Tag: PJM

PA’s Energy Advantage Should Lower Bills, Not Get Trapped by Poor Decisions

Pennsylvania energy costs are ballooning, as are many other northeastern states’, in part because environmentalists have repeatedly blocked efforts to modernize and expand transmission infrastructure, including natural gas pipelines.

From ClimateRealism

Guest Post by William desRosiers, RealClearPennsylvania.

Editor’s Note: Pennsylvania energy costs are ballooning, as are many other northeastern states’, in part because environmentalists have repeatedly blocked efforts to modernize and expand transmission infrastructure, including natural gas pipelines. Natural gas is especially important for the state and affordability, but as discussed previously at Climate Realism, restrictions on natural gas pipeline development, pushes for wind and solar as replacements, and the impacts of neighboring states’ Regional Greenhouse Gas Initiative (RGGI) have bottlenecked new infrastructure.

Energy affordability is top of mind across America, but in Northeast Pennsylvania it is especially personal. After living in the region for close to 20 years, I know that when energy costs rise, families feel it in heating bills, electric bills, groceries, travel, and nearly everything else.

Pennsylvania has an advantage most states envy: abundant natural gas from the Marcellus Shale. Life would be more expensive today without it. But that advantage only matters if policy allows energy to be produced, moved, and used.

In a recent letter to the Pennsylvania Senate Consumer Protection and Professional Licensure Committee, the Marcellus Shale Coalition cited Pennsylvania Public Utility Commission data showing that purchased gas costs for major Pennsylvania natural gas utilities have fallen sharply since large-scale Marcellus production began, with several seeing supply-cost declines of 50 percent or more.

An abundance of natural gas in the region has helped shield Pennsylvania from the high costs faced in places like Europe or, closer to home, New York and New England. Policy resistance and infrastructure constraints have often made it harder for that energy to reach consumers in nearby states, despite their proximity to Marcellus Shale resources. The lesson is clear: having energy nearby is not enough. If policy prevents resources from being developed, moved, or used, families and employers pay the price.

Some Pennsylvania leaders understand this. U.S. Reps. Dan Meuser and Rob Bresnahan have both focused on the connection between energy policy, reliability, and household costs. Meuser has advocated for an all-of-the-above energy strategy that uses Pennsylvania’s natural gas resources, protects reliable generation, and pushes back against policies such as RGGI that could add costs to power production and, ultimately, electric bills. Bresnahan has highlighted the Delaware River Basin Commission’s fracking ban, which stands in contrast to responsible development taking place elsewhere in the Commonwealth. Both have also emphasized practical affordability measures, including LIHEAP, which helps seniors, veterans, families with children, and people on fixed incomes keep the heat on. Together, their work underscores a basic point: Pennsylvania has the resources to produce abundant, affordable energy, but policymakers must allow that energy to be developed, transported, and used.

Energy choice and affordability are even more important as demand grows, but reliability has to be part of the equation too. That was especially clear during the July Fourth heat wave. My family and I live in Houston, where July heat is expected. But as we prepared to enjoy Philadelphia’s celebrations for America’s 250th birthday, it felt like the weather map had flipped.

Across PJM, the grid felt that pressure too. Reuters reported that demand reached roughly 162,700 megawatts, close to its record.

PJM generation data tells the same story. During the highest-demand window, July 1 and 2, natural gas was the largest source of electricity in the mix. It averaged about 63,700 megawatts, up roughly 7,800 megawatts from before the heat wave, and supplied about 44.5 percent of PJM generation. At the peak hour on July 1, natural gas provided nearly 74,600 megawatts of power.

That mattered for reliability and affordability. Natural gas did not just backstop the grid. It anchored the supply stack with dispatchable power when demand was highest. Without that supply, PJM would have had to lean harder on more expensive resources, emergency actions, imports, or scarcity pricing, and that assumes enough alternative supply was even available. That is the uncomfortable reality behind today’s energy debate: affordability depends not only on what energy costs, but on whether enough dependable power exists when demand surges.

The goal should not be energy policy that sounds good in a press release. The goal should be energy policy that works.

A practical standard should judge every proposal: Will it help keep energy affordable, reliable, and increasingly cleaner, or add costs without delivering enough dependable power?

Pennsylvania has experience with policies that add costs to electric bills. State energy mandates and compliance programs may be well intended, but they are not free. Their costs eventually flow to ratepayers. Even when the added cost on each bill appears modest, the statewide burden can be significant. For families already dealing with higher grocery prices, housing costs, insurance premiums, and inflation, there is no painless increase.

This does not mean Pennsylvania should reject innovation or ignore environmental progress. It means policymakers should be honest about what progress requires. Cleaner energy, reliable power, and affordable bills are not competing goals. They depend on the ability to produce energy and move it where it is needed. Pipelines, power plants, transmission lines, storage, and related infrastructure are not obstacles to affordability or environmental progress. Done responsibly, they are essential to both.

For Northeast Pennsylvania, the path forward should be practical: support responsible natural gas production, build needed infrastructure, encourage new generation, protect reliability, and make affordability a central test of every energy decision. Pennsylvania’s energy advantage is real, and policymakers should ensure it benefits families, workers, businesses, and communities.

William desRosiers is a Texas-based energy and government affairs professional who built his career in Pennsylvania and has long supported education, workforce, historic preservation, and community initiatives across the Commonwealth. The views expressed are his own.

Originally published at RealClearPennsylvania, reposted with permission.

