Reliability Is Job No. 1, PJM CEO Tells Senate Committee

PJM President & CEO Manu Asthana Testifies on Grid Reliability, Resiliency, Affordability

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PJM Interconnection President and CEO Manu Asthana testified March 11 before the U.S. Senate Committee on Energy & Natural Resources on the reliability, resiliency and affordability of the nation’s electric service amid a changing energy mix and extreme weather events.

“Reliability and security of the bulk power grid is our first priority and our organization’s driving purpose,” Asthana stated in his testimony submitted to the committee, chaired by Sen. Joe Manchin (D-WV).

The grid is strong, with diverse generation resources, healthy reserves, a robust transmission system and a transparent planning process, Asthana said.

“Nevertheless,” he said, “ensuring the continuing strength and reliability of the grid requires our constant attention.”

Reliable operation is complex, involving multiple layers of protection, Asthana testified. It involves 24/7 system monitoring and dispatch by trained operators, coordination with other operating entities and industry sectors in real time, markets that support reliability and resource adequacy over the long term, and extensive regional transmission planning to ensure the grid is equipped to serve future needs.

PJM’s large footprint, robust reserve margins and strong interconnections with neighboring systems contribute to reliability. PJM members prepare and winterize, in part, because of the nature of the region, which covers much of the Atlantic seaboard and upper Midwest.

PJM and its member companies plan throughout the year for winter – and summer – conditions, and follow an extensive pre-winter preparation checklist. The extensive preparations of PJM members, and the close coordination with those members and other stakeholders, support PJM’s readiness to address unforeseen outages or other system disruptions. All of these elements have contributed to a definite trend of improved performance of generation resources in PJM, Asthana said.

He noted that PJM prepares for threats to the bulk power system by stress-testing the system and analyzing literally millions of possible contingencies.

PJM’s competitive wholesale electricity markets serve to reinforce reliable grid operation efficiently, Asthana said. The PJM market design integrates reliability with affordability by selecting the lowest-cost power source, wherever it is located, to provide electricity to wherever it is needed, subject to physical network transfer limits over a wide region.

In addition to reliability, affordable electric service has been one of the bedrock principles since the early development of electricity to light our homes and businesses, Asthana stated in his testimony. The markets have helped support an overall decline in total wholesale costs in recent years, Asthana told the committee, and PJM’s wholesale prices have been essentially flat for two decades.

PJM’s markets, in combination with the operations and planning functions, are estimated to deliver $3.2 billion to $4 billion in annual efficiencies for customers.

“As we prepare for the grid of the future, we need to continue to ensure that affordability remains a key component of our collective thinking,” Asthana said.

The transition to a more decarbonized grid, which PJM has seen over the past 15 years, appears to be accelerating as a result of state policies, technological advances and evolving consumer preferences.

“As we see significant growth in intermittent renewable generation on the grid, ensuring continued reliability will remain our top priority,” Asthana said. “This will require deliberate and thoughtful effort and partnership among multiple parties, including PJM, our states, our transmission and generation owners and other stakeholders, and regulators such as FERC and NERC.”

In the wake of recent challenges faced by grid operators across the country, Asthana said all parties should consider the following questions regarding reliability, resilience and affordability:

  1. While most generation on our system has prepared for cold weather, should additional FERC policies, NERC standards and PJM rules be established to focus on winterization of resources and to address additional areas of resilience of both the grid and generating units?
  2. Should enhanced “circuit breakers” be established in power and gas markets to protect consumers from extreme prices during periods of extended scarcity, market dysfunction or compromised system operation?
  3. What further coordination with transmission and distribution providers, fuel suppliers and generation owners is warranted to lower the risk that supply of fuel and other critical inputs to the production of electricity is disrupted during stress conditions?

As PJM continues to learn from extreme grid events – wherever in the country they occur – Congress, the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation could provide valuable guidance, he said.

“Resilience is critical,” he told the committee during his live testimony, “and it takes deliberate effort.”

In concert with Asthana’s testimony, PJM released a white paper, “Reliability in PJM: Today and Tomorrow.”

The paper documents what it takes for grid operators to maintain reliability every day; what PJM specifically does in all facets to ensure reliability today; and how PJM will have to prepare for the future to preserve reliability while meeting the challenges of a changing grid.

Also testifying before the committee were:

  • James R. Robb, President and CEO of the North American Electric Reliability Corporation
  • Mark A. Gabriel, Administrator and CEO of the Western Area Power Administration
  • The Hon. Pat Wood III, CEO of Hunt Energy Network and former FERC Chairman
  • Michael Shellenberger, Founder and President of Environmental Progress