PJM reports 73% higher outages than January average
Gas-fired plants in Dominion Energy zone hardest hit
Spot electricity prices exceed $1,000 per MWh due to outages
Adds details on outages, electricity prices, analyst comment
By Tim McLaughlin and Laila Kearney
BOSTON/NEW YORK, Jan 27 (Reuters) - Power plant outages on the largest U.S. regional electric grid on Tuesday were more than 70% higher than the January average, leaving a region of 67 million people with a thin buffer of energy supplies against frigid weather and a forecast for record-breaking winter demand later this week.
The PJM Interconnection, which covers 13 Mid-Atlantic and Midwest states, reported most of the generation outages are due to power plants being forced offline amid freezing weather and constricted supplies of natural gas.
Gas-fired power plants in the Dominion Energy D.N zone of PJM appeared hardest hit, with Tuesday's forecast for forced outages at the utility at nearly 9 gigawatts. That accounts for about half of PJM's total outage forecast.
The electric utility did not return messages seeking comment. Natural gas is the largest electricity fuel source in PJM, which spans the country's biggest gas-producing shale basin. In frigid temperatures, gas wells and pipelines can sometimes freeze, which was the case in a winter storm in 2022 when the grid operator narrowly avoided rolling blackouts after multiple power generators failed to deliver.
This week, PJM forecast total generation outages of about 18 GW, or 10% of its operational capacity of 180.8 GW. That level of outages is 73% higher than the average so far in January of 10.4 GW, according to PJM data.
Despite prolonged frigid temperatures and heavy snowfall across the major East Coast cities of Baltimore, Boston, New York, Philadelphia and Washington, D.C., PJM and other regional grids have avoided ordering rotating blackouts.
PJM is the biggest electricity market in the country and it covers the largest concentration of data centers in the world.
The grid's reserve margin of power supplies has declined in recent years as energy-intensive data centers proliferate in the region, largely to support an expansion of artificial intelligence.
The ultimate benchmark for PJM and any other operator, said grid expert Pieter Mul, is whether the lights stay on for customers.
"Do you keep the lights on or not?" said Mul, an associate partner at PA Consulting's energy and utilities practice. "That's always the most important question."
To be sure, there has been plenty of stress in PJM's territory this week. Generator outages and congested high-voltage transmission lines have spurred spot electricity prices to climb past $1,000 per megawatt hour over the past several days, said energy analysts at consulting firm ICF International.
Meanwhile, PJM predicted a record all-time winter demand of 147 GW on Friday, partly due to the around-the-clock electricity needs of data centers and temperatures hovering above 0 degrees Fahrenheit (-18 Celsius).
Spot wholesale electricity prices in PJM's territory averaged about $342 per MWh on Tuesday morning as power plants paid higher natural gas prices.
In the PJM zone served by Dominion Energy, spot prices were $640 per MWh, reflecting power plant disruptions that can include generator units tripping offline or producing less power because of cold temperatures.
Next-day natural gas prices at the Eastern Gas hub in Pennsylvania jumped 47% to a record $59 per million British thermal units.
(Reporting by Tim McLaughlin, Editing by Louise Heavens, Chizu Nomiyama and Chris Reese)
((tim.mclaughlin@thomsonreuters.com; +1 617-856-4409; Reuters Messaging: Tim.McLaughlin.thomsonreuters.com@reuters.net/))
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