The Real Grid Crisis Is a State Policy Problem Dressed Up as a Market Failure

There’s a critique of PJM making the rounds: PJM is too big. There are too many state interests at play, and PJM doesn’t have the ability to function cohesively or quickly enough. FERC even scheduled a governance technical conference this month to examine whether PJM’s stakeholder structure can move fast enough to respond to demand. The reality is that policy disagreements at the state level are dressed up as a procedural defect with the grid, opening the way for critics to point their reforms at the wrong target.

From Watts Up With That?

By Todd Snitchler

There’s a critique of PJM making the rounds: PJM is too big. There are too many state interests at play, and PJM doesn’t have the ability to function cohesively or quickly enough. FERC even scheduled a governance technical conference this month to examine whether PJM’s stakeholder structure can move fast enough to respond to demand. The reality is that policy disagreements at the state level are dressed up as a procedural defect with the grid, opening the way for critics to point their reforms at the wrong target.

Disagreements at the state level are just what you’d expect, pitting those that generate enough power to export against those that depend on imports. Pennsylvania is PJM’s energy workhorse, shipping out roughly a quarter of everything it generates. Illinois, West Virginia, and Michigan also produce more than they consume. The others – Virginia, Maryland, New Jersey, and Delaware – are net importers, and increasingly so as data centers expand across their footprints.

Exporters like Pennsylvania that are rich in nuclear, gas, and coal generation have fundamentally different interests in capacity pricing and transmission cost allocation from an importer state, which has restricted natural gas development, leaned hard into renewables, or joined an ambitious emission reduction program. When Virginia pulls in more expensive power from its neighbors, or when Maryland absorbs double-digit rate hikes, that isn’t a governance failure – it’s the market doing its job by revealing the cost of divergent state policy preferences (and thus resource access).

These state policy preferences are then lobbed at the market and its participants to respond to, whether by prematurely retiring generation, relying on tax subsidies, or simply building generation that is more expensive per megawatt when compared against traditional baseload fuels.

PJM is actively working to continue the evolution of the market to meet the demand of today and the future. It has cleared more than 60% of its interconnection backlog under a reformed study process and opened a new study cycle this spring in partnership with Google to apply AI to speed up the review process. A separate PJM program, the Reliability Resource Initiative, pulled in more than 11,000 MW of new projects that could come online quickly. PJM has also adjusted its review processes to allow more wind, solar, and storage to compete directly in the capacity auction. It’s even accepted a price collar through 2030, demonstrating that it is willing to make short-term adjustments in response to concerns by state executives.

More than 46,000 MW of approved projects – over a quarter of PJM’s existing capacity – already hold the right to build but are unable to move forward. Some 37,000 MW of PJM-approved generation can’t even break ground at all because of state and local permitting fights. At the same time, state policy mandates have pushed working plants into early retirement, further tightening supply from the other end. The same governors demanding faster action are often the ones holding the permits and slow-walking the buildout of energy infrastructure while forcing closures of dispatchable power.

PJM is not too big. It has demonstrated time and again that it can run a competitive power market and ensure the reliable transportation of power across 13 very varied states and the District of Columbia. It’s been successfully doing this for more than 30 years, delivering $5 billion in savings annually to customers, just as it was designed to do. It’s accelerated the queue and kept the lights on. What the market cannot do is permit projects or draft legislation. States must recognize their role in restricting the full benefits of the market.

Asking PJM to continue navigating these policy issues in the same manner – trying to respond to all of them – is a recipe for disaster. The states are absolutely responsible for chucking icebergs into the path of this ship, and if it goes down, they’ll have themselves to blame for the aftermath.

Todd Snitchler is President and CEO of the Electric Power Supply Association (EPSA).

This article was originally published by RealClearEnergy and made available via RealClearWire.

Renewables power down as Winter Storm Fern heats up

In Episode 537 of District of Conservation, Gabriella discusses how renewables have gone dark in many of the areas impacted by Winter Storm Fern, how state policymaking invites unstable grids, the need for new pipelines in the Northeast, and why energy abundance policies will catch on in the states. Tune in to learn more!

A red fox standing on snow, surrounded by fallen leaves in a winter landscape.

From CFACT

By Gabriella Hoffman

“The weekend’s arctic blast has put much of the U.S. grid through a stress test and served as another alert about the growing risks to electric-power reliability. Americans can be grateful the Biden crowd didn’t succeed in forcing all coal plants to shut down.” – WSJ

In Episode 537 of District of Conservation, Gabriella discusses how renewables have gone dark in many of the areas impacted by Winter Storm Fern, how state policymaking invites unstable grids, the need for new pipelines in the Northeast, and why energy abundance policies will catch on in the states. Tune in to learn more!

Listen on Apple Podcasts

EP 579: BAAJA Blast: Permitting Reform or Bust – District of Conservation

In Episode 579 of District of Conservation, Gabriella discusses the permitting reform bill – aka BAAJA – that is gaining traction in Congress now. The Senate will hold a cloture vote starting at 3:30pm ET in a motion to proceed. Gabriella discusses the status quo without permitting reform, how BAAJA is good for the environment and affordability. Tune in!SHOW NOTESBipartisan Policy Center: BAAJA ExplainerEstimating the US Energy System Impacts of the Bipartisan American Affordability and Jobs Act
  1. EP 579: BAAJA Blast: Permitting Reform or Bust
  2. EP 578: Midterms, CO Amendment 83, Disneyland Goes Electric
  3. EP 577: Kaylyn Glenn – Florida Gladeswoman & Conservationist
  4. EP 576: Chiricahua National Park & Energy Security Index
  5. EP 575: Menhaden Madness (ft. Whit Fosburgh, Forage Fish Campaign)

SHOW NOTES

⁠President Trump Endorses Consumer Regulated Electricity (CRE) ⁠⁠Javier Blas Tweet on Five ISOs/RTOS⁠

⁠ISO New England Realtime Status⁠

⁠Coal Power in Winter Storm Fern⁠

⁠Liz Bowman Pipelines⁠

⁠ISO New England: Electrocute Everything⁠

⁠NYISO⁠

⁠PJM⁠

⁠ERCOT⁠

⁠Electricity Maps

Photo Credit: Gabriella Hoffman

The PJM capacity auction sent a message the Washington Left can’t spin away

The latest PJM capacity auction cleared at the maximum allowed price—$333 per megawatt-day—and still came up short. Even at the price cap, the market could not buy enough power to meet PJM’s own reliability standard.

