PJM, the largest grid operator in the United States, is making changes to its transmission planning process. This comes after facing criticism for its traditional approach to planning, which has been seen as short-sighted and lacking consideration for alternative options and the policy goals of PJM states. Clean energy advocates and some state regulators are advocating for a more holistic and forward-looking approach that takes into account decarbonization targets set by states like Illinois, Delaware, Maryland, Michigan, Virginia, and New Jersey.
Anjali Patel, a consultant for Americans for a Clean Energy Grid, emphasizes the need for proactive planning, especially within PJM. She believes that past transmission planning has neglected to consider economic needs, reliability needs, and state interests as interconnected factors. Patel argues that transmission investments can last for decades, making it essential to take a more comprehensive and long-term approach to planning.
However, there are concerns that the development of the new planning framework could hinder states’ goals and waste valuable time. Tom Rutigliano, a senior advocate for climate and energy at the Natural Resources Defense Council, claims that PJM has made concessions to appease fossil fuel states, leading to a potential backslide in progress.
It is important to note that the proposed changes have not been finalized and could be influenced by a pending Federal Energy Regulatory Commission rule on transmission planning and cost allocation, according to PJM spokesman Jeff Shields.
The importance of planning is highlighted in a letter from the Organization of PJM States, which expresses concerns about the region’s reactive stance amid a shifting electric power industry. The group emphasizes the need for PJM’s planning tools to evolve to address grid reliability issues caused by aging infrastructure, retiring fossil fuel plants, and increasing power demand.
A case study in Maryland exemplifies the potential pitfalls of inadequate planning. The state’s Office of People’s Counsel and Public Service Commission filed complaints against PJM to the Federal Energy Regulatory Commission regarding urgent transmission projects approved to address electric reliability issues caused by the retirement of a coal plant. These complaints argue that PJM should have anticipated the plant’s retirement and considered alternative solutions. They claim that Maryland ratepayers will incur substantial costs for transmission upgrades and a “must run” agreement to keep the coal plant operational until the projects are completed.
PJM rejects these arguments, stating that there is no technology other than transmission that can address the reliability problems caused by the retiring coal plant. FERC Commissioner Allison Clements raises concerns about PJM’s grid planning based on the objections raised by Maryland’s authorities.
Advocates for a more inclusive planning process argue that PJM should work collaboratively with states and utilities to develop solutions that align with state policy goals and consider more cost-effective options. They point to the Midcontinent Independent System Operator (MISO) as a model for long-term planning that supports utility and state future resource plans while ensuring low-cost power and high reliability. However, PJM lacks the authority to develop or impose cost allocation schemes, which can be a significant point of contention in transmission planning and construction.
PJM’s proposed tiered approach, which considers different scenarios for transmission planning, has also raised concerns. Critics worry that focusing solely on reliability and certain state public policy goals could lead to duplicative transmission infrastructure and neglect the potential for renewable power generation to replace retiring fossil fuel plants. Disagreements over cost allocation further complicate the planning process, particularly when states have differing policy goals.
Despite these challenges, there is cautious optimism among experts that PJM’s efforts can move in the right direction. They emphasize the importance of incorporating state policies into PJM planning, as these policies reflect the interests of utilities and businesses operating within PJM and have implications for the economy as a whole.
