PA Chamber Endorses Changes To PJM Electricity Market Pricing Rules

On February 27, the PA Chamber of Business and Industry President and CEO Gene Barr issued the following statement regarding changes to the electricity market auction rules being proposed by the regional grid operator, PJM Interconnection.

The proposal, addressing reserve pricing and procurement in regional energy markets, will soon be sent to the Federal Energy Regulatory Commission for formal consideration.

“Over the past two years, electric generation companies that own and operate nuclear power plants in Pennsylvania have put the spotlight on the challenges facing these facilities.

“These challenges are not unique to Pennsylvania – other states in the 13-state PJM territory have experienced them as well, and have enacted legislation and policies to prevent the premature closure of nuclear facilities.

“It is clear that this is a regional issue, not just a Pennsylvania problem, and therefore we are concerned with any legislative remedy that puts the burden solely on Pennsylvania families and businesses. Given that Pennsylvania is a net exporter of power, a regional solution is necessary.

“Therefore, the PA Chamber is endorsing PJM Interconnection’s proposed changes to its energy market pricing rules and urges FERC to approve the changes as soon as possible.

“These rules would compensate power generation facilities for costs and attributes previously unrecognized in pricing rules – a concern raised by plant operators at hearings convened by the General Assembly’s joint legislative Nuclear Caucus – without unduly burdening Pennsylvanians.

“Among the other issues facing the nuclear industry identified by the Nuclear Caucus was an unlevel playing field, including preferential tax and energy policy favoring particular resources.

“Of note, Pennsylvania’s 2004 Alternative Energy Portfolio Standards Act directs 18 percent of the market to particular resources at the cost of tens of millions of dollars per year by ratepayers. Our organization opposed this legislation from the outset out of concern it would distort the market – as it very clearly has.

“We have and will continue to embrace and champion competitive markets. In the two decades since Pennsylvania passed the Electric Generation Customer Choice and Competition Act, ratepayers have benefitted from the resulting billions of dollars in lower utility costs and a cleaner environment.

“It is vital, however, that as competition unfolds in electricity markets, power generation facilities are appropriately compensated. We believe PJM’s proposed pricing rules will achieve that, and as such, we endorse this proposal and urge it be approved quickly.”


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[Posted: March 1, 2019]


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