Managing the Energy Transition

What's it all about? The clean energy transition is upon us–cleaner, cheaper resources like wind, solar, and batteries are the future. But PJM is still stuck living in the past and has hampered the transition. We are on constant watch to make sure power grid operators get with the program and employ rules that treat clean energy sources fairly.

  1. Interconnection queue reform: Developers have proposed enough 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. The Federal Energy Regulatory Commission (FERC) has laid out new standards–Order 2023–for interconnection processing. PJM has been foot-dragging on compliance, asking for exceptions to a number of these standards, including realistic treatment of battery storage, a technology that could be a huge help in easing these serious grid problems. PJM needs to comply with the rule and process the backlog, and fast.

  2. Surplus Interconnection Service: Surplus interconnection allows multiple resources to use the same interconnection point and fill in when another resource isn’t performing. For example, a gas plant could share a connection with a battery, which means the gas plant could run less while the battery provides capacity. PJM recently sent a proposal for surplus to FERC–let’s hope it gets approved!

  3. The gas fast-track: The nation’s largest power grid operator says it’s “fuel neutral” when considering energy resources, but PJM policies tend to favor dirty gas at the expense of wind and solar projects. For example, instead of fully complying with FERC Order 2023, a federal rule to improve and speed the process of connecting to the grid, PJM has unveiled a special, “one-time” fast-track interconnection process, called the Reliability Resource Initiative, that would bypass the existing interconnection queue. PJM’s proposal would let new resources–including dirty gas plants–cut in line and be considered along with projects that have already been waiting—for years—for PJM to connect them to the grid.

  4. The battle against an anti-consumer proposal called “MOPR”: In 2020, fossil fuel interests at PJM proposed the Minimum Offer Price Rule, MOPR (pronounced MOE-pur), changes to the "capacity market rules" that would have discriminated against clean energy resources. The capacity market is how PJM determines the price for reserve (a.k.a. capacity) power. These payments go to electricity generators in return for the promise that they will have enough power on hand when demand is highest--think a hot summer afternoon, when everyone is cranking up air conditioners and power plants are working hardest. Customers pay these prices through their electricity supply charge on their power bills. If the MOPR had been implemented, clean energy resources such as wind and solar would have been artificially priced out of participation in the PJM capacity market.

Why should consumers care? CUB believes that clean energy is the most affordable energy--the market price of wind and solar have been dropping significantly in recent years, and those resources also avoid the expensive societal costs (health problems, volatile weather, for example) caused by fossil fuels making climate change worse. Unfortunately, under proposals like the gas fast track and the MOPR, customers would be on the hook for higher electric bills to support dirty energy and slow the transition to clean resources. Fortunately, the MOPR changes were shot down. But the gas fast track is still alive. It is vital that we maintain vigilance because fossil fuel interests are constantly working to engineer rule changes that favor them.

Resources