PJM discusses the future of coal, renewable energy production with lawmakers
By Matthew Young, RealWV
CHARLESTON, W.Va. – “Over the next five years […] we’re losing a significant portion of our coal fleet, (and) we’re losing a substantial portion of our natural gas fleet.”
That’s what Jason Stanek, executive director of Government Services for PJM Interconnection, told lawmakers on Monday, during a meeting of the Joint Standing Committee on Energy and Manufacturing. Stanek, who addressed the committee via Zoom, joined the meeting to provide an update regarding the reliability of the regional power grid.
As a regional transmission organizer (RTO), PJM facilitates the movement of wholesale energy throughout the eastern power grid – which encompasses 13 states and Washington D.C., and services approximately 65 million customers. Stanek’s update to lawmakers included a forecast of the energy industry’s future, in which PJM anticipates the retirement of several coal and natural gas production facilities.
“Some of it has to do with age – they’re ready to retire for a number of reasons,” Stanek said. “But a large amount of that is due to policies. They can be state policies, or they can be policies at the federal level – notably the EPA (Environment Protection Agency) policies that are affecting both new and existing coal and coal generation, as well as natural gas generation.”
“So there’s a mix of reasons, when we pull our resources, as to why they’re exiting the system,” Stanek continued. “Number one is policy. Number two is economics and age, and the cost of running the system. […] It’s about one-fifth of the system that we won’t have available to dispatch come 2030.”
According to Stanek, West Virginia produced and contributed 14,074 Megawatts (MW) to the regional power grid in 2023, with the lion’s share – some 12,532 MW – coming from coal. Just over 1,100 MW were generated through natural gas, with wind, hydro, and oil producing just 431 MW combined. West Virginia’s high coal production has allowed the state to be a “net energy exporter” to neighboring states.
With energy consumption and grid-load expected to increase in the coming years, that loss of “about one-fifth of the system” will need to be made up, something which Stanek said will most likely be done through increased investment into renewable energy sources, such as wind and solar.
“We’re seeing smaller solar farms and wind farms, or battery storage,” Stanek said. “Some of this has to do with federal law. Others have to do with tax policy and incentives to bring renewables onto the system.”
At the conclusion of Stanek’s presentation, he fielded questions from several committee members, including Sen. Rupie Phillips, R-Logan, who said, “I can’t remember the name of the program, and I don’t know how many of them in PJM were in the State of West Virginia, but I know there’s a program that PJM has companies stand down when the grid is getting in a little trouble.”
“Is that true?” Phillips asked.
According to Stanek, there are “demand response” programs facilitated by individual utility providers. Through these programs, PJM may ask a provider to “stand down” at certain times when their energy contribution is not necessary for the grid-load. The provider would then be placed in a stand-by status, with their production facilities considered “must run units” during times of emergency or excessive need.
UPDATE: After publication, a representative from PJM provided the following statement: “‘Demand Response’ is a completely separate program and concept from ‘Reliability Must Run’ units. Demand Response is actually a program where electricity customers (who sign up for these programs voluntarily) are paid through PJM’s markets to reduce their electricity usage when PJM calls for it. This is different from a Reliability Must Run unit, which is a generator that has requested to retire, but PJM has asked to remain available as a resource until the necessary transmission upgrades can be made to accommodate that unit’s retirement while maintaining grid reliability.”
While Phillips insinuated that PJM pays energy producers, specifically coal-fired power plants, to withhold production, Staneck reiterated that these programs are facilitated through individual utility providers, and not through PJM.
“So who pays for this program to basically have a gas or coal-fired power plant stand idle, and to come and rescue the grid when needed?” Phillips asked. “I’d like to know for the committee […] how many companies in the grid – at least in West Virginia, and also a dollar amount and who pays for this. Are the rate-payers paying that?”
Stanek was only able to respond to half of Phillip’s question, saying, “I’m not aware of the program you’re referring to in the second half of your question.”
“With respect to the first half of your question – who’s paying for the ‘reliability must-run’ units – at the end of the day, rate-payers effectively pay for everything,” Stanek added. “It (the cost) will migrate to a utility bill at some point.”
“That’s not an action that PJM has authority to authorize on its own,” Stanek noted. “Those payments would be made to the owner and operator of that resource (utility provider).”
After several moments back and forth between the two, which saw Phillips ask if the desired information “needed to be a FOIA (Freedom of Information Act request),” Phillips said, “I think we deserve, and I think our rate-payers deserve to know what their money is being spent on.”
After several more moments of questions from committee members, Del. Scot Heckert, R-Wood, asked, “Is PJM, in any way, subsidized by using more wind and solar, than coal or natural gas?”
Stanek responded in the negative, saying, “In no way whatsoever.”
With the recent nomination of retired coal miner Randy Smith, R-Tucker, for Senate President, energy production in West Virginia is expected to remain a priority when the new legislative session begins in February. And, just this past Saturday, lawmakers found themselves awaiting the call of Governor and Senator-elect Jim Justice for a Special Legislative Session to deliberate legislation targeting renewable energy. However, the Special Legislative Session never happened.
During his Tuesday media briefing, Justice briefly discussed the reason behind this.
Justice referred to the potential for an “economic development” project that would see the creation of an energy-production facility in Logan County.
According to Justice, the project would bring “tens-of-billions” of dollars to southern West Virginia, but the Legislature wasn’t “quite ready.”
“From my standpoint, I wanted to be absolutely positively certain that we weren’t going to do anything that was going to endanger future coal jobs,” Justice said. “And so I just felt like too many moving parts and, really and truly, what we should do is — this company’s not going to leave, I don’t think — but what we should do is we should have a longer period to really vet, and so I just felt like it was smart money to just give the powers to be a longer period to where the Legislature was more ready and we could absolutely make sure there was real participation from the Coal Association in regard to the project and to make sure that everybody won . . . and grow coal production as well as doing stuff that would have been wonderful, wonderful for generating electricity, attracting data centers or whatever.”
The 2025 Legislative Session will begin on Wednesday, February 12.