Silhouettes of two workers in hard hats observing high voltage power lines against a sunset sky.
Silhouette workers construction. ai generative.

From CFACT

By Terry L. Headley

The latest PJM capacity auction cleared at the maximum allowed price—$333 per megawatt-day—and still came up short. Even at the price cap, the market could not buy enough power to meet PJM’s own reliability standard.

Capacity auctions exist for one reason: to make sure the lights stay on when the system is under real stress. Not on a mild spring afternoon. On the worst day of the year—when demand peaks, equipment is strained, and weather is working against you. This auction tested that standard and found the system wanting.

This did not happen overnight. Electric demand has been climbing for years. Data centers multiplied. Electrification mandates piled new load onto the grid. Population shifts changed where and when power is used. Utilities, regulators, and planners saw it coming. The forecasts were published. The warnings were filed. No one was caught by surprise.

Supply, meanwhile, lagged badly.

New dispatchable power plants take years to permit, finance, and build. Those timelines grew longer, not shorter. Projects bogged down in regulatory reviews. Lawsuits became routine. Interconnection queues stretched out for years. At the same time, existing power plants—coal, gas, nuclear—were pushed into early retirement. The math stopped working.

Capacity markets do not reward good intentions. They pay for performance when things go wrong. Power that runs when the grid is under stress earns full value. Power that depends on weather does not, because weather does not take orders. Batteries help, but only for so long. New plants cannot appear on command.

For decades, coal, natural gas, and nuclear plants carried the system. They ran day and night. They showed up during heat waves and cold snaps. They kept reserve margins healthy and prices stable. Policy choices accelerated their exit before replacements were ready.

The auction simply counted what was left.

By the time bidding hit the price cap, PJM still had not secured enough dependable capacity. That is not a market failure. That is a supply failure. You cannot buy power plants that no longer exist, no matter how high the bid.

The cap did what it was designed to do—it limited how much customers would be charged. It did not create megawatts out of thin air. Raising the cap would have raised prices without fixing the shortage. The damage was done years earlier.

Now the bill comes due.

Capacity costs from this auction will be baked into electric rates for years. Households will see higher monthly bills regardless of fuel prices or weather. Businesses will face higher fixed costs that squeeze margins and weaken competitiveness. Manufacturers will factor those costs into decisions about where to invest—or whether to invest at all. This is the real-world cost of pretending supply does not matter.

Political rhetoric about protecting working families collapses when electricity becomes scarcer and more expensive. Power prices respond to physics and infrastructure, not slogans. Shrinking reserve margins and fewer dependable plants mean higher costs. Ratepayers pay them every time.

For years, planners assumed new capacity would show up somehow, even as rules made building it harder. Retirements accelerated. Replacements stalled. Hope replaced hard planning. This auction priced that gamble.

PJM followed its rules. The market worked as designed. It revealed the condition of the system policymakers handed to it. Demand is still growing. Data centers are still being built. Electrification policies are still adding load. Peak demand forecasts are still rising.

Supply constraints remain. Permits still take years. Interconnection queues are still backed up. Financing remains uncertain. More retirements are already scheduled. There is no near-term surge of dependable capacity waiting in the wings. Under those conditions, higher capacity prices are not a surprise. They are inevitable.

Reliability is built, not declared. Power plants and transmission lines take time. Skilled workers and fuel supply chains matter. Decisions made today show up in auctions years later. Reserve margins are the system’s shock absorber—and they are thinning.

This auction measured the result.

Unless policy changes to allow dependable power to be built and kept online, the pattern will continue. Capacity will tighten. Prices will rise. Customers will pay.

The auction sent a message in megawatts and dollars. The Washington left may try to spin it, but the grid will not.

This article originally appeared at Real Clear Energy

The Road To Hell Is Paved With Green Intentions

Sometimes you can’t help but marvel at how much we’re all willing to pay for the illusion of “green progress.” New Jersey decided—like half the country—that climate purity would be achieved by wind turbines, solar panels, and endless press conferences declaring victory against bad old fossil fuels. But someone forgot to run the numbers, and now the bill arrives, with a little note attached: “Due immediately. No refunds. See: your monthly utility statement.”

A close-up of a dark, ominous face with glowing green eyes, partially emerging from debris against a dramatic sunset backdrop.

From Watts Up With That?

Guest Post by Willis Eschenbach

Sometimes you can’t help but marvel at how much we’re all willing to pay for the illusion of “green progress.” New Jersey decided—like half the country—that climate purity would be achieved by wind turbines, solar panels, and endless press conferences declaring victory against bad old fossil fuels. But someone forgot to run the numbers, and now the bill arrives, with a little note attached: “Due immediately. No refunds. See: your monthly utility statement.”

Let’s start with the latest funhouse mirror: PJM’s capacity auction. You’ll see the acronym “PJM” all over any story about electricity markets, grid drama, and ratepayer headaches up and down the Eastern seaboard. So, what actually is PJM—besides an endless font of regulatory press releases and auction results?

