Wednesday, December 20, 2023

FERC Approves PJM $1.25 Billion Winter Storm Elliot Settlement With Non-Performing Natural Gas, Other Electricity Generators

On December 20, the
PJM Interconnection announced the Federal Energy Regulatory Commission approved a $1.25 billion Winter Storm Elliot Settlement with 81 settling parties.

The settlement results in a market-wide reduction of non-performance charge assessments from an estimated $1.8 billion to an estimated $1.25 billion

The Commission’s order concludes extensive litigation arising from the loss of more than 40,000 MW of generation during Winter Storm Elliott, circumstances that required PJM to take multiple Emergency Actions on Dec. 23–24 to preserve system reliability in the PJM region, while also helping to avoid service interruptions in neighboring regions.

PJM reported non-performance by natural gas-fired electric generation accounted for 70% of the total outages, coal 16% and the remainder were oil, nuclear, hydro, wind and solar.  Read more here.

“PJM appreciates the cooperation of its Members who participated in the FERC-supervised settlement proceedings and reached this consensus-based resolution, allowing the PJM stakeholder community to focus on improvements and solutions going forward,” said Christopher O’Hara, Sr. Vice President and General Counsel.

The list of settling parties includes: Ad Hoc Committee of Certain Noteholders of Talen Energy Corp. Aurora Generation, LLC; Brunner Island, LLC; Calpine Corporation; Camden Plant Holding, L.L.C.; Clean Energy Future – Lordstown, LLC; Competitive Power Ventures Holdings, LP; CPV Power Holdings, LP18; East Kentucky Power Cooperative, Inc.; Elwood Energy LLC; Energy Harbor LLC; Essential Power OPP, LLC; Essential Power Rock Springs, LLC; H.A. Wagner LLC; Hickory Run Energy, LLC; Invenergy Nelson, LLC; Jackson Generation, LLC; Lakewood Cogeneration, L.P.; Lanyard Power Holdings, LLC; Lee County Generating Station, LLC; Lightstone Marketing LLC; Lincoln Generating Facility, LLC; LSP University Park, LLC; MC Project Company LLC; Montour, LLC; Orion Power Holdings, LLC; Parkway Generation Keys Energy Center LLC; Parkway Generation Operating LLC; Parkway Generation Sewaren Urban Renewal Entity LLC Red Oak Power, LLC; Rockford Power, LLC; Rockford Power II, LLC; South Field Energy LLC; SunEnergy 1, LLC; Talen Energy Marketing, LLC; University Park Energy, LLC.

PJM said it does not plan to provide participant-specific estimates of the reduced non-performance charges and bonus performance credits in advance of the settlement reports that will be published in the Market Settlements Reporting System shortly before the monthly billing statement is issued.

Under PJM’s Capacity Performance requirement, generators that receive payments through the PJM Capacity Market are subject to non-performance charges when they fail to perform when asked by PJM to run to maintain grid reliability. 

During Winter Storm Elliott, generators that failed to perform were assessed significant performance charges. Non-performance charges paid by underperforming generators are distributed as performance payments to generators that over-perform.

PJM has an FAQ on the settlement available that describes what happens next to implement the settlement.

Click Here for a copy of the FERC orderClick Here for the Settlement Agreement.

Also visit PJM’s Winter Storm Elliot Information webpage for more background.

Related Articles - Natural Gas & Grid Reliability:

-- PJM Makes Multiple Reliability-Focused Improvements To Prepare For Winter To Deal With 70% Natural Gas, Other Generator Nonperformance In 2022  [PaEN] 

-- PJM Interconnection Reports Higher Percentage Of Natural Gas-Fired Electric Generation Outages Than Originally Thought During Winter Storm Elliott - 70%  [PaEN]

-- New NERC Winter Reliability Assessment Finds Elevated Risk Of Blackouts In Extreme Weather Conditions; Natural Gas Supplies Still Vulnerable To These Conditions With 'Devastating Consequences'  [PaEN] 

-- PJM Interconnection Formally Files Changes To Electric Capacity Market Rules With FERC Based Largely On Unreliability Of Natural Gas-Fired Power Plants During Winter Storm Elliot  [PaEN]

-- Federal Energy Regulatory Commission, NERC Final Report On Winter Storm Elliott Says Legislative Action Needed To Establish Reliability Rules For Natural Gas Infrastructure  [PaEN]

-- S&P Global: Federal Inquiry Finds Same 3 Causes Driving U.S. Electric Generation Outages In Extreme Cold - Reliability Of Natural Gas System Remains A Concern  [PaEN]   

-- Senate Hearing: Wholesale Electricity Prices Too Low To Support Coal, Natural Gas Power Plants In Market; Natural Gas Reliability Issues Will Continue  [PaEN]

-- Senate Hearing On Electric Grid Reliability: Natural Gas Continues To Have Reliability Problems; Renewables Aren’t Coming Online Fast Enough; Energy Office To Be Proposed  [PaEN]

-- PUC Again Reminds Consumers Of Dec. 1 Price Changes: Natural Gas (+149% to -64.2%); Electric (+18.8% to -25.7%)  [PaEN]

PA Oil & Gas Industry Public Notice Dashboards:

