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Economy and Business

An electricity grid manager develops plans for winter months
PJM Interconnection wants to create incentives and penalties for generators to make sure that they produce what they say they will

Andy Chow
In The Region:
Right now, the cold winter months might be the last thing on your mind. But as Statehouse correspondent Andy Chow reports, an electricity grid manager is working on plans to head off trouble when temperatures drop.
LISTEN: PJM Interconnection plans for potentially rough winter

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LISTEN: Abbreviated version

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The bitter cold from this past winter put several Midwestern and Eastern states and their power companies in a tough position.

“Some generators had difficulty being able to startup or to continue to run or to even get their supply of fuel because of the extreme temperatures.”

That’s Paula DuPont-Kidd with PJM Interconnection, which manages the high-voltage electricity grid that brings power to Ohio, 12 other states, and the District of Columbia. PJM also operates a competitive wholesale electricity market.

DuPont-Kidd says the grid experienced a generation outage rate of 22%. This means a portion of the power that was planned to run on the grid didn’t—forcing PJM to pull from other sources.

“So that kind of got us to thinking that we really need to do something within our market that will create incentives or penalties to generators to make sure that they show up that they’re able to run what they said they would.”

This kind of outage rate can put the grid’s reliability in jeopardy. Dupont-Kidd says new policies to improve performance can also help avoid the potential for blackouts.

PJM has submitted a proposal for consideration by its stakeholders. DuPont-Kidd stresses that this is only a proposal at this point. If the group approves the proposal to implement incentives and penalties—then it would go on to the Federal Energy Regulatory Commission also known as FERC.

Dupont-Kidd says there are a variety of incidents that happened last winter that PJM wants to avoid—for example, there were plants that had trouble starting up because of the extreme cold.

“And yet in other instances it was a matter of the fuel supply that’s needed to run some of the plants for instance natural gas where there was not a firm contract by the generator with the natural gas industry to get the supply in time.”

She emphasizes that the issue doesn’t just lie with natural gas but also said there were problems with coal-, oil-, and diesel-fired plants.

PJM’s new policy proposal doesn’t spell out exactly what power companies must do in order to perform better during harsh conditions—but it would incentivize reliability.

“So no we’re not telling we’re not prescribing to people what they need to do to make sure that they can because it’s going to vary by the type of plant that they are and the owners of those plants know best what they need to do in order to ensure that.”

The Public Utilities Commission of Ohio is reviewing PJM’s proposal and plans to provide feedback during next month’s stakeholders meeting. The PUCO says if the proposal is approved, it could go to the Federal Energy Regulatory Commission by November.

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