PJM, when it’s at home, stands for Pennsylvania-New Jersey-Maryland Interconnection. Despite the name, it’s not just those three states anymore. It’s now the largest regional transmission organization (RTO) in the United States, covering all or part of 13 states (think New Jersey, Pennsylvania, Ohio, Virginia, Illinois, etc.) plus Washington, D.C., stretching from the rust belt to the edge of the South. Its territory spans 65 million people—nearly one fifth of the country—so what happens in PJM’s control room often decides whether your air conditioner hums or whimpers in August.

But PJM isn’t a power company. It owns no transmission lines, no power plants, no substations. It’s the air traffic controller of the grid—coordinating the flow of electricity across 88,000 miles of high-voltage transmission, managing more than 1,400 power generators, and pulling the levers of gigantic energy marketplaces where utilities buy the electrons they deliver to your living room. When you hear about capacity auctions, day-ahead markets, or “grid reliability events,” PJM’s the referee moving pieces around the giant chessboard of supply and demand.

PJM works around the clock—like a cross between NASA’s control room and the pit bosses in Vegas who used to give me the hairy eyeball—tracking generation, monitoring demand in real-time, and dispatching power plants to keep everything balanced minute to minute. They’re charged (pun intended) with making sure the lights stay on for hospitals, factories, schools, and your midnight TikTok habit. Their holy grail? Reliability and low cost, achieved by—ideally—always calling on the cheapest available source of power and preventing rolling blackouts when the weather or a misbehaving power plant throws a wrench in the works.

Importantly, PJM doesn’t serve customers directly or send you a bill. Your utility—PSEG, JCP&L, Atlantic City Electric, and the like—buys power at these massive auctions and passes the costs through to consumers. When PJM’s auctions spike, your rates spike. When the grid creaks due to “renewable integration,” “data center demand,” or “retiring nuclear plants,” PJM rings the alarm bell and shuffles the mix, often asking utilities (and by extension, you) to pay more for reliability.

So next time you see “PJM” in the news, remember: it’s not a company, it’s not a government agency, and it’s not run by mad scientists or Wall Street quants. It’s the big, complicated, nonprofit grid manager whose job is to juggle electrons, forecast tomorrow’s peaks, referee the markets, and—hopefully—keep your dinner out of the dark. If they cough or sneeze, everyone from New Jersey to Ohio checks their fuse box—just to be safe.

Now for years, the PJM auction price for “guaranteed” power—the kind that keeps your lights on after sunset—hovered around $29.92 per megawatt-day. That number just jackknifed straight through sanity’s guardrails and into $329.17/MW-day for 2026. That is a tenfold hike.

(Note that the unit of $ per megawatt-day reflects the market’s annual capacity payment to generators for guaranteeing their availability, regardless of actual energy delivered. The figure is not meant to be directly converted into an energy unit ($/kWh) for retail bills, as it covers standby and reliability commitment, not dispatched energy.)

Utilities don’t swallow those costs; they pass them through like hot potatoes, and suddenly, one fifth of your bill is just “capacity”—meaning “back-up for things that don’t work when it’s cloudy, calm, or 5 p.m.”

Why the spike? The grid’s been forced into a juggling act worthy of Cirque du Soleil. New Jersey, like every other “green leader,” retires gas plants and nuclear units as a matter of policy, then pins its hopes on renewables that need transmission lines and grid storage which aren’t built yet. There’s a 143-gigawatt backlog—yes, gigawatts, yes, backlog—in PJM’s project queue, most of its wind and solar waiting for bureaucrats, lawsuits, regulatory “streamlining.”, and continued consumer stupidity. In theory, the state could bathe in zero-carbon glory, but most of these projects are frozen in the interconnection swamp, with offshore wind delayed at least two years and solar farms bottled up behind transmission shortages.

Now toss in the wildcard: the AI/data center gold rush. What used to be a footnote on the demand page now accounts for 4% of total load in the PJM region—with a straight trajectory to 12% before 2030. Nearly 70% of this year’s price hike? Blame the server farms, chewing through terawatts so your robot butler can hallucinate about cat videos. PJM’s own models now admit overall demand growth has tripled, and may hit 5%/year soon—while new “clean” supply trickles in, stuck on the rails.

And what does all this cutting-edge renewable ambition actually mean for you? By August 2025, residential rates have spiked to 19.74¢ per kWh. The average bill is now $129/month—20% over the national average, with low-income families choosing between groceries and the privilege of running the water heater. Business owners are seeing $2,800 monthly charges for midsize operations.

The utility companies will offer you energy-saving tips, maybe a rebate on a smart thermostat, but explain—very quietly—that they’re just forwarding the PJM costs from upstream. Auction results, demand modeling, global fuel instability, renewable delays: all rolled into your statement, no line-item for “wishes.”

Grid modernization? Sure. The Board of Public Utilities rewrites some rules, pushes for “streamlined” solar connections, and promises to bring everyone into the clean energy fold. But each improvement needs billions for transmission upgrades, “enhanced reliability standards,” and, inevitably, more interconnection paperwork, which brings you… more delays and higher costs.

All the while, billions in clean energy projects (offshore wind, storage farms, hydrogen pilots) are being canceled nationwide—$14 to $22 billion in 2025 alone—due to political uncertainty, people looking hard at the real costs of “renewables”, vanished tax credits, and the occasional leadership shuffle. Meanwhile, moratoriums, regulatory drama, and lawsuits ensure that, for every “transformative” wind project launched, two more are killed or delayed.

And here’s the kicker: while the advocates chant that “solar and wind are the cheapest forms of energy,” the real world keeps offering up rate hikes, capacity crises, and bills that read like a ransom note.

