Explaining Power Plant Retirements in PJM


Generation Deactivation
Generation Deactivation
Generation Deactivation
Generation Deactivation
Generation Deactivation

Competition from low-cost shale gas is one reason leading to power plants retiring (also called power plant deactivations). The cost to mitigate emissions, to comply with environmental policies, is another reason some generating units retire.

PJM has no authority to order generating plants to continue operating. PJM’s mandated responsibility is to ensure the reliability of the high voltage electric transmission system. One way PJM does this is to identify transmission solutions that allow owners to retire generating plants as requested without threatening reliable power supplies flowing to homes and businesses. PJM has no vested interest in either keeping a plant running or closing down, but must make sure the transmission system continues working without issue.

PJM uses a standard set of criteria to identify potential transmission system problems due to a specific generator retiring. To keep the grid reliable, PJM orders transmission upgrades or additions to be built by Transmission Owners, to accommodate generating plant retirements. The sooner the generating plant owner informs PJM of its intent to retire a plant, the sooner PJM can study the transmission system and mandate upgrades if necessary.

Generators retiring could mean that transmission upgrades are needed to keep electricity flowing freely over the transmission lines in the generators’ specific areas.

Generator retirements and any required system upgrades to keep the grid running smoothly are included in the PJM Regional Transmission Expansion Planning process and are reviewed with PJM members and stakeholders during the PJM Transmission Expansion Advisory Committee presentations. Generation retirements are covered in detail in the Open Access Transmission Tariff (PDF) and Manual 14D (PDF) – Generator Operational Requirements.