Reliability Resource Ripoff: PJM Awards Power Plant Incentives to Projects Using PA Gas But Few to PA. Is Shapiro to Blame?

Guest Post from William desRosiers

Pennsylvania is the second-largest natural gas producer in the country, sitting atop the prolific Marcellus and Utica shale plays. We power homes and businesses across the eastern U.S. and even internationally — but when it comes to building the next generation of natural gas power plants in PA, we just got our rear ends kicked down the road (pardon my bluntness here).

Last week, PJM Interconnection released the results of its Reliability Resource Initiative (RRI) — a one-time fast-track process for new generation projects, including natural gas. And, here is the full project list. This was a shot to build critical power capacity fast, and here’s how it played out in new natural gas generation:

• Virginia is adding 3,320 MW

• Ohio is adding 3,363 MW

• Kentucky is adding 786 MW

• New Jersey, another state without gas, is adding 293 MW.

Pennsylvania? Just 342 MW. A mere ~ 4.2% of new natural gas-fueled generation.

Let that sink in.

Our Keystone State produces the gas. But, when it’s time to build and capture the economic value? We Pennsylvanians are watching other states cash in.

The reality is, we could have hosted all of these new natural gas projects. We have the resources, the expertise, and the infrastructure. The fact that we didn’t secure the majority — or even half — is a true disappointment.

Sure, we will benefit from the electrons coming back home. But we will miss out on the $ billions in construction and trickle-down economic impact.
This is frustrating and, quite frankly, embarrassing.

Why did this happen?

It’s time to wake up! We have the energy. We have the workforce. Natural gas should be more than a resource we export — it should be the backbone of our economic growth here in Pennsylvania!

Editor’s Note: There’s something rotten at the bottom of the very real problem Bill identifies here. We know why the Reliability Resource Initiative exists. It’s a necessary correction to the attempt by governments to shove subsidized green energy projects down the throat of PJM. Those projects make no sense financially, and their intermittency threatens grid stability. So, PJM’s only choice to save energy security and meet AI demand is to now provide incentives to bring more natural gas projects on board. It’s the trap into which all regional transmission operators (RTOs) have fallen. They must constantly react to government mandates and adjust, thus destroying any semblance of an actual market.

So, what’s rotten? Well, consider how Pennsylvania Governor Josh Shapiro recently started a fight with PJM, supposedly over rates. Was it really? Only superficially, I expect. Shapiro wants more green energy foolishness. His corporatist supporters are demanding it, as they have large numbers of projects lined up and waiting for the subsidies. PJM has been holding them back to maintain a stable grid, but Shapiro leaned in hard and, suddenly, there was a compromise. It seems likely the RRI awards are a consequence of that deal. Either Shapiro demanded PJM not approve too many natural gas projects or PJM took the away to punish him. Or, maybe both.

.#WilliamdesRosiers #Energy #Shapiro #RRI #ResourceReliabilityInitiative #Pennsylvania