What we’re buying isn’t reliability or affordability—it’s a perpetual promise of future savings, forever in the next quarter, if we’re lucky. So New Jersey residents get stuck paying for capacity the grid can no longer guarantee, backups for power sources that quit at sunset, and transmission lines waiting for someday.

The folly? Instead of getting affordable “clean” energy, ratepayers are underwriting a circus of subsidies and speculative projects whose delays and failures are a matter of public record. When your rates spike, remember: it’s the cost of betting the farm on renewables dependent on fickle weather, bureaucratic magic, and a market that values wishful thinking over working electrons.

And when politicians tout the beauty of renewables as prices climb and climb, just ask—how much does hope cost, per kilowatt-hour?

Because in New Jersey, you’ll find out on your next power bill, whether you asked for it or not.

My best to everyone,

w.

PS: When you comment please quote the exact words you are discussing. It avoids all kinds of unnecessary problems.

Grid on the Brink: PJM’s Record Auction Proves We Must Keep—and Build—More Coal Plants

There comes a point when even the most willfully blind must acknowledge what is plain to see. That point arrived quietly—but thunderously—on July 22, 2025, when PJM Interconnection, the grid operator for 65 million Americans across 13 states and the District of Columbia, released the results of its latest capacity auction. 

A dark, atmospheric scene depicting a group of people in a city street at night, characterized by their hauntingly bright white eyes against a mostly dark background.

From Watts Up With That?

By Terry L. Headley

There comes a point when even the most willfully blind must acknowledge what is plain to see. That point arrived quietly—but thunderously—on July 22, 2025, when PJM Interconnection, the grid operator for 65 million Americans across 13 states and the District of Columbia, released the results of its latest capacity auction. 

In technical terms, it was the 2026/2027 Base Residual Auction. In plain English? It was a panic button. A red flare. A neon billboard blinking “DANGER AHEAD.” 

For the first time in history, the auction cleared at the maximum legal price—$329.17 per megawatt-day—in every single zone of PJM’s vast territory. That’s not a random number. It’s the cap imposed by the Federal Energy Regulatory Commission (FERC). And when a market hits the cap across the board, it’s no longer a functioning market. It’s a distress signal. 

The media spin, of course, was predictable. Some downplayed it. Some focused on potential impacts to ratepayers. Others suggested reforming the market structure. But almost no one confronted the core truth that this auction screamed from the mountaintop: 

We are not building enough dependable power. We are retiring too much baseload generation. And the nation is drifting dangerously close to the edge of energy poverty and grid failure. 

Let me be direct. This auction result is not an argument for more solar panels. It is not a case for building out more offshore wind turbines or layering on more subsidy-fed “green” technologies. No, what it shows—irrefutably—is that we must preserve, reinvest in, and expand our coal-fired baseload fleet. 

I don’t say that as a romantic. I say that as a realist. Because when the grid is under pressure—when the wind doesn’t blow, when the sun sets, and when the demand spikes from a summer heat wave or a cold January night—coal delivers. 

The numbers speak plainly. Despite mandates requiring renewable and battery projects to participate in this auction, the cleared capacity was still dominated by fossil fuels. Natural gas made up 45%. Coal, 22%. Nuclear, 21%. Hydro, 4%. Wind and solar together? Just 4%—with solar at a paltry 1%. 

Think about that. After billions in subsidies, mandates, and regulatory favoritism, the combined contribution of wind and solar was negligible when the grid had to make firm commitments to be there when it counts. This wasn’t a climate conference. This was the real world. And the real world still runs on coal, gas, and nuclear. 

And here’s the part few in Washington dares say aloud: we’re headed for blackouts. Why? Because we’re retiring the only thing that stands between Americans and the dark. 

We have lost nearly 100,000 megawatts of coal-fired capacity over the last 15 years. And we are set to lose tens of thousands more over the next decade if current policies continue. Yet demand is exploding—not shrinking. And it’s not just because people want cooler homes. It’s the AI gold rush. The data center boom. The forced electrification of vehicles and appliances. The grid is being asked to do more than it ever has—and it’s being told to do it with less. 

You want to know how Wall Street responded to the auction? They snapped up shares in the only lifeline left. Talen Energy—heavy in coal and gas—saw a 9% jump. Constellation Energy, operator of both nuclear and fossil plants, rose 5%. Investors saw what policymakers refuse to admit: coal is valuable again. Coal is essential again. 

In fact, it never stopped being essential. We simply decided to forget that truth in pursuit of ideological fantasies. We convinced ourselves that electrons from a solar panel on a cloudy December morning in Pennsylvania would somehow replace the steady hum of a coal plant running through the night. We told ourselves that batteries would smooth over the gaps—never mind that we haven’t invented one yet that can store power for weeks or months at scale. 

PJM’s auction didn’t just reveal prices. It revealed the cost of that delusion. 

A $329 capacity price is the market’s way of saying, “Build something that works—or else.” But what are we building? More offshore wind farms that are already facing cost overruns and cancellations? More solar fields that can’t deliver after 5 p.m.? More promises? 

No. The only thing actually keeping the grid stitched together right now is the existing fleet of dispatchable generation. And when the crisis became clear, even anti-coal policymakers quietly folded. In Maryland, two coal plants—Herbert Wagner and Brandon Shores—had been slated for retirement. PJM said losing them would be a reliability risk. So they stayed open. Through 2029. 

That’s not a victory for coal lobbyists. That’s an admission that the laws of physics don’t care about ideology. 

Even Pennsylvania Governor Josh Shapiro—a man not known for his affection toward fossil fuels—threatened to pull the state out of PJM if it didn’t start building more real capacity. That’s a Democrat governor threatening to leave a regional grid because he knows what’s coming: rolling blackouts and skyrocketing rates. 

