DV Journal

Red lights are flashing at one of America’s largest electricity transmission operators over possible power outages after it was forced to spend 700 percent more to buy power for its customers in the latest auction.

“The significantly higher prices in this auction confirm our concerns that the supply-demand balance is tightening,” said PJM President and CEO Manu Asthana.

It’s quite a shock for a nation that leads the world in natural gas and wind power production and ranks second in solar electricity.

PJM Interconnection is America’s largest regional transmission organization, coordinating the movement of wholesale electricity across 13 states, including Pennsylvania, and the District of Columbia. It spent $14.7 billion during the auction to secure some 135,000 megawatts (MW) of electricity. That’s nearly seven times the amount the company paid last year to purchase less power.

PJM officials said there’s enough energy through the spring of 2026, but warned that might not be the case in the future as more coal and natural gas power plants are forced off the grid by new Biden-Harris administration emissions policies.

Those higher energy prices will likely be passed along to consumers in the form of higher bills – possibly between 10 and 20 percent.

The good news, according to Terry Fitzpatrick at the Energy Association of Pennsylvania, is customers will see bills gradually rise because utilities “ladder the contracts over time to try to mute those sudden swings [in prices].”

PJM officials argued prices would lower if there was more supply from more power plants. “The market is sending a price signal that should incentivize investment in resources,” said Asthana.

Instead, the Biden White House has issued a rule requiring existing coal-fired plants that are expected to operate over the long-term to capture 90 percent of their carbon emissions by 2032. The same mandate would also fall on all new natural gas-fired power plants.

Energy experts say there are currently no power plants that can operate under the 90 percent mandate.

PJM estimated between 24,000 to 58,000 MW of energy will be retired from the grid by 2030 without being replaced. Almost 20,000 of that will be due to state and federal regulations.

The North American Electric Reliability Council (NERC) reports that “the electrification of many sectors, such as transportation and technology, increases demand for electricity and the importance of reliability and resilience of generation energy supply.” As a result they project that demand will increase 30 percent by 2050 due to de-carbonization and electrification goals.

The question is where the supply will come from to meet that demand. Thus far, it doesn’t appear to be renewables.

Despite spending more than $420 billion in taxpayer dollars on green energy projects, the Biden-Harris administration yielded few results. Some 40 percent of those projects are delayed, according to the Financial Times.

Energy sector experts are especially concerned about green energy delays. Even if those projects finish on time, they’re not expected to contribute much to the grid.

“Wind only works from winds and sun only works from the sun shining, and those are really expensive forms of energy because the intermittency,” Trisha Curtis, chief executive of the consultant group PetroNerds told InsideSources.

In an analysis released earlier this year, PJM said wind and solar can’t be counted on to provide energy at all times because they’re weather reliant. NERC agreed and noted that low wind conditions could result in the loss of tens of gigawatts of capacity at once.

“The new resource mix can be more susceptible to long-term, widespread extreme events, such as extreme temperatures or sustained loss of wind-solar, that can impact the ability to provide sufficient energy as the fuel supply is less certain,” NERC reported.

GOP presidential nominee Donald Trump promised Tuesday he will revoke the Biden-Harris emissions policy.

“It’s a disaster for our country,” Trump said. “Instead of shutting down power plants, we will open dozens and dozens more, and they’ll happen fast.”

Green energy groups aren’t ready to take the blame. Advanced Energy United suggested PJM should take responsibility for the higher prices claiming that it failed to properly plan out energy infrastructure to build more transmission lines.

Fitzpatrick argued that people and politicians should listen to the electrical engineers at PJM and NERC, not the green activists regarding the potential power shortage.

“They’re saying it’s a real concern the rate at which we’re retiring these plants that can operate around the clock because those are the workhorses of the system.”

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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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If the Biden Administration has its way, the Environmental Protection Agency (EPA) will soon implement a dangerous rule that will further threaten Pennsylvania’s severely strained electric grid. The Biden Clean Power Plan would set unachievable limits using technology that is unavailable in the United States for new and existing gas-fired combustion turbines and existing coal plants, which currently generate two-thirds of Pennsylvania’s electricity. The new mandates will impose an effective moratorium on new natural gas plants and force existing natural gas and coal plants to shutter prematurely. Meanwhile, electric ratepayers, mostly families, will bear the brunt of this dual attack on electric reliability and affordability.

Further, if finalized in current form, the federal proposal would have a detrimental effect across all regions of the United States’ power grid. Pennsylvania, the second-largest net supplier of total energy to other states after Texas, would be particularly devastated by this mandate.

Pennsylvania is a member of the PJM power grid, which consists of 13 states and the District of Columbia. Pennsylvania itself supplies 25% of the installed capacity in the PJM grid. As chairman of the Senate Environmental Resources and Energy Committee, I have held multiple hearings to review grid reliability. Overwhelmingly, the testimonies stated that a rush to shutter our fossil fuel-fired power plants would directly impact our bulk power supply.

