AKRON, Ohio — FirstEnergy is seeking federal intervention to keep three nuclear plants operated by its subsidiaries open. But PJM Interconnection, the regional transmission organization that operates the grid, told the feds this week it can get by just fine without the plants.
FirstEnergy is based in Ohio, and the three plants are located in Ohio and Pennsylvania, but FirstEnergy subsidiary Mon Power provides power locally, so what affects the parent company remains of local concern via ripple effects on rates and grid stability.
PJM spokesman Jason McGovern told The Dominion Post in an email exchange, “The planned deactivations of four nuclear FirstEnergy Solutions’ generating units in Ohio and Pennsylvania can proceed as scheduled without compromising reliability in the PJM transmission grid, according to a study by PJM and affected transmission owners.”
He references four units instead of three because one plant has two units.
“Any potential reliability impacts,” he said, “will be addressed by a combination of already planned baseline transmission upgrades, timely completion of new baseline upgrades and operations re-dispatch via other routes, as necessary.”
Stratton Kirton, spokesman for analytic consultant Affordable Energy Coalition, backed PJM’s view: “The closing of FirstEnergy’s three nuclear power plants will not reduce grid reliability. … Competitive markets are working. Despite FirstEnergy’s pleas for taxpayer-funded support, the reality is there is no grid emergency.”
Case background
As reported this week, FirstEnergy subsidiaries First-Energy Solutions (FES) and its subsidiaries, and FirstEnergy Nuclear Operating Co. (FENOC) are seeking Chapter 11 bankruptcy protection. The parent company announced it reached an agreement in principle with two key groups of creditors in the proceedings.
The bankruptcy and the plant closures are part of FirstEnergy’s announced strategy of moving completely out of the competitive, deregulated energy market and fully into the regulated market, where revenues are more predictable and secure.
FirstEnergy announced in November 2016 its plan to exit the competitive generation business. This March, FES filed notice with PJM that the three nuclear facilities would be deactivated or sold during the next three years. In the meantime, all of the plants will continue current operations.
FES and FENOC own and operate two coal-fired plants, one dual fuel gas/oil plant, one pet-coke fired plant and three nuclear power plants in the competitive, nonregulated, power-generation industry.
In contrast, Mon Power is regulated: Rates are subject to approval by the state Public Service Commission.
At the end of March, FES applied to U.S. Secretary of Energy Rick Perry seeking an emergency order directing PJM to secure the long-term capacity of certain nuclear and coal-fired plants in the region — including FES plants — to compensate their owners “for the full benefits they provide to energy markets and the public at large, including fuel security and diversity.”
In the 44-page application, FES accuses PJM of shortsightedness in protecting the stability and dependability of the energy grid in the face of mounting challenges, such as weather disasters.
“PJM continues to claim all is well with its system but at the same time shows it does not have a clear view of what resilience is, how to measure it, or how to ensure it,” FES said. “We find ourselves at a crisis point where significant baseload generation will cease to exist in [regional transmission organization] markets without quick and decisive intervention.”
PJM stance
In response, PJM said in a Monday release, “The PJM grid remains reliable, even with the resource retirements analyzed to date and investment in new, increasingly more efficient gas-powered generation sources. While the grid also remains fuel secure given these changes, the potential for continued evolution of the fuel mix underscores concerns, raised by PJM in a March 2017 report, about the need to examine the long-term resilience of the grid.”
PJM sent Perry a copy of its new report, “Valuing Fuel Security,” and told him in a cover letter that it informed FES that the grid remains secure despite the planned closures, for the reasons McGovern cited above in his email: The planned upgrades and the re-dispatching of power as needed.
“With these measures,” it said, “the PJM Transmission system will remain reliable, and therefore, the generating units may plan to deactivate as scheduled.”
PJM defines fuel security as “risks to the fuel supply and delivery to critical generators.” Fuel security affects grid resilience, “as a combination of public policies, lower fuel prices and technology improvements alter the traditional mix of generation resources serving customers.”
PJM is launching a three-phase fuel security risk analysis, spelled out in “Valuing Fuel Security.” In phase one, it will identify potential grid system vulnerabilities. These will vary with geography.
In phase two, it will evaluate and model those vulnerabilities. This will include simulations and scenarios that weigh the effects of extreme weather demands, additional coal and nuclear plant closures, and replacement of those plants with gas-fired plants.
Phase three involves ongoing coordination of grid demands with federal authorities, states and various stakeholders to address any physical and cybersecurity concerns.