Let’s be clear: capacity payments aren’t subsidies. They’re what generators receive for the promise to deliver power when needed most. They’re a form of insurance. And when insurance costs explode, that means the risk is rising. If we don’t build more dependable supply, energy poverty won’t be a theoretical fear—it will be a Tuesday afternoon. 

So what do we do? We stop chasing utopian dreams and start investing in the power plants that work. That means keeping every existing coal plant online for as long as safely possible. That means upgrading emissions controls, modernizing turbines, improving heat rates, and giving coal plants the life extension they deserve. 

And yes, it means building new coal-fired capacity. That’s not a radical idea. It’s what every serious country is doing. China built over 100 gigawatts of new coal capacity last year. India’s building it. So is Indonesia, Turkey, Bangladesh, and much of Africa. They know what the West forgot: you can’t have a first-world economy without first-world energy. 

You don’t have to love coal to accept that reality. But you do have to be honest. 

The auction results also highlight something else—something even bigger. This isn’t just an energy crisis. It’s a national security crisis in the making. We are increasingly dependent on foreign supply chains, intermittent energy, and transmission systems stretched to the breaking point. Coal is American. It’s mined by American workers. It’s transported on American rails. And it’s stored right at the plant, where it can be burned in any weather, under any condition, regardless of geopolitical chaos. 

That’s a kind of resilience you can’t put a price tag on—but PJM’s auction just tried. $16.1 billion in capacity payments—for a single year. All to keep the lights on. And we’re told this is “cheaper” than investing in coal? 

We have to think longer-term. A modern coal plant has a 40 to 60-year lifespan. It’s a generational asset. It produces power steadily, predictably, and affordably. And unlike gas, it doesn’t depend on a just-in-time pipeline model that can freeze up, be hacked, or be rationed by some distant bureaucrat. 

It’s not a matter of nostalgia. It’s a matter of necessity. 

Coal is the bridge to whatever energy future we build. But here’s the truth: it may not just be the bridge. It may still be the cornerstone. Because no matter how far technology advances, the need for solid, on-demand, around-the-clock electricity will never go away. 

If we continue down this path—retiring dependable generation while hoping something better will come along—we will face what California and Texas already have: rolling blackouts, unaffordable rates, and public anger. But unlike them, we still have time to reverse course. 

Let PJM’s auction be the line in the sand. Let it be the moment we stopped pretending and started preparing. 

We need coal-fired power. We need it now. And we will need it for decades to come. 

Let’s stop apologizing for that. Let’s start building like we mean it. 

Terry L. Headley is a veteran energy policy analyst and communications strategist with more than 25 years of experience in the coal, energy, and public affairs sectors. He served as Director of Communications for the West Virginia Coal Association and the American Coal Council. A former energy journalist, Headley is principal of The Headley Company, a firm specializing in strategic communication and policy analysis for traditional energy industries. 

This article was originally published by RealClearEnergy and made available via RealClearWire.

Illinois Electricity: Subsidies, Mandates, Inflation

“If Illinois wants an affordable and reliable grid, the answer is to end subsidies and mandates for all forms of generation. And to eliminate regulations that are taking the most affordable and reliable fuels out of the generation mix. Nothing else will work.”

From Master Resource

By Bill Peacock

“If Illinois wants an affordable and reliable grid, the answer is to end subsidies and mandates for all forms of generation. And to eliminate regulations that are taking the most affordable and reliable fuels out of the generation mix. Nothing else will work.”

Electricity prices are climbing in Illinois. As is the public’s concern about them. To address this, Governor JB Pritzker and governors from four other states recently asked the PJM Interconnection to do something about the escalating rates.

While the concern is widespread, there is little consensus over the cause of the higher prices. Some blame fossil fuels. Others the PJM capacity market. And others a lack of investment in battery storage. Most agree, though, that government intervention is needed to fix the problem.

However, a closer look shows that government intervention is the source of the problem.

Background

Illinois’ fuel mix, the type of facilities used to generate electricity, has dramatically changed over the last ten years. In 2013, 91 percent of the electricity used in the state was generated by nuclear (48%) and coal (43%). Renewable generation from wind and solar were less than 5 percent, and natural gas supplied only 3.4 percent.

The mix is very different today. Coal’s output plummeted to only 15 percent, leaving a huge hole in Illinois’ generation capacity. To fill the breach, renewable generation has almost tripled to 13.3 percent and natural gas now provides 16 percent of load.

Why did this happen? First, over the decade, Congress has provided subsidies of more than $81 billion of taxpayer money to force renewable energy onto the national grid. Illinois is partnering with Congress to require its electric utilities to obtain 40 percent of their electric power from renewables by 2030 and 50 percent by 2040.

The second reason is that in 2021, Illinois enacted a clean energy law mandating zero emissions from all coal-fired power plants by 2045. Federal regulations are also designed to accomplish a similar outcome.

The result of this growing dependence on renewables is a more expensive, less reliable electric grid. Advocates of wind and solar are doing everything they can to mask this.

Misdirection, More Government

For instance, state Sen. Bill Cunningham filed legislation last spring designed to address higher prices and energy shortages. One of the ways the legislation addresses this is to set up a system of energy storage credits. In layman’s terms, Sen. Cunningham is proposing government mandated subsidies for batteries designed to store electricity.

In addition to ignoring how consumers paying for new subsidies will reduce their electricity costs, the senator does not explain that the reason Illinois is facing potential energy shortages is because intermittent, i.e., unreliable, renewable energy has replaced the highly reliable coal-fired generation that had kept the lights on in Illinois for decades.

