fuel. Well, that means they’re going to rely on someone else to provide power for them in those times when these clean and green energy projects don’t work. They’re intermittent; they depend on the time of day. The example I use is: Where does the power come from for a solar array at 3 o’clock in the morning?”

Yaw said the effect of current and upcoming plant closures could take as much energy off the grid to equal about 40,000 acres of solar panels. “We don’t have 40,000 acres of solar panels in the works. I’m not even sure where we would put 40,000 acres of solar panels.”

“If we keep giving PJM the policy that we’re doing by switching over without a plan behind it, I don’t know what the solution is,” he said.

“There are two solutions: There will be certain times when you operate your appliances or charge your car or whatever, or there will be rolling blackouts. Neither of those sounds like they’re very good options to me.”

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Residents of Pennsylvania came close to facing rolling blackouts when winter storm Elliott hit the week of Christmas last year.

The effects of the storm, a “bomb cyclone,” were bad enough. Strong winds and temperatures dropping to 30 below with wind chill resulted in some 108,000 Pennsylvania households losing power.

In response, the state Senate held a hearing Monday to examine what can be done to improve the electric grid and power generation so consumers don’t suffer future blackouts. Representatives from the Public Utilities Commission, industry groups, and the power transmission utility PJM spoke.

Sen. Gene Yaw (R-Bradford) said some witnesses were using “politically correct” language. “I probably won’t be,” Yaw said. Society needs energy to build an economy, and after that, “you can deal with the environment.”

“We’ve been tinkering with the environmental side without considering the economics and operational side,” Yaw argued. Five years ago, the state had a “perfect mix” of natural gas, coal, and nuclear electricity generation. “We did not have reliability issues at all.”

But now there are political pressures to go to green energy. “I think we’re dealing with a lousy deck,” said Yaw.

Asim Haque with PJM, the region’s transmission utility, said a report that came out Friday found older power plants are not being replaced quickly enough with new sources, despite all the focus on green energy generation. As a result, customers face a very real possibility there won’t be enough electricity supply to meet demand.

“Keeping the lights on is PJM’s most important priority,” said Haque. But the mix of power generation is shifting, raising concerns about reliability. The state’s supply is moving from reliable generation sources like gas, coal, and nuclear power to less reliable solar and wind power.

He also sees the demand for electricity increasing with more data centers coming to Pennsylvania and more electric vehicles hitting the roads.

Gladys Brown Dutrieulle with the Public Utilities Commission (PUC) said, “Reliability is the key to replacing aging infrastructure.”

Natural gas provides 53 percent of the power to generate electricity in the state, nuclear energy provides 33 percent, and coal provides 12 percent. Wind and solar make up the remainder.

Diane Holder, vice president of Reliability First, said they work with agencies in 13 states and Washington, D.C. She noted wind and solar are “weather dependent” and better battery storage is needed to make power output from those sources less variable.

She said the country needs more time to transform its energy generation from current methods to renewable energy. There are also “challenges to integrating renewables onto the grid.”

Yaw said the witnesses mentioned 94 percent of new energy coming online was from wind and solar, with only 6 percent natural gas, which is more reliable.

He asked why more natural gas and nuclear plants aren’t being built. “The more we bring (renewables) online, the more we have a problem (with reliability).” More natural gas plants “would help,” he said.

Dutrieulle noted gas plants are more expensive to build and new nuclear plants are even more costly.

Yaw said that while nuclear plants don’t produce emissions, they require “tons of concrete and plastic (to build). There is a carbon footprint to everything.”

“The projections in this study indicate that the current pace of new entry (of power plants) would be insufficient to keep up with expected retirements and demand growth by 2030,” the PJM report said.

Over the past decade, Pennsylvania has benefitted from the supply of natural gas via the Marcellus Shale source. But in the wake of Russia’s invasion of Ukraine and the resulting increased reliance on natural gas around the world, there is more volatility in the market.

Haque added another obstacle to constructing new natural gas power plants: The ESG movement.

“ESG (Environmental, Social, Governance) requirements, impact whether financing can be obtained,” Haque said. Some large financial institutions, such as BlackRock, have adopted ESG stipulations for their investments and won’t fund fossil fuels.

However, “we do assume we will receive new megawatts from natural gas,” he added.

Sen. Carolyn Comitta (D-Chester) picked up on Holder’s mention of a “great transition” to clean energy, noting that fossil fuels would still be needed during that time.

“Things are happening very quickly,” she said.

Haque said fossil fuels are “still essential.”

Rachel Gleason, executive director of the Pennsylvania Coal Alliance, said coal-powered plants stepped into the breach and saved the state from blackouts last winter.

