PJM Adopts Temporary Manual Changes To Address Global Fuel Supply Issues

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Based on recent global fuel availability challenges heading into winter, at its Markets and Reliability Committee meeting Wednesday, PJM reiterated concerns for potential fuel supply issues if the region were to experience an extreme winter.

At the committee meeting, members subsequently endorsed temporary changes to the rules governing minimum fuel requirements during emergency operations, starting Oct. 21.

PJM’s Senior Vice President of Operations Michael Bryson on Wednesday introduced the concerns that precipitated the changes.  Chris Pilong, Director – Operations Planning, detailed the proposed temporary changes, which would be in effect through April 1, 2022. The amendments to Emergency Operations procedures in Manual 13 are aimed at adding reliability tools in the event of any potential fuel-supply shortages or extreme winter weather experienced by electricity generators in the PJM footprint, they said.

“Our top priority at PJM is ensuring a reliable electric grid,” Bryson told Inside Lines. “We are especially concerned about coal supply chain issues and inventory levels heading into the winter, so we are taking action designed to give PJM and generator owners more flexibility and additional tools to manage their inventories, so they can be available when they are needed for reliability.”

The proposed temporary Manual 13 changes state that PJM may request a generation owner to move steam units (generally coal fired) into the Maximum Emergency category if the resource’s remaining run time falls below 240 hours (10 days), meaning the units could be restricted from operating during the time unless required to meet reliability needs.

The previous run-hour threshold for Maximum Emergency was 32 hours. The units in question could remain in Maximum Emergency status until their fuel inventory rose above 21 days (504 hours). This would only be implemented to address concerns with local or regional reliability as a result of fuel supply shortages.

“We are proposing these changes to be flexible in the face of any issues that may arise outside of our control,” Bryson added. “While the potential for fuel shortages and supply chain limitations exist throughout the world, we need to stay as prepared as possible, and this is a powerful tool to help maintain fuel supplies.”

Some stakeholders at Wednesday’s meeting raised concerns that the change could impact current market incentives or potentially unfairly exempt affected generators from performance requirements and penalties. Pilong said Capacity Performance requirements would still be applicable, and PJM committed to document operational procedures related to the issues raised for subsequent discussion at the Operating Committee. PJM will work with stakeholders to address opportunity costs as part of a long-term solution, if needed.

“We have these short-term concerns that are facing us, and we have to make sure we are taking care of it,” Pilong told stakeholders. “We are committed long term to changing market mechanisms and making sure that performance and nonperformance is consistently and correctly assessed.”

The temporary manual changes are in addition to PJM’s regular winter preparations and among the numerous additional measures PJM undertook this year arising out of lessons learned from the extreme weather and resulting blackouts in Texas in February.

In addition to pre-winter data requests from generators regarding fuel inventory, fuel supply and fuel delivery characteristics, PJM annually gathers information from generators on emissions limitations and minimum operating temperatures. Given low coal and oil stockpiles and supply chain issues across the country, PJM has begun collecting fuel inventory data weekly and will continue these data requests for coal and oil on a weekly basis through the winter to provide a clearer picture of fuel availability.