Another renewable advocate, Sarah Moskowitz, the executive director of the Citizens Utility Board, tries to blame fossil fuels for the grid’s problems. She offers the example of Winter Storm Elliot, when she says PJM “made the unusual request that everyday customers conserve energy.” She claimed that “the fossil-fueled power generators who for years had sold themselves as necessary for grid reliability, failed to deliver.”

However, the data explains that it was renewables that were no shows.

During the storm, PJM asked “consumers to reduce their use of electricity … between the hours of 4 a.m. on December 24, 2022 and 10 a.m. on December 25, 2022.” At 4 a.m. when the call for conservation went into effect, it was 0 degrees outside and demand was rapidly increasing, but renewables were not coming through. Wind provided only 5 percent of the electricity being generated, and solar 0%. Eighty-three percent of the electricity came from natural gas, coal, and nuclear generation. Even at noon that day, solar only provided 1 percent of the load, 692 megawatts, despite having an installed capacity of 2,096 megawatts.

Conclusion

Renewables can still not be counted on, while the options for grid reliability are diminishing. Government mandates, subsidies, and regulations are shutting down investment in reliable, dispatchable thermal generation from fossil and nuclear fuels.

PJM’s capacity market will not solve the problem—it will only make the grid more expensive, not more reliable. My state of Texas—the nation’s leading generator from renewable sources—has already tried this by throwing $40 billion at generators over the last three years in the hope of increasing thermal capacity. It did not work.

If Illinois wants an affordable and reliable grid, the answer is to end subsidies and mandates for all forms of generation. And to eliminate regulations that are taking the most affordable and reliable fuels out of the generation mix. Nothing else will work.

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Bill Peacock is the policy director of the Energy Alliance. He has been researching and writing about electricity markets for 20 years.

Renewables versus the grid at PJM

The grid was not built to run on “renewables” and this simple fact is becoming clear at PJM, which is America’s biggest Regional Transmission Operator. To mix metaphors, the renewables stampede is swamping PJM, so the stampede is bogging down. This is good news.

 From CFACT

By David Wojick 

The grid was not built to run on “renewables” and this simple fact is becoming clear at PJM, which is America’s biggest Regional Transmission Operator. To mix metaphors, the renewables stampede is swamping PJM, so the stampede is bogging down. This is good news.

By way of background, PJM once stood for Pennsylvania, New Jersey and Maryland. It was a voluntary utility group formed after the huge blackout in the late 1960’s. Today it manages the grid as far south as Virginia and west to Illinois, serving about 65 million people in 13 states, including me. Central megalopolis if you like.

PJM’s key role in this story is called “interconnection”. Any utility or independent power producer can build a wind or solar generating facility, but PJM has to approve its connection to the grid, without which it is useless.

Before approving a new connection PJM rightly conducts a grid impact analysis. This means modeling the operation of the grid with the new generation active, to see what problems it might cause. They also determine what transmission upgrades will be needed and bill the owner of the generator accordingly. This is basic grid management.

The renewables stampede has swamped PJM to the point where they have stopped approving new connections. The numbers are indeed staggering.

As of March PJM reportedly had an overwhelming 2,649 active projects in its generation interconnection queue. Almost all of these are wind and solar, and many are small.

Even more ridiculous is the amount of generation involved. PJM’s total installed electric generation capacity is approximately 192,000 MW. A lot of this is seldom used minor stuff as they only peak around 150,000 MW, and that is just a few times a year.

In contrast the stampede queue totals around 259,000 MW or nearly double present peak need. Adding this monstrosity to their present capability gives an incredible 451,000 MW.

There is simply no way to assess the potential impact of this much intermittent nonsense. PJM is used to assessing the incremental addition of small numbers of reliable power plants. Most of these are relatively large, built to serve specific loads and located near suitable transmission.

In contrast this glut of renewables is mostly located where the developer can find the land to build on. Neither need nor transmission is considered. In fact since the land required is large they tend to be located very far from urban load centers.

The first thing PJM did was to throw up their hands. They declared a two year moratorium on approving new connections while they considered how to deal with this impossible stampede. Several steps are now being tried out over a four year go-slow trial period.

First they are restructuring the connection application queue from first come, first served, to taking those projects that look ready-to-build first. Second they are trying to bundle groups of these projects into clusters for purposes of assessment.

Whether these steps work remains to be seen but in the interim connection approvals are likely to be slow, as they should be. The grid does not need a stampede.

The transmission upgrade issue also looms large. According to one study, average interconnection costs for active projects rose from $29,000/MW to $240,000/MW between 2017 and 2022, an eightfold increase.

This huge jump is due to the remoteness of renewables. While the transmission upgrade costs for gas fired power plants run around $24,000/MW the cost for renewables ranged from $136,000 to a whopping $335,000, or fourteen times gas.

Not surprisingly these huge upgrade costs have rendered many wind and solar projects financially unworkable, which is how it should be. Those promoting the so-called energy transition have ignored the need to rebuild the grid along the way.

I am sure that PJM’s problems are universal. The renewables stampede is both costly and unmanageable since it requires rebuilding much of the power grid. The actual engineering is going to slow it way down and that is a good thing.

Author


David Wojick

David Wojick, Ph.D. is an independent analyst working at the intersection of science, technology and policy.

For origins see http://www.stemed.info/engineer_tackles_confusion.html For over 100 prior articles for CFACT see http://www.cfact.org/author/david-wojick-ph-d/ Available for confidential research and consulting.

