Clean Power Plan Study: Largest US Regional Transmission Organization Is Well-Prepared to Lower Carbon Pollution without Reliability Problems

March 16, 2015

The multi-state region operated by the PJM Interconnection (PJM) - a regional transmission organization (RTO) servicing the largest competitive wholesale electricity market region in the country - is already taking reasonable and appropriate steps to ensure its electric system reliability and does not need a "Reliability Safety Valve" to comply with the US Environmental Protection Agency's (EPA) proposed Clean Power Plan, according to a study by Analysis Group energy experts. The study, "Electric System Reliability and EPA's Clean Power Plan: The Case of PJM," serves as a supplemental case study to test the assertions made in a recent report assessing electric system reliability at the national level.

The national report - "Electric System Reliability and EPA's Clean Power Plan: Tools and Practices," released February 19, 2015 - demonstrated that the design and implementation of the Clean Power Plan, which is intended to reduce the US electric system's CO2 emissions by 30 percent from 2005 levels by 2030, will not jeopardize or compromise the reliability of the US power system. In the PJM report, an Analysis Group team comprising Senior Advisor Susan Tierney, Vice President Paul Hibbard, and Manager Craig Aubuchon assessed PJM's specific situation and evaluated its current and potential steps in responding to the Clean Power Plan to discover potential lessons that might be relevant for other regions of the country.

The report demonstrates that PJM is already adapting to changing market conditions that will result in compliance with the Clean Power Plan as it transitions from coal-fired resources to natural gas-fired and wind projects: "PJM has effectively administered processes to manage this transition in a way that meets both reliability and efficiency objectives." Further, PJM has a wide variety of regional tools and resources available to address potential reliability issues associated with the retirement of power plants, changing regulations, or extreme weather conditions. The authors conclude that, "Given the robustness of existing reliability tools and the flexibility in the Clean Power Plan, we are not convinced that a Reliability Safety Valve, as proposed by PJM, is either needed or practically workable." However, the authors suggest that if such a mechanism is allowed, it should be regulated in a way that is appropriate, transparent, equitable, equivalent, and cost effective.

Read the PJM report
Read more about the national report