The High Cost Of The Cold On The Mid-Atlantic Grid

PJM Report on Cold Weather Performance Shows Grid Performed Well, Need for Pricing Reform

Feb. 26, 2018, (PJM Interconnection)

“…The grid connecting 65 million people in Mid-Atlantic and Midwestern states served well during this winter’s cold snap…Though not as severe as the 2014 Polar Vortex, the cold snap demonstrated [the PJM Interconnection’s system remains] reliable, according to PJM Cold Snap Performance…On Jan. 5, 2018, demand reached 137,522 megawatts, which is the sixth highest overall winter peak demand…[but even] during peak demand, PJM had excess reserves and capacity…[However, the report adds, the 11-fold increase in uplift charges] during the cold snap shows the need to reform pricing for energy and reserves…Uplift is paid to generators when locational marginal prices do not cover the costs of units needed to serve load. Over the last several years, uplift charges have been relatively low in PJM, averaging approximately $389,000 per day. By contrast, during the peak days of the cold snap, uplift charges averaged approximately $4.3 million per day…” click here for more

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