Short on Power by 2028? PA’s Power Grid Crisis

 Lawmakers in Pennsylvania heard testimony today of potential shortfalls in electric power later in the decade.

PJM Interconnection is the regional power grid for 13 states—one of which is Pennsylvania. The grid manages the infrastructure to transfer electric power all across the region. It also oversees the energy market for electric power producers and the wholesale retails that buy the power to distribute to consumers.

For the past few years, PJM has been raising alarm bells of future financial and production concerns.

In July, PJM announced it would cost $14.7 billion dollars to make sure there is enough electricity production to meet demand in 2025/26. The cost for 2024/25 was $2.2 billion.

“That means perhaps a 30% increase for ratepayers,” said Rep. Greg Vitali (D-Delaware), the majority chair for the Environmental Resources and Energy Committee.

The power grid is facing cost issues because there is more demand for electricity than there is supply.

“Increasing demand for power is definitely coming from the data center sector, generative ai, electric vehicles, the increase in electric powered equipment to heat homes and businesses, and growth in U.S. manufacturing,” said Asim Haque, senior vice president of PJM Interconnection.

Power plants like coal and natural gas are shutting down, decreasing supply.

“… due primarily to federal and state decarbonization policy,” said Haque. “There are certainly units that will retire for economic reasons if they’re at the end of their useful life. But the primary driver, if market prices are high, will be these federal and state decarbonization policies."

As gas and coal power producers shut off, PJM has struggled to approve new energy projects to replace the power being lost.

New projects must go through the PJM Generation Interconnection Queue, which studies and lays out how a project connects to the grid properly.

“The problem is that sometime around 2020, PJM's interconnection queue basically stopped working,” said Tom Rutigliano, senior advocate for Natural Resources Defense Council, "and has cleared essentially no projects.

“Since September 2020, 157,765 megawatts of projects have been submitted to PJM and exactly one megawatt has gone into service as of the end of June,” said Rutigliano. In the electric grid sector, projects are measured by how much power they will produce for the grid.

PJM has made queue reforms, and there are currently projects under construction.

“The queue was originally advanced for these large, centralized generating stations,” said Haque. "You think about it now, we’re trying to push through the queue hundreds of smaller scale renewable projects. We needed to change the frame work for that."

98% of the new projects being constructed or waiting in the queue are solar, wind, or storage projects. Renewable energy sources do not carry the same reliability value as gas and coal sources (also called thermal energy).

Renewable energy groups defend that new projects will be enough to meet demand.

“From our perspective, there’s plenty of resource adequacy in the queue and it can certainly be placed in service in time to meet resource adequacy needs through the end of the decade," Zander Bischof said, head of regulatory and government affairs for MN8 Energy, a solar energy producer. “The risk is if they tinker with the market, if they change market rules outside of the stakeholder process, a lot of investors might get cold feet."

PJM has raised concerns that approved projects do not start construction. The organization says the rate that new renewable energy sources are being built, combined with their less reliable status, could lead to energy shortfalls by 2028.