-- PA Oil & Gas Weekly Compliance Dashboard - Dec. 16 to 22 - 46% More Conventional NOVs; More Abandoned Wells; Conventional Well Fire; Venting Gas, Spills, Plugging Mess  [PaEN]  

-- Conventional Oil Well Storage Tanks Burn In McKean County, 6 Local Fire Companies Respond  [PaEN]

-- PA Oil & Gas Industry Compliance So Far In 2023 - It Isn’t Pretty   [PaEN]

-- PA Oil & Gas Industrial Facilities: Permit Notices/Opportunities To Comment - December 23 [PaEN] 

-- DEP Posted 56 Pages Of Permit-Related Notices In Dec. 23 PA Bulletin  [PaEN]

Related Articles This Week:

-- AP: Drilling Under Pennsylvania's 'Gasland' Town Has Been Banned Since 2010, It's Coming Back  [PaEN]

-- CNX Resources Begins Disclosing General Information On Fracking Chemicals, Air Monitoring Results Online At 2 Shale Gas Well Pads  [PaEN]

-- Oil & Gas Facilities Self-Reported 13,432,713 Tons Of Air Pollution In PA In 2022; 101,741,616 Tons Total Since 2012  [PaEN]

-- US DOE, Treasury Release Proposed Regulations Implementing Clean Hydrogen Production Credit Setting A Sliding Scale For Credits  [PaEN]

-- CNX Ends Coordination On West Virginia Adams Fork Ammonia Energy Project, Anchor Of ARCH2 Hydrogen Hub Application  [PaEN]

-- HEI Energy, Penn State Study Uses 28,500 Water Sample Results To Help Identify Oil & Gas Industry Groundwater Pollution  [PaEN] 

-- Susquehanna River Basin Commission Approves Water Withdrawal Requests For Shale Gas Drilling In Loyalsock, Pine Creek Exceptional Value Watersheds  [PaEN]

-- Susquehanna River Basin Commission Approves 32 Shale Gas Well Pad Water Use General Permits In Bradford, Lycoming, Sullivan, Susquehanna, Tioga, Wyoming Counties  [PaEN]

-- FERC Approves PJM $1.25 Billion Winter Storm Elliot Settlement With Non-Performing Natural Gas, Other Electricity Generators  [PaEN]

-- Project InnerSpace Launches Cross-Collaborative Future of Oil/Gas Well-Based Geothermal In Pennsylvania Study  [PaEN]

-- PUC Update On Investigation Of Dec. 12 Home Explosion In Sewickley Heights, Allegheny County  [PaEN]

NewsClips This Week:

-- WNEP: Residents Awaiting Water React To Return Of Shale Gas Drilling In Dimock, Susquehanna County: ‘Stab In The Back’

-- The Allegheny Front: Environmental Groups Pressure Gov. Shapiro To Crack Down On Shale Gas Industry 

-- ABC27: PA Environmental Groups Hold Press Conferences Asking Shapiro To Take Action On Fracking 

-- Fox News Guest Essay: Pennsylvania’s Radical Plan To Produce Energy And Protect Our Environment - By Gov. Josh Shapiro & Nick Deiuliis, CEO CNX Resources

-- PA Capital-Star: CNX Gas Company Begins Self-Reporting Air Quality Data As Part Of Shapiro Partnership

-- Bob Donnan Blog: Oil & Gas Industry Air Pollution In Pennsylvania

-- Bob Donnan Blog: Oil & Gas Industry Groundwater Pollution

-- Marcellus Shale Gas Industry Coalition: All We Want For Christmas Is - Permit Reform; More Energy Infrastructure

-- StateImpactPA - Rachel McDevitt: PA Shale Gas Drilling Activity, Gas Prices Fall, Report Says  [406 new shale gas wells drilled in 2023 increasing DEP’s workload]

-- Bloomberg: Congressional House Democrats Investigate Diversified Energy Oil/Gas Producer Methane Emissions, Business Practices  [PA Largest Conventional Well Operators] 

-- Pittsburgh Business Times: Diversified Energy Oil & Gas Well Company Share Drop Sharply After Congressional Democrats Start Well Probe

-- Tribune-Democrat: CPV Fairview Natural Gas-Fired Power Plant Gets $900,000 School District Tax Repayment After Reassessment Settlement

-- TribLive: Home For Holidays Has Different Meaning For Victims Of Natural Gas Explosion In Plum Boro, Allegheny County 

-- AP: 1 Dead After Propane Gas Hotel Explosion In Lancaster County

-- WPXI: Major Natural Gas Leak At Ross Twp., Allegheny County Business Forced Road Closures, Evacuations

-- KDKA: Explosion, Fire At AmeriGas Propane Gas Facility In Beaver County, No Injuries

-- Bloomberg: LNG Natural Gas Shipping Rates Slump On Lower Demand Despite Red Sea Chaos

-- Inside Climate News: Thousands Of Oil/Gas Wastewater Spills Threaten Property, Groundwater, Wildlife, Livestock Across Texas

-- Reuters: Texas Grid Over Relies On Natural Gas To Restore Power After Blackouts, Study

-- The Guardian: How US Utilities Keep Fossil Fuels In New Homes

[Posted: December 20, 2023]  PA Environment Digest

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