Unreliable Gas Plants Are to Blame for December’s Power Crisis
By Patrick McDonnell, PennFuture President and CEO
On February 27, a Pennsylvania State Senate committee will hold a session reviewing what happened during Winter Storm Elliot. The session shouldn’t focus on the extreme freezing temperatures of December 2022. Lawmakers should focus their attention on how the electric grid—and particularly the state’s fracked gas power plants—failed to deliver during a time when they were needed most.
The Christmas holiday winter storm was the latest showcase into how unreliable our grid has become. PJM Interconnection LLC—the regional grid operator for Pennsylvania—issued a Cold Weather Alert to notify power generators that their electricity would be needed during the upcoming holiday weekend’s surge in demand. PJM pays power generators billions of dollars every year to reserve their availability.
To PJM’s credit, the grid operator recognized the challenges extreme cold would bring. It went into the holiday weekend with much higher reserves than would normally be necessary.
Unfortunately, the record high reserves and the alert to Pennsylvania’s power plants weren’t enough. Many of the power plants PJM was counting on ended up not running. These “forced outages” aren’t necessarily surprising—under normal weather conditions, plants fail to run about 5 percent of the times they are called. Power plants run large, complicated machines and, during extreme weather, the forced outage rate can be as much as 10 percent.
During Winter Storm Elliot, the grid suffered forced outages more than twice the normal rate. More than 20 percent of the grid’s entire capacity went offline. Worse yet, in 92 percent of cases, PJM received less than an hour notice — or no notice at all. Pennsylvania was close to blackouts if not for PJM making emergency decisions, including importing electricity from neighboring power grids. Most disconcerting, homeowners were asked to voluntarily reduce their energy usage over Christmas to ensure their lights could stay on.
As a result of this crisis, energy prices soared to record highs. During the storm, wholesale electricity prices shot up to a staggering $4,300 per MWh, compared to less than $50 per MWh under normal conditions. For consumers paying market rates for electricity plans, the cost may be severe. But even consumers on fixed-rate plans—which most residential customers are—may end up feeling the effects.
PJM is expected to issue a detailed report in mid-April. Preliminary data shows the main culprit was the unreliability of fracked gas plants. Pennsylvania’s gas plants had a forced outage rate of 37 percent and were responsible for 70 percent of all outages. Plant operators didn’t have the supply of gas they needed and waited far too long to tell anyone they couldn’t run. Many plants held gas contracts that didn’t provide them with a guaranteed supply, while others dealt with supply cuts because local gas utilities receive priority to heat homes.
The fracked gas industry will claim that the solution is more fracking and more pipelines. That makes no sense at all. In addition to the obvious environmental and public health consequences of fracking, the economics just don’t work. We would need to spend billions of dollars to over-build vast amounts of infrastructure to guard against relatively rare shortages, causing an unsustainable glut in the gas market and consumers paying the hefty price.
We can’t keep using the same status quo solutions and put all our eggs in one energy source basket. Over 50 percent of Pennsylvania’s energy mix is derived from fracked gas, a proportion that the industry wants to grow. Diversifying our generation—particularly away from resource-constrained fossil fuels and towards clean, renewable energy—will protect consumers against supply chain risks, mechanical failures, and poorly managed power plants with bad contracts. By combining this with highly cost-effective investments in energy efficiency, a modernized grid could mitigate peak demand in times of crisis.
Without policymakers profoundly rethinking our energy policies, the Commonwealth’s ratepayers and businesses will remain hitched to an unfair, costly, and unsustainable energy system. Taxpayers prop up the growing share of fracked gas through subsidies and lax regulations. The industry inevitably will pass on the cost of their failures and fines to consumers as higher electricity prices. Businesses and ratepayers are taking on a steep price for fracked gas to unreliably provide Pennsylvania’s energy.
As state policymakers wrestle with their agenda for the new legislative session, reforming our energy policies should be at the top of the list. Continuing to center our energy strategy around unsustainable fracked gas does more than hit our pocketbooks. It will literally leave us out in the cold.