PJM CEO: PJM continues focus on reliability, fair markets, infrastructure planning

Boston noted that PJM has experienced such recent extreme weather events as Hurricane Sandy and last winter’s polar vortex

With 21% of the nation’s GDP being within PJM Interconnection’s footprint, “PJM takes its responsibility to maintaining the reliability of the grid very important” PJM President and CEO Terry Boston said on Feb. 5 at the National Association of State Energy Officials (NASEO) Energy Policy Outlook Conference in Washington, D.C.

PJM focuses on three things: reliability, fair and efficient markets and infrastructure planning. On reliability, for instance, he added, “If the lights aren’t on, nothing else we do matters.”

Reliability, Boston said, is driven by PJM’s planning and markets.

He further noted that PJM is seeing extreme weather events as well as low load growth, which is primarily driven by efficiency. “We’ve had three one-in-100-years events in PJM in the last four years,” he said, noting that the 2014 polar vortex is not one of them.

For instance, he noted that in 2011, the temperature in Atlantic City, N.J., reached 108 degrees, while in 2012, the region experienced a derecho. According to the National Oceanic and Atmospheric Administration (NOAA), on June 29, 2012, an intense, long-lived line of thunderstorms raced eastward at nearly 60 mph from the Midwest to the mid-Atlantic coast, causing massive power outages in major urban areas along the storm’s path. Meteorologists use the term “derecho” to describe this special type of violent and long-lived windstorm, NOAA added.

Other recent extreme weather events that PJM has experienced include Hurricane Sandy and last winter’s polar vortex, he said.

Of the polar vortex, for instance, Boston said that it “was a real lesson learned for PJM,” and that “we were able to meet the loads, but it was too close.”

The loads were above a typical January day by about 35,000 MW, he said, adding, “We had about 9,300 MW could not get gas at any price, and we had about 9,700 MW that couldn’t start on fuel oil because the fuel oil was a lot like Jell-O” due to it being exposed to the cold.

Discussing generation changes, Boston noted that, “we’re going from coal to natural gas very quickly, and the interoperability of the gas and electric system is becoming very, very important.”

There are about 26,000 MW of coal that have already been announced to retire, with some already retired or set to retire by next May, he said.

Of the increase of natural gas in the generation mix, he noted that, “this May will be the first time in PJM’s history that gas will be the dominant fuel type.”

Boston said that through history, there has been myopic focus when it comes to fuel sources, adding: “The ‘40s [were] all about hydro, the ‘50s and ‘60s [were] all about coal, the ‘70s were all about nuclear, the ‘80s [were] about building nothing because the economy went to heck …, the ‘90s [were about] gas [and the 2000s were about] wind. We’re back to natural gas again. So, we have a balanced portfolio, we just got it a decade at a time.”

Wind energy, for instance, is driven by the states’ energy portfolios, much more than the production tax credit “because if you say you [have] to have this much wind as a percent of your mix, it will drive the wind on your system.”

He continued, “We have 6,500 MW of wind in PJM and … we have plenty in our … queue to meet your portfolio standards going forward, but if you like wind, you [have] to love storage.”

Among other things, he noted that when it comes to moving power over long distances, Thomas Edison was right in that HVDC is the right answer, adding that siting an 800-mile, for instance, transmission line on the East Coast is “very hard.”

He continued, “We’re missing an opportunity in terms of integration of the grid by not having the HVDC [as in the] rest of the world.”

Boston also noted PJM’s efforts with electric vehicles.

As TransmissionHub reported, for instance, in April 2013, the University of Delaware and NRG Energy (NYSE:NRG) entered the balancing market with a fleet of all-electric Mini-E vehicles – as a revenue-earning resource. According to an April 26, 2013 statement from Delaware Gov. Jack Markell, the university and NRG began work in September 2011 to move from research results to prepare to commercialize the technology, which provides a two-way interface between EVs and the power grid that enables vehicle owners to sell electricity back to the grid while they are charging their EVs.

In February 2013, the project took a big step forward when it became an official participant in PJM’s frequency regulation market. Frequency regulation is used to balance supply and demand on the grid second-by-second, the statement added. Since then, the project has been selling power services from a fleet of EVs to PJM.

Boston said, “We can convert transportation – it’s really hard right now because the SUVs and pickup trucks are going off the lot – but we can drive and reduce our carbon footprint substantially by the electrification of transportation going forward.”

About Corina Rivera-Linares 3059 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.