Explaining Power Plant Retirements in PJM
Power plants are retired for many reasons. Sometimes, plants can no longer compete in a market with other, more efficient resources. In other cases, power plants cannot upgrade to comply with environmental regulations and remain competitive or are required to retire by law. Rising maintenance costs and the age of the plant are also factors.
PJM has no vested interest in keeping a plant running or shuttering them. One of PJM’s jobs is to ensure the continued reliability of the high-voltage electric transmission system when generation is deactivated. As part of that mission, PJM identifies transmission solutions that allow owners to retire generating plants as requested without threatening reliable power supplies to customers.
PJM may order transmission upgrades or additions built by transmission owners to accommodate the generation loss. PJM has no authority to order plants to continue operating. However, in some instances, to maintain reliability, PJM may formally request that a plant owner continue operating, subject to FERC-authorized rates, while the transmission upgrades are completed.
Plant owners considering retirement must notify PJM at least two quarters before the proposed deactivation date. PJM and the transmission owners complete a reliability analysis in the subsequent quarter after notification to PJM.
Retiring a power plant can take months or sometimes years. It can also happen that generation owners decide to rescind their deactivation request and keep a plant operating. PJM provides a Generation Deactivations page where visitors can search by state, fuel type, transmission owner zone, reliability analysis status or generating unit’s name.
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) | (WEB) and Manual 14D (PDF) – Generator Operational Requirements.