During a joint hearing with the Senate Environmental Resources & Energy Committee, and the Senate Consumer Protection and Professional Licensure Committee in February 2023, and in subsequent hearings with the standing committees in the House of Representatives, prior to the rollout of the proposed Biden Clean Power Plan 2.0, PJM warned that Pennsylvania (and other PJM states) could face energy rationing by 2026 and rolling blackouts as early as 2028. PJM referred to state and federal policies as forcing the premature closure of reliable thermal generation, which is increasingly being replaced by unreliable, intermittent sources of weather dependent power.

In June 2023, Rob Bair, president of the Pennsylvania Building and Construction Trades, illustrated his concern about the impact of the plan:

“Under the recently proposed Biden Clean Power Plan, the rest of the country is about to experience what Pennsylvania lived through over the past 4 years under the Regional Greenhouse Gas Initiative (RGGI) threat…an effective moratorium on the construction of new natural gas plants throughout the country. Why? Because the technology doesn’t exist for natural gas plants to co-fire with hydrogen at 30% by 2032 and 96% by 2038, let alone achieve 90% carbon capture by 2035. Obviously, Congress and the courts may have something to say about the plan, but as long as this threat remains, no banking institution in the world will risk billions to finance plants – all of which are likely to be built with union labor – that could become obsolete within just a few years of operation.”

Natural gas, nuclear and coal plants are on-demand energy sources and not dependent on weather or time of day, which are essential for electric reliability. These are the facilities that can provide electricity at 3 a.m. on an extremely cold or extremely hot night.  This EPA proposal, coupled with the threat of RGGI hanging over Pennsylvanians’ heads, would be a travesty if we want Pennsylvania to remain a global leader in energy production.

When looking at the big picture, we have to examine the ramifications of what happened with Europe. Germany, for example, ignored warnings and closed many of its nuclear and coal generation facilities in an effort to reduce carbon emissions.

Unfortunately, Germany now finds itself facing a very serious energy crisis as renewable energy sources came up substantially short of production needs. Germany isn’t alone in its shortsightedness. Democratic leaders in western nations have failed to see the big picture time and time again and portions of Europe are now returning to coal use in record amounts.

In May, Pennsylvania Gov. Josh Shapiro wrote to PJM and expressed significant concerns about grid reliability in the wake of the “narrowly averted prospect of rolling blackouts throughout bitterly cold days and nights” during Winter Storm Elliott. In a changing federal energy landscape, we must ensure we can keep the lights on for Pennsylvanians. I am hopeful that Gov. Shapiro will weigh in personally with the Biden Administration and the EPA and urge them to reconsider this dangerous rule.

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Last month, seven environmental groups wrote a misguided letter to Philadelphia officials bashing legislation that I sponsored as counterintuitive to the city’s decarbonization goals.

In October, six Democrats, including two from the southeast corner of the state, joined all 28 Republicans and our chamber’s lone independent to approve Senate Bill 275. That’s a veto-proof majority, for those counting.

Why? Because the bill’s purpose is simple. It prevents Pennsylvania’s 2,500-plus municipalities from banning access to certain utilities, like natural gas or heating oil. That will preserve consumer access to affordable electricity, no matter where they live, and prevent a chaotic patchwork of regulations that ultimately undermine statewide environmental and energy policies.

It also reaffirms what many local and statewide officials, including the Pennsylvania Public Utility Commission, already understand to be true: municipalities do not have the authority to restrict energy sources.

What the bill does not do is prevent the Philadelphia City Council from pursuing its goal to retrofit all publicly owned buildings to reduce emissions 50 percent over the next decade. It’s not just about ripping out gas lines and oil tanks and installing heat pumps instead. Reducing electricity usage – through upgraded windows, roofs, and insulation – is also a crucial piece of the puzzle.

The aforementioned environmental groups said SB 275 will eliminate any hope of Philadelphia reaching carbon neutrality by 2050. Which begs the question, if the only way to achieve decarbonization is by indiscriminatingly banning utilities deemed “dirty” and “bad,” is that even a good plan? Isn’t there an old adage forewarning the danger of putting all your eggs in one basket?

Banning specific fuel sources in pursuit of “clean energy” makes zero sense in Philadelphia and beyond. First, clean energy is a misnomer. There’s simply no such thing. Even if we shuttered every coal and gas plant across the world tomorrow and began a frantic campaign to install wind and solar farms in their place, we’d need to cover about 1.8 million square kilometers of land and coastline to replace the lost capacity.

And we would need fossil fuels to produce all of those solar panels and wind turbines. Just like we need oil and gas to create and distribute nearly every product we use every single day, from the medications we take to the clothes we wear to the packaging we use to preserve our food. To assume that banning fossil fuels will only impact emissions and electricity prices is to ignore the intricate web that is our economy.

Besides, the city doesn’t exist in a vacuum. It’s connected to a vast, 13-state power grid called PJM, that manages the safe and reliable flow of electricity for 65 million people from Chicago to Washington D.C. and many places in between.

PJM’s operators ensure that its network of transmission lines and generation facilities work in tandem every minute of the day, preventing system overloads that could trigger massive utility failures and inflict untold suffering on millions in its territory. So, if electricity demand spikes in Philadelphia, but environmental policies have forced fossil-fuel plants into nonexistence, there are fewer reliable energy sources to shoulder the burden.

