PJM stakeholders at Wednesday’s Markets and Reliability Committee meeting endorsed a series of temporary manual changes regarding minimum fuel requirements during emergency operations.

The RTO said the revisions to Manual 13 were based on fuel availability issues hitting companies and countries around the world and are aimed at maintaining reliability in the face of possible extreme weather conditions.

The changes, which were endorsed in a rare same-day first read and vote at the MRC, state that PJM may request a generation owner to move steam units, which are mostly coal-fired, into the maximum emergency category if their remaining run time falls below 240 hours, or 10 days. The units could be restricted from operating during that time unless required to meet reliability needs for the grid.

Units could remain in maximum emergency status until their fuel inventory rose above 21 days, or 504 hours. The designation would only be implemented to address concerns with local or regional reliability resulting from fuel supply shortages.

The previous run-hour threshold for maximum emergency was 32 hours.

Mike Bryson, PJM’s senior vice president of operations, said the RTO recognized it was “unusual” to ask for a first read and endorsement of a manual item on the same day at the MRC, but it was important to act now instead of during next month’s MRC meeting because waiting would “make the inventory issue worse.”

The RTO started hearing about fuel supply issues in August, Bryson said, with rising natural gas prices and limited coal inventories. He said it has conducted data requests with units to “get a handle” on current fuel supplies.

“PJM is concerned, both on the industry-wide issues and general inventories, particularly of coal, going into the winter,” Bryson said.

The changes are only temporary, Bryson said, focusing on the 2021-2022 winter season. PJM is looking to have stakeholder discussions to examine “longer-term tools” to implement for fuel security issues.

Bryson said PJM realizes that it’s the generator’s responsibility of “managing this risk” of fuel security and have “heard that clearly” from the generators the RTO has talked to about supplies.

“We do recognize this may not be the ideal tool, but it is something we can implement prior to winter operations without a waiver or FERC filing,” Bryson said. “We think it’s important that we have an additional tool going into the winter.”

Chris Pilong, director of PJM’s operations planning department, said the manual revisions are a “reliability backstop” and the “last tool we potentially have” in case of a fuel shortage emergency. The changes wouldn’t be used as the primary tool for PJM to manage fuel inventories, he said, but the RTO wanted to take every possible action to ensure reliability this winter. “Given the escalation of the concerns we’ve been hearing have ramped up significantly over the last few weeks, we feel it very prudent to take action immediately to make sure we’re prepared.”

The manual changes were partially a result of lessons learned from the February winter storm’s impacts in Texas.

Stakeholder Opinions

Though they ultimately approved them, stakeholders raised several concerns about the changes, saying they could impact current market incentives or exempt affected generators from performance requirements and penalties.

Susan Bruce, counsel to the PJM Industrial Customer Coalition (ICC), said she appreciated the “reliability imperative” in the changes, but the ICC viewed them as “pretty significant” without much time to debate the ramifications.

Bruce said they presented potential “concerns” for portfolio owners on transparency issues. She asked if the changes involve a “discretionary action” if a resource “can be placed” into max emergency or if it “will be placed” at PJM’s direction.

“In my mind, they’re two very different scenarios,” Bruce said.

Pilong said the language was developed to be on the “flexible side,” as in depending on the situation. He said the 10-day provision allows PJM to have discussions with the resource owner to determine if there are concerns about reliability or the ability to replenish fuel.

“It’s very evident that not every situation falls nice and neatly into the perfect, same box,” Pilong said.

Jeff Whitehead of Eastern Generation said stakeholders have spent a lot of time discussing fuel security issues over the last few years in PJM. He said he had the sense similar fuel shortage scenarios had been examined.

Whitehead said it may be necessary for PJM to come back with more education on emergency scenarios and seasonal fuel security issues.

“I’m a little surprised we’re here, frankly,” Whitehead said.