By Clara Summers, Campaign Manager
Consumers for a Better Grid (a project of CUB)
The nation’s largest power grid operator says it’s “fuel neutral” when considering energy resources, so why does PJM Interconnection appear to be showing so much love for dirty gas at the expense of wind and solar projects?
As we’ve detailed elsewhere, PJM has gotten us into a mess. High capacity prices, which the grid operator calls a success, will hit consumers in June. Yet we won’t see any benefit, as we won’t be able to get new generation online for years because of the interconnection queue backlog.
All of these issues were foreseeable and preventable, and there are some basic fixes that PJM could pursue to help clean up this mess. The most basic (and we can’t believe we have to say this), is for PJM to comply with FERC Order 2023. This is a federal rule to improve and speed the process of connecting to the grid. That Order came out last year, but PJM is still asking for exceptions to the rule, so it can continue taking longer than every other grid operator to get new generation online.
So while PJM has been talking out of one side of its mouth saying that it’s concerned about not getting new resources online, out of the other side it is arguing for special treatment to slow-walk interconnection. What gives?
Instead of complying with Order 2023, PJM has unveiled a special, “one-time” fast-track interconnection process, called the Reliability Resource Initiative, that bypasses the existing interconnection queue. PJM’s proposal would let new resources cut in line and be considered along with projects that have already been waiting—for years—for PJM to get around to studying their connection to the grid.
Make no mistake: The RRI proposal is more about picking and choosing resource types than it is about getting new resources online quickly. The grid operator has recently made multiple public statements favoring gas: “lt has become very clear that our region will require the buildout of a significant quantity of new generation, including a material amount of natural gas…” PJM said in a recent letter responding to consumer advocates concerned about the price spike.
There are many, many megawatts of mostly wind and solar generation waiting to connect in PJM. Other grid regions, like SPP and MISO (see map), manage much larger amounts of wind and solar and are now reaping the reliability benefits. But PJM has balked at the clean energy transition, citing concern at the “operating characteristics” of such resources. This behavior is extremely confusing, given that PJM’s own analysis has said that it could manage a grid that was over 90% carbon-free. In some versions of the RRI proposal, PJM has explicitly (and inappropriately) excluded wind and solar.
Bringing more resources online will help bring prices down. The best way to do that would be to fully implement Order 2023 and fix the remaining problems with the interconnection process as a whole.
If PJM pursues something like the RRI, it needs to adhere to the following key principles:
Principle 1: Show us your work
PJM says we need new generation, but it is vague about how much, and whether its concern is for resource adequacy or operations. Resource adequacy is how much generation is available to the electric system, whereas operations is how the system needs to be managed based on the type of generation available. PJM will identify “~75 projects” for the RRI, but it should instead set a number of megawatts needed beyond the existing queue and process RRI projects until the need is filled.
Principle 2: Resource neutrality–in principle and in practice
All resources, or projects with a combination of resources, that can provide capacity by June 1, 2029 must be allowed. This must not be a fast-track for only specific resources like gas, in policy or in practice. One way to help ensure this is to allow states with laws about the resource mix–like our own Climate and Equitable Jobs Act (CEJA) in Illinois–to identify, approve, or deny RRI projects.
Principle 3: Developers must commit to building and providing capacity by a date certain
PJM is pursuing this because it says we need resources to be in service and providing capacity by June 1, 2029. This means that there should be no wiggle room in construction timelines for RRI projects. Everything needs to be in operation by June 2029–no exceptions. In addition, the resource will need to participate in the 2029/2030 capacity auction, so they can meet the stated need. Timeline to construction should be heavily weighted as PJM chooses projects for RRI.
Principle 4: Cost needs to be a determining factor in project selection
In the regular capacity market, the resources that are lowest-cost get chosen first, and then progressively more expensive resources are chosen until meeting the capacity need. Any RRI projects need to be chosen the same way–with preference for the lowest-cost projects.
Principle 5: The RRI must not undermine the existing interconnection queue process
The RRI should not in any way delay or increase costs for resources that have been waiting in the queue. This means that existing resources in the queue must be processed on the same timeline as already required–without any further delays. There also needs to be a mechanism to prevent RRI resources from taking up valuable “headroom,” or grid access, that would have otherwise gone to those waiting in line. If RRI resources cause a need for greater network upgrades, or grid improvement costs, for queued resources, then the RRI resources should be responsible for paying those costs.
Principle 6: Let renewables pair with batteries
Pairing renewables with batteries can provide clean energy during more hours, but PJM’s rules create extreme and arbitrary barriers to this common-sense solution. For example, under today’s rules, a wind facility in PJM can install a battery without waiting for years for studies, but a solar facility can’t. And a battery can add a solar unit, but a solar unit can’t add a battery. PJM also assumes, against all common sense, that batteries will choose to charge when electricity is most expensive. If PJM wants to make its system more reliable quickly, abandoning illogical rules that prevent energy storage from coming online has to be part of the solution.
Principle 7: Stop fighting Order 2023
Nuf said.
We shouldn’t be in this mess in the first place. PJM should not push slapdash solutions that set the clean energy transition back. CUB will continue fiercely advocating to lower prices by getting new, clean energy online.
About the Author:
Clara Summers joined CUB in 2023. She heads the Consumers for a Better Grid (formerly CLEAR RTO) campaign, which advocates for a cleaner, more affordable power grid for the 65 million people served by PJM, the nation’s largest grid manager. Clara is based in the greater DC area. When not deep in the weeds of energy policy, she enjoys Irish dance, hammered dulcimer, and anything to do with koalas.
