The nation’s largest power market is released a report on how it is coping with power plant retirements. The “fuel security” report from PJM Interconnection, whose territory spans from Illinois to New Jersey, may provide more clues on how the grid operator would respond to future efforts from the Trump administration to prop up struggling coal and nuclear plants.
PJM CEO Andy Ott has criticized the Trump administration’s efforts to intervene in electricity markets on behalf of those facilities, and he told Senate lawmakers last month that there’s nothing that makes him particularly stressed out about the overall reliability of the electric grid. Still, he nevertheless acknowledged that it was a “legitimate question” as to whether the region’s growing dependence on natural gas-fired electricity will become “a fuel security or an over dependency problem,” which today’s study will presumably answer. The operator has been feeling out ways to boost the prices that generators get out of the markets and using the phrase “fuel security” is awfully similar to the Energy Department’s “fuel-secure generation” terminology.
What the PJM industry membership generally wants is fewer old plants on the system so that the electricity prices for those generators that remain can go up in an age where annual power demand is slipping. The trick is doing it without turning into New England, where a dramatic increase in their use of natural gas for electricity over the past decade has stressed out their grid operators. We don’t expect PJM to tell everyone that the grid is falling but given all the efforts to rewrite market rules, we wouldn’t be surprised if there are suggestions to find new ways to price certain “attributes” struggling power plants provide.