A recent attempt by power plant owners to engineer a bailout of PJM Interconnection — a behind-the-scenes organization that runs our power grid — didn’t gain big headlines. But it exposes a dirty little secret about fossil fuels that has a major impact on our electric bills.
Too often, dirty power generators can’t perform when customers need them most, and their recent actions at PJM (which ultimately failed) proves they know it.
PJM, which serves ComEd customers and about 60 million others in a dozen states, is the nation’s largest power grid operator. On May 11, members of PJM, among the
m operators of coal and natural gas power plants, narrowly voted to recommend reducing, by as much as 90%, the fines they must pay if they can’t operate in future emergencies — despite being paid to be on standby.
At the time, fossil fuel plants were raising a stink about being fined $1.8 billion by PJM for underperformance during the multi-state winter storm Elliott last December. PJM narrowly avoided having to implement rolling blackouts as nearly 46 gigawatts of plants — about enough to power California — went down in that terrible holiday storm. The grid operator was forced to ask everyday consumers to conserve electricity on Christmas Eve.
Fossil fuel operators like to brag about their reliability, but about 90% of those outages were at gas or coal plants. Similarly, failing gas plants were the biggest problem in the deadly Texas outages of 2021.
At PJM this spring, fossil fuel generators tried to engineer a rules change to let themselves off the hook, should they not be able to meet their reliability promises. That shows how worried they are that fossil fuel power plants are not reliable enough. Fortunately, the PJM board of managers did the right thing and rejected the proposal.
Illinois, thanks to strong policies such as the Climate and Equitable Jobs Act (CEJA), had a surplus of carbon-free electricity, so we were never at risk of outages during Elliott. But we still pay too high a price on our electric bills to have the threat of a holiday grid meltdown hanging over us.
This isn’t supposed to happen. PJM runs a special “capacity auction” to ensure that when demand skyrockets, such as in a winter storm or a summer heat wave, generators are ready to step in and supply extra power. These auctions determine how much we pay these generators, through fees embedded in electricity prices.
But the way PJM determines those fees isn’t consumer-friendly, and for years the Citizens Utility Board has protested that we pay way too much. Roughly 20% of what we pay for electricity supply goes to paying for this reserve power, and one analysis estimated we pay $4 billion more than we should for electricity because of inflated capacity prices.
So remind me again why we’re paying so much to fossil fuel generators if they can’t perform just when we need them most? Reeling from the winter storm, PJM delayed the next capacity auction to propose reforms, but we fear their answer will be to double down on the gas and coal plants that caused the reliability problems in the first place. Indeed, PJM came out with a flawed report predicting future power shortages that the fossil fuel industry is using to argue for propping up their members’ expensive and underperforming plants.
During Elliott, renewables and nuclear lived up to their commitment, and wind turbines actually over-performed in the storm. And there are similarly reliable resources waiting in line. In fact, developers already have enough proposed wind, solar and battery storage projects (290 gigawatts) to power the entire PJM region. Unfortunately, these projects wait so long for final approval in PJM’s “interconnection queue” that most are in danger of never getting built. Fossil fuels will continue to brag (falsely) about reliability while they try to dodge fines.
But the fact is they often can’t perform, and bailing them out certainly won’t fix that. The real fix lies in fast-tracking clean resources — because they actually perform.
Sarah Moskowitz is the deputy director of the Citizens Utility Board of Illinois.
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