Addressing Wind/Solar Instability: Hardwiring the Grid

Those of us who were watching the grid had noticed for years that Texas ran with a very low reserve margin…and there were predictions that Texas was going to be in trouble,

From Master Resource

By Ed Ireland

The near failure of the Texas power grid, coming just 4 minutes and 37 seconds from a complete collapse on February 14, 2021, was the first alarm bell that something was dreadfully wrong with US power grids. Meredith Angwin, a physical chemist and power grid specialist, described the February 2021 failure of the Texas power grid failure as a seminal event that was not a surprise:

Those of us who were watching the grid had noticed for years that Texas ran with a very low reserve margin…and there were predictions that Texas was going to be in trouble, [1],”

Since then, more power-grid operators have been speaking out about the increasing instability of their grids due to an over-weighting of non-dispatchable wind and solar power. A report on February 24, 2023, from the largest power grid in the US, PJM, warned of “increasing reliability risks” affecting 13 states and the District of Columbia and 65 million people who get their power from PJM. This report is a wake-up call for all US power grids because most face the same grid instability problems highlighted in the report:

  • The growth rate of electricity is likely to continue to increase from electrification coupled with the proliferation of high-demand data centers in the region.
  • The projections in this study indicate that it is possible that the current pace of new entry (of electricity generation capacity) would be insufficient to keep up with expected retirements and demand growth by 2030.
  • Thermal generators are retiring rapidly due to government and private sector policies as well as economics.
  • PJM’s interconnection queue is composed primarily of intermittent and limited-duration resources.

More grids have been warning that the addition of new wind and solar needs to be restrained and that retirements of dispatchable thermal generation—such as coal, nuclear and natural gas—need to slow. 

This was emphasized by Manu Asthana, CEO of PJM, in a speech at the Electric Supply Association, on March 27, 2023, when he noted that new supply resources had not kept pace with retirements because of clogged interconnection queues, siting obstacles, and supply chain constraints:

I think the math is pretty straightforward. I think we need to add [supply resources] faster … but I also think we need to subtract slower and subtract generation only when the replacement generation is here at scale. I really think that’s critical.

Asthana also emphasized that these retirements are not the result of old facilities being voluntarily shuttered but instead are being forcibly closed by government intervention:

Most of the retirements are expected because of state and federal environmental and climate policies.

He added that PJM faces the additional problem of increasing loads from the EVs and the push to “electrify everything,” plus data center growth since their grid includes the greater Washington DC area.

The problem of rapidly retiring dispatchable power generation such as coal and natural gas is indeed entirely policy-driven. One of Joe Biden’s campaign promises was to eliminate fossil fuels, with policies focused on eliminating coal mines and coal-fired power plants. He said recently that all of the country’s coal plants should be closed because they’re “too costly to operate and can’t be relied upon as a dependable energy source for future generations” and replaced by wind and solar.

The significant impact of these energy policies was emphasized in a recent article in the Houston Chronicle:

Hundreds of power plants, representing more than 87,000 megawatts of coal-, nuclear- and natural gas-fired generation, have retired in the United States over the past five years as power grids age and adjust to investor pressure and tougher state regulations around climate change, according to data from the Energy Information Administration.

New solar and wind farms are coming online to replace them at a fast clip — of the 46,000 megawatts of new capacity added to the grid last year, more than 60 percent were solar and wind projects, according to the energy administration.

These warnings are not new. ERCOT, the operator of the Texas grid, warned two years ago after the near collapse of the Texas grid during Winter Storm Uri that they were launching a study of potential changes to improve the performance and long-term stability of the Texas grid.

The results of that study provided the basis for the Texas legislature to hold hearings that culminated in two bills approved by the Texas Senate last week on May 5. Senate Bill 6 passed by a vote of 22 to 9 to build up to 10 gigawatts of backup power generation that is weatherized and has on-site fuel equivalent to 10 nuclear reactors. It would create an energy insurance fund using taxpayer money, and builders of the facilities would be assured returns of up to 10%. Senate Bill 7, passed 31-0, creates a financial incentive to encourage the private development of energy generation resources that can come on within two hours and run for at least four hours, such as natural gas plants or batteries.

Opponents immediately created the false narrative that the Texas bills are proof that Texas politicians “no longer have faith that competitive markets can adequately and economically satisfy the electricity need of Texas citizens,” said Beth Garza, a consultant for the think tank “R Street Institute.

On the contrary, the Texas Senate plan is designed to address the anticompetitive policies embodied in the comically-misnamed Inflation Reduction Act and other policies coming out of the Biden Administration. As PJM CEO Asthana (cited above) noted, such measures are needed because “the U.S. no longer has competitive energy markets now that the heavy hand of government has superseded markets with massive taxes and subsidies for wind and solar.”

In a recent article in Forbes and Substack, David Blackmon summed up the pending legislation in Texas:

Advocates for renewables and the climate change lobby also oppose the program on the grounds that it could crowd out the building of more renewables and increase emissions. But the bill does nothing to impact the array of incentives and subsidies for renewables that already exist. ERCOT has clearly demonstrated it already has a hard time properly managing the high volume of wind capacity that has been loaded up on the grid in recent years, and a major weakness of renewables is their failure to perform during severe weather events, which is the whole point of having an adequate reserve of dispatchable thermal capacity.

We will know soon if these bills can be passed into law by both houses of the Texas legislature. With the federal government ramping up subsidies for more and more unreliable energy, states may need to follow some form of the Texas approach by subsidizing or otherwise facilitating the addition of dispatchable power, such as natural gas-fired generation, to preserve power grid stability.

[1] Robert Bryce’s Power Hungry Podcast, starting at the 2-minute mark).

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Ed Ireland is an Adjunct Professor at TCU’s Neeley School of Business. He received his B.S. from Midwestern State University and Ph.D. from Texas Tech University. This analysis was originally posted at Thoughts About Energy and Economics (free subscription).