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Feds approve power grid operator's plan to ensure reliability after winter shortages

Feds approve power grid operator's plan to ensure reliability after winter shortages

Federal regulators have approved plans drawn up by PJM Interconnection, the Valley Forge-based regional electric power grid operator, meant to increase reliability after supply shortages and price spikes during the polar vortex in 2014.

Officials with Federal Energy Regulatory Commission issued approval late Tuesday for PJM to use a “pay-for-performance” model, which for the first time establishes a penalty for power plants that fail to meet commitments to put power on the grid, according to a press release today. 

The proposal will be used in PJM’s upcoming auction in August that establishes a price for generators that agree to operate at PJM’s request from June 2018 to May 2019. 

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A change was necessary because as much as 22 percent of the power generation in PJM’s territory was unavailable in January 2014. The plan “enhances the incentives for capacity resources to be available when needed most, help reduce price spikes during system emergencies and reduce the chance of expensive forced outages,” the press release said. 

“In approving PJM’s Capacity Performance proposal, the Federal Energy Regulatory Commission has recognized the need to ensure better generator performance and fuel assurance,” CEO and President Terry Boston said in a statement. 

Daniel Moore: dmoore@post-gazette.com, 412-263-2743 and Twitter @PGdanielmoore.

First Published: June 10, 2015, 7:37 p.m.

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