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PJM Interconnection seeks delay in power plant closings

By: Jonathan N. Crawford and Naureen S. Malik |

The manager of the nation’s largest electric grid wants to keep some power plants running beyond their scheduled end dates to ensure reliability next winter.

PJM Interconnection L.L.C. of Valley Forge plans to ask the Obama administration to let it pay plant owners to keep generating at least 2,000 megawatts through next winter, when demand for electricity soars, according to a filing with the Federal Energy Regulatory Commission on Wednesday. The companies planned to shutter the plants before a government rule limiting mercury emissions goes into force in the first half of 2015.

“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,” Ray Dotter, spokesman for PJM, wrote via e-mail Monday. “PJM is checking with generation owners to see if any retirements can be delayed.”

The proposal comes as coal plants shut faster than they can be replaced with natural-gas-fired generators. The PJM grid, which serves 61 million people across 13 states and the District of Columbia, has also been adjusting market rules to boost power reserves. The concern is greatest in winter, when demand for home heating limits natural gas supplies and boosts electricity consumption.

PJM had secured 15.6 percent of excess supply for the year starting in June in a capacity auction held in 2012, “but recent developments have raised concerns about those resource commitments,” PJM said in a letter to the Federal Energy Regulatory Commission Wednesday.

PJM said it expected plant retirements this year to take a “historic” 11,769 megawatts of generating power offline. By contrast, only 3,800 megawatts of generating power would be added. The grid may also lose the ability to compensate and retain more than 11,000 megawatts of demand resources, in which consumers cut consumption during peak periods, because of litigation, it said in the letter.

“I think the fact they are concerned about reliability and looking at delaying plant retirements does validate what companies . . . have been saying” about the impacts the EPA’s mercury rule could have on the system, Melissa McHenry, a spokeswoman for American Electric Power Co. Inc., said.

PJM took emergency measures to keep the system running last winter, when 40,000 megawatts, or 22 percent of the capacity on the system, wasn’t available during a spike in demand caused by severe cold weather.

Read more at http://www.philly.com/philly/business/20141225_PJM_Interconnection_seeks_delay_in_power_plant_closings.html#dh3YRgPfW7sgRVb3.99