Storms provided challenges, but a bounty of cheap natural gas brought consumers lower prices in 2012, PJM officials said in their Year in Review presentations at the annual meeting.
“The weather was relentless, but PJM and its members rose to the occasion,” said CEO Terry Boston.
The June 29 derecho, a 600-mile series of storms, took out 90 high voltage and extra high voltage transmission lines, leaving 4.2 million customers without electricity.
Hurricane Sandy, Oct. 29, was even more damaging, causing 40 generators to trip and knocking out 142 transmission lines and interrupting service for 5 million. “The system is rated for N-1,” said Boston. “We ended up with N-142 elements out on the transmission system.”
Load in the MidAtlantic dropped to 15,000 MW, 6,000 MW below normal. In 25 years at PJM, said PJM Senior Vice President of Operations Michael Kormos, it was the first time he ever saw power flowing west to east over PJM’s high voltage lines.
The good news? “We’re much better at emergency planning than we were before the storm,” Boston said. “Drills are one thing. Actually doing it is something else.”
Prices, Emissions Lower from Cheap Gas
The PJM markets, meanwhile, were driven by the natural gas’s increasing market share.
Gas rose to nearly 20% of the fuel mix for electricity production, while coal dropped to 42%. The shift helped reduce PJM’s CO2, SO2 and NOX emissions per MWh to new lows.
PJM membership rose to a record 797 as of Dec. 31, 2012, up from 738 the year before. But PJM Market settlements volume dropped to $29.18 billion in 2012 from a record $35.89 billion in 2011 as the average wholesale cost dropped to about $48/MWh from almost $63.
“Is that sustainable?” Andy Ott, Senior Vice President of Markets asked. “I leave that to you.”
Market Monitor Joseph Bowring gave his answer in his own presentation, noting that power prices rose 20% in the first quarter of 2013 versus the same period in 2012, pushed by increasing gas costs.
