PJM Seizes Failure from the Jaws of Success on Transmission Planning

One of the main barriers to the clean energy transition is our current transmission system, which simply isn’t ready. As we electrify the economy and bring new sources of clean energy online, power will flow in ways that weren’t anticipated when transmission lines were planned 50 or more years ago. Coordinated, proactive planning is widely seen as the long-term solution to this problem. The basic idea is straightforward: Start with scenarios for the future energy system and use those scenarios to plan cost-effective transmission upgrades.

The current planning at PJM (the grid operator for the mid-Atlantic and part of the Midwest) is obsolete and just not up to the task. For decades, PJM has planned by assuming the future will look exactly like the past. As our colleagues at Americans for a Clean Energy Grid put it, PJM “fails on the most basic test of planning for the anticipated resource mix.” Predictably, this results in a grid that’s not ready for the future, as most dramatically shown by the grid operator’s interconnection queue, where projects regularly face delays of five years or longer. This is reaching a crisis point: PJM is unable to connect new power generation fast enough to keep up with needs, even while thousands of wind, solar, and battery projects are stuck behind transmission planning delays.

This past year, PJM finally looked like it was trying to solve this problem. In May, its CEO Manu Asthana announced a long-term regional transmission planning initiative. Drawing on earlier work and industry best practices, PJM proposed to develop future scenarios that took into consideration state clean energy policies, how electricity use will change, and which fossil fuel resources will retire, and to build plans for the grid based on those scenarios. Work started in earnest in July, with PJM presenting a promising initial plan. Even as recently as December, NRDC’s Jossie Steinberg was hopeful that PJM would arrive at a process that would let it effectively plan for the future. 

Today, PJM dashed those hopes.

Caving to pressure from fossil fuel states, PJM has now decided that it will not consider states’ clean energy policies as it plans the transmission system. PJM will instead plan for an imaginary future that pretends the state laws mandating clean energy don’t exist, authorizes construction of the transmission projects for a fictional future without these laws, and pays for those projects using existing rules. PJM might then do separate advisory studies on real-world transmission needs that do consider state laws, and only build those projects if states somehow independently agree on the need and how to pay for them.

This raises the risk of large amounts of incorrect investments. Say a state plans to retire fossil plants and build new clean energy and storge to replace them: PJM will consider the retirements but not the new supply in its planning. This could easily result in plans for unnecessary transmission lines that bring power from fossil fuel states into the clean state. Those plans will move forward rapidly on a fixed timeline, so unless the clean state can negotiate a complex and politically fraught process to get its clean energy plans recognized, we will end up with billions of dollars in investment stranded in transmission lines that support unneeded fossil plants.

In other words, PJM is putting renewables on the back burner, handpicking winners and losers among its member states and proceeding with a fossil fuel–tainted future. 

They say if you want to kill an idea, send it to a committee. And, if you want to be really sure, make that committee spend its time arguing over money. That’s exactly what PJM proposes to do with the transmission we need for a clean energy future. Decisions about planning and paying for major projects are hard. That’s why we create procedures and rules to do them fairly without having to fight the same fights year after year. Rather than using those processes, PJM throws clean energy planning into a designed-to-fail system that leaves clean states’ goals at the mercy of states that, for whatever reason, have doubled down on fossil fuels.

Let’s be clear. 

The same people who claim to be concerned about reliability during the energy transition are now blocking the transmission we need to keep the power system reliable. If someone trumpets a problem but then undermines solutions to that problem, it’s a safe bet they’re not acting in good faith. Those are the states that PJM’s new transmission plan is putting in the driver’s seat.

The best outcome of this will be that clean states pay huge amounts of money for unnecessary transmission to support other states’ fossil fuel plants, then pay again to build transmission that benefits obstructionist states, all just to meet their clean energy goals. That’s the best-case scenario. More likely, in 2027, we’ll be looking back and wondering how we managed to waste another three years. And the clock is ticking: The planning cycle that will start in 2024 will look at needs from 2033 through 2040. In terms of planning for the future, the PJM region has lost out on meeting 2010’s needs and is in the process of losing 2020’s. Let’s not add another decade to that.

PJM can and must do better. At the very least, PJM should have a planning system that meets the standards of MISO, its neighbor to the west, which has been successfully doing long-term transmission planning since 2011. NRDC’s Claire Lang-Ree compares MISO’s tried-and-true methods with PJM’s proposal in more detail, and nearly point by point, PJM is doing worse:

• MISO develops several reasonable views of what the future might look like, then develops scenarios to represent those futures to help manage uncertainty. PJM comes up with a single scenario for a fictional future designed to appease fossil fuel interests.
• MISO considers reliability, economics, and a range of other metrics to attempt to capture a robust view of the benefits of proposed transmission additions. PJM only considers reliability, eliminating any chance of realizing the billions of dollars in benefits from transmission before it even starts. 
• MISO presents transmission projects as a single integrated system plan. PJM proposes projects one by one, putting individual projects at political risk and losing any synergistic benefits from holistic planning.
• MISO funds all projects through a predetermined cost allocation system. PJM funds projects that support clean energy through a voluntary approach, where fossil states can simply refuse to pay, even if the transmission brings them reliability and economic benefits.

PJM may feel that, by caving to fossil interests, they are avoiding short-term legal or political risk. This calculation is a mistake. Substandard planning will cost the region billions through inefficient grid operations and lost Inflation Reduction Act opportunity. It will raise the costs and possibly delay states’ clean energy policies while slowing the region’s transition to a low-carbon economy. And for this price, PJM will not even get the protection it’s hoping for: The proposed transmission planning process is unlikely to meet basic legal standards set by FERC and the federal courts and may be more legally vulnerable than simply doing it right from the start. 

The planning process that PJM is about to begin is our last, best chance to get transmission built this decade to meet 2030’s needs. PJM must take the time to get this right.