Key Takeaways
Last week, U.S. Secretary of Energy Chris Wright (Secretary) issued two orders under the Federal Power Act (FPA) Section 202(c), determining that emergencies exist in the grids operated by PJM Interconnection (PJM) and the Midcontinent Independent System Operator (MISO). The Secretary’s orders, No. 202-25-3 (PJM Order) and No. 202-25-4 (MISO Order), require the continued operation of a natural gas plant in PJM and a coal-fired plant in MISO that were otherwise slated for retirement.
These orders come on the heels of President Trump’s April 9, 2025, executive order, “Strengthening the Reliability and Security of the United States Electric Grid” (EO), which directed the Secretary to address what it identified as reliability risks from “an unprecedented surge in electricity demand.” The EO is targeted at ensuring that the grid uses all available power generation, including “redundant fuel supplies that are capable of extended operations.”
- Broadly, the EO seeks to maximize the Secretary’s authority to issue orders under Section 202(c) of the FPA, which provides the authority to require temporary connections of facilities and the generation, delivery, interchange, and transmission of electric energy “[d]uring the continuance of any war in which the United States is engaged” or when the Federal Energy Regulatory Commission (FERC) determines that “an emergency exists by reason of a sudden increase in the demand for electric energy, or a shortage of electric energy or of facilities for the generation or transmission of electric energy.”[1]
- Section 202(c) overrides other federal, state, and local environmental laws for up to 90 days as necessary to address a shortage of electricity, and the Secretary may renew or reissue its orders for subsequent 90-day periods.[2]
Both the PJM Order[3] and the MISO Order[4] determined that an emergency existed in each grid due to “a shortage of facilities for the generation of electric energy.”[5] In addition to discussing the general trend of retirement of certain generating assets in each grid, the PJM Order and MISO Order both identify specific generating units slated for retirement that the relative grid operator and owner must allow to continue to operate.[6]
The PJM Order
The PJM Order noted the planned retirement of Constellation Energy’s Eddystone Generation Station Units 3 and 4 (Eddystone Units), PJM’s indication of possible reserve shortfalls, PJM’s attempts to address near-term adequacy concerns through tariff revisions, and other reports from PJM concerning reliability risks.[7] For example, the PJM Order notes PJM’s forecasts of high summer peak demand and a report from PJM discussing “increasing reliability risks during the transition, due to a potential timing mismatch between resource retirements, load growth and the pace of new generation entry[.]”[8] According to the PJM Order, the U.S. Department of Energy's (DOE) determination of an emergency was based on, among other things:
- “The emergency nature of the potential load stress due to aforementioned resource adequacy concerns, and the potential loss of power to homes and local businesses in the areas that may be affected by curtailments, presenting a risk to public health and safety.
- The potential shortage of electric energy, shortage of facilities for the generation of electric energy, and other causes in the region support the need for the Eddystone Units to contribute to system reliability.
- PJM’s responsibility to ensure maximum reliability on its system, and, with the authority granted in this Order, its ability to identify and dispatch generation, including the Eddystone Units, necessary to meet the load demands.”[9]
The PJM Order:
- Notes that DOE plans to evaluate the Eddystone Units in its uniform methodology for analyzing current and anticipated reserve margins for all regions of the bulk power system regulated by FERC.[10]
- Requires PJM and Constellation Energy to “take all measures necessary to ensure that [the] Eddystone Units are available to operate” while minimizing environmental impacts and costs to ratepayers.[11]
- Requires certain daily reporting from PJM, requires Constellation and PJM to file with FERC necessary tariff revisions or waivers to effectuate the PJM Order, and notes that rate recovery is available.[12]
The PJM Order expires on August 28, 2025.[13]
The MISO Order
The MISO Order noted potential tight reserve margins and reserve shortfalls due in part to the retirement of certain coal-fired facilities and nuclear power plants in Michigan.[14] Specifically, the MISO Order notes that a coal-fired power plant (the Plant) in Michigan, was to cease operation on May 31, 2025.[15] According to the MISO Order, DOE’s determination of an emergency was “based on the insufficiency of dispatchable capacity and anticipated demand during the summer months, and the potential loss of power to homes and local businesses in the areas that may be affected by curtailments or outages, presenting a risk to public health and safety.”[16] The MISO Order also noted an assessment from the North American Electric Reliability Corporation (NERC) indicating an elevated risk of MISO operating reserve shortfalls based on demand forecasts and resource data.[17]
The MISO Order did not touch on whether the DOE would evaluate the Plant in its uniform methodology. Like the PJM Order, however, the MISO Order required that MISO and the utility that owns the Plant “take all measures necessary to ensure that the Plant is available to operate” while minimizing environmental impacts and costs to ratepayers.[18] Also like the PJM Order, the MISO Order requires MISO to provide daily reporting, requires the utility and MISO to file with FERC any necessary tariff revisions or waivers to effectuate the MISO Orders, and notes that rate recovery is available.[19]
The MISO Order expires on August 21, 2025.[20]
Conclusion
The Secretary may issue further orders in the coming weeks pursuant to the EO. The EO also requires the DOE to publish its methodology to identify current and anticipated reserve margins for all regions of the bulk power system regulated by FERC by July 7, 2025.[21]
Endnotes
[1] 16 U.S.C. § 824a(c)(1).
[2] 16 U.S.C. § 824a(c)(4)(A).
[3] Secretary of Energy Order No. 202-25-3 (May 23, 2025).
[4] Secretary of Energy Order No. 202-25-4 (May 30, 2025).
[5] PJM Order, at 1; MISO Order, at 1.
[6] PJM Order; MISO Order.
[7] PJM Order, at 1–2.
[8] PJM Order, at 1 (citing PJM, Energy Transition in PJM: Resource Retirements, Replacements & Risks, at 1 (Feb. 24, 2023).
[9] PJM Order, at 2.
[10] Id.
[11] Id. at 3.
[12] Id.
[13] Id.
[14] MISO Order, at 1.
[15] Id.
[16] Id.
[17] Id.
[18] Id. at 2–3.
[19] Id.
[20] Id. at 3.
[21] PJM Order, at 3.
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