“During winter storm Elliott, it was coal that came to the rescue again,” she said. And “unreliable wind and solar” are being subsidized and they are not required to pay fines if they do not provide the power they’ve promised. Those subsidies distort the energy market, she said.

But Andrew Williams with SolSystems said solar is part of a “comprehensive energy plan.”

“Solar works any time the sun is up,” he said. “Solar performed as needed during Elliott.” And many new data centers have solar panels on their rooftops, he said. But he admitted it will be unlikely that Pennsylvania will rely totally on renewable energy by 2035 as some people would like.

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It could be a cruel summer for millions of Americans who are not only paying big energy bills but also worried the AC will conk out.

That is because energy experts warn, several regions face potential blackouts and much higher utility bills. The Midwest electric grid has “a high risk” of failure according to the North American Electricity Reliability Corporation (NERC) in its Summer Reliability Assessment report. The report also warns the West Coast, and Texas could have blackouts while rates skyrocket.

In mid-June, utility power providers were warning that hot weather could lead to “capacity problems on the grid.”

Part of the problem, said John Moura, NERC Director of Reliability Assessments and System Analysis, is the rapid remaking of the nation’s electrical grid will pose challenges to grid reliability over the next decade. Recent blackouts in California and Texas, “should serve as a wake-up call for the rest of the country,” Moura said.

Americans are waking up to the problem, said another energy group.

A poll by The National Mining Association (NMA) found about 8 in 10 voters–including a majority of Democrats, Republicans, and independents–want the government to prevent premature closings of functioning power plants until replacement generating capacity is online. The poll found that 9 in 10 voters are concerned about rising electricity rates.

Voters were also asked if the U.S. should ramp up coal production to ease Europe’s dependence on Russian coal for steelmaking and electricity generation. Some 60 percent want greater U.S. coal production, the poll noted.

“Americans are deeply concerned that they are paying far more for a supply of electricity that is less reliable than ever before. With grid reliability deteriorating, energy inflation soaring and the threat of blackouts now a reality for tens of millions of Americans, it’s time for an energy policy reset,” said NMA President and CEO Rich Nolan.

An energy industry business coalition says blame sticker shock on U.S. regulatory policies.

“The rise in electricity prices is, unfortunately, much too predictable considering the energy policies of the past two Democratic administrations promised–and have since delivered–Americans. Between Presidents Barack Obama and Joe Biden, they have forced the shuttering of power plants across the country, made the siting and construction of transmission lines virtually impossible, stopped pipeline expansion, and closed off domestic energy production,” argues Craig Stevens, a spokesman for the group “Grow America’s Infrastructure Now.”

A spokesman for the U.S. Department of Energy did not respond to repeated requests for comment.

Besides energy availability, price is also a problem, a regulator noted.

The Federal Energy Regulatory Commission says electricity prices for June through September in the California, New England, and Texas markets rose 77 percent to 223 percent from last year’s prices. Those numbers came from the U.S. Energy Information Administration (EIA). In its latest “Short Term Energy Outlook” issue, it forecasts electricity prices in the Northeast regions will double. They will exceed $100 per megawatt-hour between June and August. That is up from an average of about $50/MWh last summer.

EIA pointed to the high price of natural gas as a cause of price hikes, as well as constraints on fuel switching to coal from “continued coal capacity retirements, constraints in fuel delivery to coal plants and lower than average stocks at coal plants. New England is feeling the heat of higher prices.

For example, New Hampshire ratepayers will soon dig deeper. Liberty Utilities is seeking approval for an increase in the default residential energy rate from 8.393 cents per kilowatt-hours to 22.223 cents per kilowatt-hours, according to a Public Utilities Commission filing.

Granite Staters using Liberty will pay about 50 percent more for electricity when the new rate takes effect in August, says Donald Kreis with New Hampshire’s Office of Consumer Advocate.

Is there a solution?

NMA spokesman Conor Bernstein said while there is no immediate answer, long-term national policy should be to use domestic energy resources.

“Getting us to our energy future shouldn’t mean disassembling affordability and reliability along the way,” Bernstein contends. “This global energy crisis has underscored the need for U.S. energy leadership and, as this polling clearly shows, Americans recognize the critically important role American coal can play in reinforcing our energy security and that of our allies and they want their elected officials to take action.”

Bernstein also blamed the EPA. “It wants to use every tool in its toolbox to accelerate coal plant retirements. That’s an agenda, that will only exacerbate the reliability and affordability challenges already gripping the country. Doubling down on that approach is insanity.”

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