The Federal Energy Regulatory Commission (FERC) has approved PJM Interconnection's proposal to expedite the development of new power plants. Erie New Now spoke with United's Jon Gordon who explained that this new approach favors fossil fuels over clean energy solutions and does not address the root of the issue, which is a faulty interconnection process.
WHAT HAPPENED:
PJM— the organization that operates the electric grid for 13 states in the north/mid east— asked the federal government if they could change how they approve electric generation projects coming online. They filed these requests in December.
On Tuesday, the Federal Energy Regulatory Commission (FERC) approved the changes.
THE PROBLEM:
New data centers for artificial intelligence, increased electrification of society at large— these and more are expected to suck up huge amounts of electricity.
As the demand for electricity increases at a more rapid rate than expected; In the PJM grid area, there is not enough energy to meet the expected demand coming in the next few years. The organization says it could experience shortfalls as soon as 2026.
Energy shortages have already impacted markets. Because of an energy auction in summer of 2024— Pennsylvanians are expected to get rate hikes in their electricity bills starting in June, 2025. One utility company estimates residents will see an average increase of $15 a month on their electric bill.
WHY THE SHORTFALL:
The expansion of energy portfolios to include alternative energy sources has faced challenges in the PJM Grid area.
For decades, geothermal power plants like coal, natural gas, and nuclear have made up most of the grid’s energy portfolio. The organization, who must approve most projects that connect to the grid, would get a few project requests a year. This was called the interconnection queue. PJM would take a year or two to study the project (which was often large in scale) before approving.
In the past 20 years, alternative energy project requests started coming in. PJM would still spend a year studying the (often smaller) projects. As alternative energy gained popularity, more and more projects poured into the interconnection queue.
Right now, over 95% of the PJM queue is alternative energy projects. There are over 550 projects being studied right now.
In the past 7 years, the slow approval process of PJM, combined with the pandemic, global supply chain issues, and funding challenges for these alternative energy projects— has lead to only about 5% of alternative energy projects approved by PJM actually getting built.
Now, while the alternative energy sources have trickled in; political, social, and economic pressures are forcing traditional geothermal energy sources out of play. A large amount of coal and natural gas plants are expected to shut down (or ‘retire’) by 2030.
To complicate matters more— energy sources have a ‘reliability’ measurement. Geo-thermals are measured as high reliability. Alternative energies, like solar and wind, need more projects to offer the same amount of reliability.
So electricity demand is increasing faster than expected, a bunch of reliable energy sources are retiring, and there is not enough new energy sources coming online to replace the retiring sources.
PJM’s PROPOSED SOLUTION
PJM filed two requests with FERC in December. These requests made updates to the interconnection queue process. For example, projects that don’t require changes to the grid can get approved quicker. This means battery storage projects (which can help increase the reliability of solar and wind projects as they store energy for later use) will have an easier time getting approved.
The most controversial request was a plan to fast track projects with higher reliability measurements. The projects still have to go through the whole queue process, but it will put the projects— which are mostly natural gas power plant requests— to the front of the line.
“This one-time initiative should provide a much-needed on-ramp to the reliability of the PJM system in the short term as we continue to move existing queued projects through our transition cycles,” said Chris O’Hara, Sr. Vice President and General Counsel. “We now hope to see suppliers take advantage of this unique opportunity.”
Clean energy advocates expressed doubts that natural gas plants, even if fast tracked in the queue, could be done in time to fill reliability needs. Jon Gordon, a policy director at Advanced Energy United, said the crisis could have been avoided all together if PJM had adapted to alternative energy project requests sooner.
The fast tracking for natural gas emphasized what could have been.
“It's very frustrating because as a clean energy advocate, you know, fighting this issue for many years, and knowing all those resources were there,” Gordon said, “They always cited the rules and the regulations. 'We can't do this.' 'We can't do that.' But they didn't hesitate to sort of take this bold action for the natural gas plants.”
POLITICAL, SOCIETAL, ECONOMIC PRESSURES
While PJM’s approved requests invites natural gas expansion— other hurdles still exist. Some of the state’s in the PJM area are part of the Regional Greenhouse Gas Initiative (RGGI), which taxes power plants for producing carbon. This has deterred natural gas projects in these states.
Pennsylvania joined RGGI by executive order in 2019. The order was immediately blocked in court by lawsuits— and the case is still waiting to be heard in the Supreme Court. Governor Josh Shapiro has proposed a state specific carbon-cap program.
Industry advocates like the PA Chamber say the threat of carbon-cap taxes keep natural gas plants away.
While new natural gas projects have not started in the state, existing plants continue to increase gas production while the natural gas industry across the U.S. is decreasing carbon emissions.
Staunch environmentalists remain opposed to natural gas for carbon and fracking concerns.
Meanwhile, in his first few days in office, President Donald Trump revamped the use of liquid natural gas. In Pennsylvania, natural gas generates 60% of the state’s electricity. As the 2nd top energy exporter in the nation, the commonwealth’s abundance of energy also ties it to international markets.
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