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What We Learned from the December 2022 Deep Freeze: Donít Rely on Natural Gas When Itís Fracking Cold (Part 1)

As the 2022 holiday weekend approached, a developing winter storm promised to bring severe cold weather to Pennsylvania. It’s in these moments that our infrastructure—particularly our energy grid—is needed most and is stress tested. Unfortunately, our grid staggered, nearly leaving our homes in the cold and dark.

The 2022 winter storm is an event that should bring a critical eye to Pennsylvania’s increasingly gas-reliant energy mix. Otherwise, we will continue the slide towards becoming an expensive energy state, consistently threatened with energy instability wile energy generators are unfairly enriched.

December 21

With forecasts looking ominous, PJM Interconnection LLC (PJM)—the regional energy grid operator that manages Pennsylvania—issued a Cold Weather Alert.  At that time, gas generators should have been alerting PJM if they foresaw problems buying gas on the spot market to support increased consumer demand.

PJM’s plan to ensure we have the power we need is to purchase “capacity” in addition to energy.  The way the system works, generators who clear the capacity auction get paid to be available, whether they are called on to run and sell energy or not. For the 2022 delivery year, those payments totaled about $4 billion. Generators who take this money face steep penalties if they are unable to deliver energy when called so, in theory, companies have an incentive to invest in preventative maintenance, winterization, and other measures to improve reliability and be ready when we need them the most—at least, that is the plan.

December 23

PJM’s models forecast a need for 127 gigawatts (GW), but there was a lot of uncertainty. Power plants are complicated and, even in normal times, they are unavailable when called upon about 5 percent of the time. This forced outage rate—in other words, the number of power plants not running when they were supposed to—gets higher in extreme weather, climbing to around 10 percent. In addition to worries about forced outages, there is uncertainty predicting the weather and, in this case, uncertainty how demand might change on a holiday weekend. Rather than the 3GW of reserve, back-up capacity that PJM normally considers adequate, the grid operator planned for 29 GW. 

Temperatures plummeted, dropping 29 degrees over a 12-hour period—a steeper decline than the historic 2014 polar vortex.  With those crashing temperatures, the demand for energy soared, peaking about 10 percent higher than the forecast of 139 GW.  The 29 GW of reserve capacity should have been more than enough to cover the demand—if the planned capacity could deliver. Unfortunately, the forced outage rate started to rise. 

Early in the morning on Friday, December 23, there were about 12 GW of forced outages. By late Friday night, that climbed to 34 GW.

December 24

Forced outages peaked at 46 GW. Failures not only included the “expected” 10 percent of generators that PJM called to run; over 23 percent of PJM’s total capacity was unavailable. Worse yet, PJM had little or no notice these plants couldn’t run—in 92 percent of cases, they had less than one-hours’ notice and, in some cases, no notice at all.

PJM resorted to a suite of emergency procedures. Most glaring to the average Pennsylvanian were the reports on the news that households were asked to “voluntarily” reduce electricity on Christmas Day. PJM was also calling up idling synchronized reserve generators, issuing voltage reduction warnings, and obtaining permission for plants to exceed their emissions limitations, if they had to. PJM even became a net importer of power for a period, relying on neighboring grids to fill in supply gaps. By and large, the lights stayed on, if just barely, but it came at a staggering cost.

With demand outstripping supply, the costs to consumers soared. Wholesale prices for energy vary, but they are generally under $50 a megawatt-hour (MWh) and often under $30/MWh.   For comparison, average retail electric prices (which includes local utility charges) were about $100/MWh in PA in 2021.  During this event, PJM saw wholesale prices for energy peak at $4,300/MWh—essentially as high as the system is designed to go.

What this means is that energy purchased by utility companies during the holiday weekend were paying up to 1,000 percent more for that energy than normal—a cost that will certainly be borne by consumers in some way.

What went wrong?

PJM is expected to issue a full report in mid-April, but preliminary data shows that about 70 percent of the forced outages came from fracked gas plants not operating like they should have . Gas makes up about 50 percent of PJM’s generation with over 86 GW installed. At the peak of the crisis on December 24, its forced outage rate was over 37 percent with over 32 GW offline.

Coal was having problems, too, with a forced outage rate of about 16 percent (7.5GW).  While the industry touts itself as “fuel-secure” because piles of coal often sit at the plant and they don’t rely on pipelines, they still contend with frozen coal piles, supply-chain issues, and maintenance problems at decades-old plants that cause more than their share of outages.

PJM’s “other” category, which includes nuclear power and renewables, performed largely as expected with a forced outage rate of about 10 percent.  In fact, when the data is in, we expect it to show that wind generation performed far better than what PJM had planned.

Claims that fracked gas is a reliable energy source have been circulating for years and, even as recently as 2017, PJM itself suggested that as much as 86 percent gas-fired generation on our grid could maintain reliability.  Hypotheticals aside, in December 2022 fracked gas wasn’t reliable when we needed it, and consumers ended up paying steep costs for that failure.  The key question is why.

Stay tuned for Part 2: How Fracked Gas Failed Pennsylvania.

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