PJM stakeholders address winter storm report; seek better power-gas market coordination

PJM Interconnection stakeholders told the grid operator July 24 that they would like additional information regarding efforts to improve electric-natural gas market coordination, more could be done regarding public appeals for power demand curtailment and questions around demand response remain in the wake of the December winter storm that stressed PJM's power system.

"There are a handful of reasons why we do this report and one is to centralize information regarding actions and events, in this case for Winter Storm Elliott," Adam Keech, PJM's vice president of market design and economics, said during a Winter Storm Elliott Report Workshop that was held in person and remotely.

The 136-page report, published on July 17, offered an in-depth look at how the Mid-Atlantic grid operator responded to precipitous drops in temperatures across its 13-state footprint over the Christmas holiday weekend. PJM's report also included 30 separate recommendations to help bolster grid reliability during future extreme winter weather events.

"This is our process to do a deep dive of an event and share what we find with stakeholders," Keech said.

There is open litigation on penalty outcomes for power generators who did not perform as required by PJM's rules that could not be discussed as part of the workshop, he said.

One stakeholder said it was "surprising" that there is nothing in the report about better electric-gas market coordination because the report was clear that lack of fuel was the single biggest constraint on energy delivery.

Electric-gas market coordination

"As with other resource types, outages on gas units were primarily attributed to physical plant issues (freezing and plant equipment issues), but gas generators also experienced a significant level of gas supply issues," according to the report.

The gas supply-related outages accounted for just over 11 GW (approximately 13% of total gas generation capacity) at the peak hour on Dec. 24, the report said.

"From a top-level perspective, the report's findings don't change the picture," Tom Rutigliano, senior advocate for the Sustainable FERC Project within the Natural Resource Defense Council's Climate & Clean Energy Program, said in a phone call.

"Poor maintenance, particularly for gas generators, was the overwhelming problem," he said, adding that gas-electric coordination is important and there "needs to be some changes."

"Gas suppliers aren't stepping up to meet the needs of the power grid — the ways they schedule gas aren't responsive or flexible enough during emergencies," Rutigliano said.

PJM's report offered the following recommendations for addressing challenges with differences in electric and gas days:

• Evaluate multi-day commitment processes to provide greater certainty of fuel supply during critical operating periods with a focus on weekends
• Work with states to discuss opportunities to increase prioritization of gas for usage in electric power production
• Evaluate including fuel-specific information in the capacity accreditation model (dual fuel, firm/non-firm gas, onsite fuel requirements etc.)

The grid operator also currently has an Electric-Gas Coordination Senior Task Force discussing these and other concerns.

Another stakeholder said PJM could do more regarding public appeals to reduce power consumption during emergencies.

"You should give some deep thought to appeal-to-public and how you go about it," the stakeholder said, adding that it is a "very powerful mechanism" if used effectively and here it was "not very well thought out."

Additionally, demand response resources that get paid to reduce energy consumption when called upon to help reduce stress on the grid did not perform was well as expected, PJM said.

One stakeholder suggested that could be because many DR resources in PJM are manufacturing load that was not operating due to the Christmas holiday and thus could not cut power usage.

"We still have questions about why DR providers said they could curtail more than they did," Joe Bowring, PJM's independent market monitor, said. Let us evaluate what happened and use that information to move forward, he said.

The grid operator's current efforts to overhaul its capacity market add another layer of complexity to addressing winter storm lesson learned because many capacity market considerations overlap with other areas of the market.

"PJM is in the middle of a significant capacity market conversation and a lot of the issues are inter-related," Glen Thomas, president of PJM Power Providers Group, or P3, said in a phone call.

"The capacity market, from a generator perspective, is not generating a lot of revenue and has a lot of risk. The $1 billion in penalties [from the storm] is a lot of risk when capacity prices are clearing at $28/MW-day and that is what we are hoping gets fixed by the end of the year," Thomas said.