A similar story unfolded in Texas in February when an unprecedented winter storm froze generators and rendered solar and wind farms useless, leaving as many as 4 million Texans without power or water. More than 200 people died amid the chaos. The Electric Reliability Council of Texas, the state’s grid operator, promised to winterize its system to harden it against future storms, but the damage was done. The rest of the nation should take note: a diversified and robust grid is key to preventing systemwide catastrophes.

Which brings me back to the idea of banning access to fossil fuels. If we are willing to sacrifice our food, clothing, shelter, and transportation, doing so might eliminate some carbon emissions in the United States. Globally, U.S. emissions equal about half of what China produces on an annual basis, according to 2018 figures. The annual combined emissions from the other three top polluting nations – India, Russia, and Japan – would likewise take our place.

Then there are the emissions from sources we can’t always control: Volcanic eruptions, livestock, forest fires. Or the damage caused by human activity like deforestation and degenerative agriculture. Even if the United States found a solution to every single unsustainable practice that critics say contributes to climate change, the rest of the world’s leading nations aren’t following suit.

So, what do these groups really want from the city? They want officials to take a sledgehammer to our carefully planned and managed power grid, collapse our economy, and leave Pennsylvanians with higher electric bills, fewer jobs, and unreliable utilities. All for the sake of reducing carbon emissions that will be offset by the rest of the world in perpetuity.

Protecting energy choices for consumers means that residents can pursue “cleaner” electricity sources if they want to or can afford to, while not punishing those who don’t have the option. SB 275 isn’t about protecting special interests – what does a senator from Williamsport owe to Philadelphia’s gas utility?

What I do care about is promoting a sound energy policy that doesn’t leave others behind for the constant pursuit of ideological purity, no matter how impractical or impossible or harmful it is for the very people such policies purport to help.

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Nearly a year ago, Texas’ electrical grid buckled under a historic freeze. More than 200 people died, and millions were left without power for days in subfreezing temperatures.

Industry experts in Pennsylvania said they have learned harsh lessons from the Texas tragedy as they take steps to guard against a similar catastrophe in the Keystone State.  That is good news since a colder than average winter is predicted for 2022.

And Pennsylvania already has built-in advantages over Texas, which has operated for decades on its own deregulated power grid that industry watchdogs blamed in part for last year’s crisis.

The northeast region is accustomed to frigid temperatures and stark weather shifts. So, some measures that Texas grid operators and utility companies took after last year’s cold snap, such as wrapping electric cables with rubber insulation and enclosing infrastructure, are already standard techniques here, said Paul McGlynn, executive director of system operations at PJM Interconnection, one of the country’s largest grid operators.

On top of that, Pennsylvania is part of the Eastern Interconnection, a network of more than a dozen smaller operating authorities that includes PJM Interconnection, whose footprint includes 13 states and the District of Columbia. That gives grid operators more flexibility to divert energy to parts of the country experiencing upticks in demand due to extreme weather.

The state also has a large natural gas supply it can rely on in a pinch, McGlynn said, whereas many Texas power plants were forced to operate at a fraction of their capacity because of a gas shortage that forced some companies to pay more than one billion dollars on the spot market to secure what little gas was available.

“In this part of the county, we’re used to the cold weather,” McGlynn said. “A lot of our facilities are already designed with much colder temperatures in mind. We plan for the peak seasons of the year all year long…We have the ability to rely on importing power from neighbors, and we also export to our neighbors during stressed conditions.”

Democratic Gov. Tom Wolf’s office did not respond to a request for comment about initiatives that could help shore up any potential problems with Pennsylvania’s power grid. However, McGlynn says he feels the overall power grid here is stable and secure, even if the state experienced a historic cold snap, propelled by a polar vortex– an event that has challenged Pennsylvania’s grid in the past.

And he is not alone in that assessment, as the nation’s grid monitor, the North American Electric Reliability Corporation, or NERC, outlined in an annual winter assessment that PJM Interconnection “expects no resource problems” this winter because “installed capacity is almost three times the reserve requirement.”

The Eastern Interconnection Planning Collaborative echoed those findings in its own state-of-the-grid report, issued last month.

“The Eastern Interconnection remains strong, and that the transmission planning activities have yielded a system that is reliable and well-coordinated on a regional and interconnection-wide basis,” the report said. “Going forward, continued vigilance and effective use of planning evaluations both today and in the future are essential to ensure that individual regional transmission plans and the impact of generator retirements and additions complement, rather than conflict with, the regional plans of neighboring Planning Coordinators.”

The Texas tragedy is instructive for grid operators across the county on how to avoid paralyzing blackouts, McGlynn said. And previously, PJM told DVJournal that the grid that serves Pennsylvania is becoming more decentralized, which also helps to prevent widespread outages.

“We do a lot from a lessons-learned perspective. We take reliability very seriously,” he said. “We do a lot to look at not only internally on our own lessons learned, but we look to the industry to see what happened in other parts of the country, and then we line up our processes and procedures and things we use to see how we can improve and what we should improve. We’re more reliable today because of it. It’s good to keep your eyes open.”

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