PJM Aims to Keep Older Plants Open, Cites Grid Reliability in Eastern U.S.

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Researched by Industrial Info Resources (Sugar Land, Texas)--PJM Interconnection (Valley Forge, Pennsylvania) is seeking permission from the federal government to ask owners of plants that are currently due to shut down to keep their plants running into next winter. PJM, an Eastern U.S. regional power transmission organization, filed a request on Christmas Eve with the Federal Energy Regulatory Commission (FERC).

Ray Dotter, a spokesman for PJM, wrote that "PJM is concerned about having sufficient resources during the winter of 2015/2016, given planned environmental-related retirements and the record of generator unavailability last winter."

The environmental-related retirements involve plants that will not comply with the Mercury & Air Toxics Standards (MATS) regulations from the U.S. Environmental Protection Agency (EPA) (Washington, D.C.). The cost of bringing older coal-fired power plants into compliance with MATS has been deemed too high for various plant owners. As a result, some plant owners plan to shutter some facilities before the MATS compliance deadline in June 2015.

Recent cold snaps and extended periods of hot summer weather have caused PJM to be concerned about the possibility of power outages, prompting discussions between PJM and plant owners.

These discussions are centered on the possibility of making those plants available beyond their currently planned shutdown dates. PJM is checking with owners to see if any retirements can be delayed.

In addition, PJM has proposed a plan to have plants in its region running at all times to provide power on demand during spikes in usage. Keeping plants ready to run on demand increases maintenance costs. The concern over increased operation and maintenance costs have to be balanced with the other side of the equation--the costs of dealing with power outages if generation is not able to keep up with demand.

Just how much money is on either side of the equation is not clear at this point, and will be heavily influenced by weather conditions. PJM's own estimates are that increased operational costs would be in the range of $3 billion to $4 billion, while the savings produced by better reliability would be about $2 billion. The difference would be passed on to consumers.

Paula DuPont-Kidd, a spokeswoman for PJM, said that the proposal "will work like an insurance policy. For a small additional cost, consumers will have greater protection from power interruptions and price spikes."

A public comment period will run in advance of any FERC decision on this plan. PJM is not seeking a ruling until April.

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