The largest power grid in the United States just issued a federal alert because it might run out of the thing it exists to provide. PJM serves 67 million people across the Mid-Atlantic and can't keep the lights on. This is like McDonald's running out of obesity.
Federal regulators had to step in and tell adults to use less electricity. Not because of a hurricane. Not because of a terrorist attack. Because the grid operator looked at its own supply and demand spreadsheet and realized it failed at spreadsheets.
Sixty-seven million people now depend on their neighbors turning off the air conditioning so they can charge their phones to read news about how the grid is collapsing. The system works.
PJM's emergency protocol is basically a group text asking everyone to pretty please stop using power before someone's grandma dies in a heatwave. Professional stuff. Really inspires confidence in critical infrastructure.
The Mid-Atlantic region includes Washington D.C., which means there's a non-zero chance a Senator will draft legislation about grid reliability while his own office runs on backup generators. That bill will be eleven hundred pages and rename a post office.
Retail traders are currently searching for PJM's ticker symbol so they can buy calls on blackouts. They will discover it's not a publicly traded company. Then they'll buy calls on Generac instead and act like they understood energy markets the whole time.
The grid serves the South, where it's hot, and the Mid-Atlantic, where it's also hot, and D.C., where the only thing hotter than the weather is the rate at which infrastructure spending disappears into consulting fees.
Emergency actions to avoid blackouts used to mean firing up extra generators. Now it means begging 67 million people to stop living their lives. Progress.
PJM could solve this by building more capacity, but that would require planning further ahead than next quarter's earnings call. Oh wait, they're not even a public company. They're just incompetent for free.
Photo by Mudit Agarwal on Unsplash
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