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Pritzker recently joined Pennsylvania Gov. Josh Shapiro, New
Jersey Gov. Phil Murphy, Maryland Gov. Wes Moore and Delaware
Gov. John Carney in penning a letter to PJM that addresses the
impact the development is having on consumers following the
region’s capacity auction.
“No one should have to worry about not being able to afford
their electricity bill, especially as we approach colder
months,” Pritzker said in a news release. “PJM’s record-high
price increases showcase a complete disregard of vulnerable
communities across state lines and they must take swift action
to prevent our residents from paying billions more than is
necessary.”
Energy scientist and Federal Energy Regulatory Commission
complainant Mike Jacobs joins the governors in openly
questioning how long such a system is sustainable.
“The PJM organization operates with very little government
supervision and we have some strange state and federal dynamics
that work when the state leadership in the governor's offices
brings this kind of letter forward,” Jacobs told The Center
Square. “PJM runs an auction normally once a year that puts
those prices in place. The new auction results were $12 billion
higher and they were rushing forward to create another auction
in January.”
For the 2025/2026 Delivery Year, clearing prices have now jumped
to rates nearly 10 times higher than the year before, again
prompting Jacobs to sound the alarm.
“We already know the consumers in Pennsylvania, Maryland and New
Jersey are going to pay at least $5 billion more in the coming
year because of this,” he said. “Then, we are going to repeat
that year after year for about three more years and that all
comes out of consumers' pockets and goes into the power plant
owners' pockets.”
Among the reforms being proposed by Pritzker and the company are
lowering the capacity price back to the level it was prior to
recent market reforms, implementing a sub-annual capacity market
that could reduce risk on transmission and ensuring that
capacity from Reliability Must Run units is included in the next
Base Residual Auction, which could save consumers as much as $5
billion.
The governors are also calling on PJM to adjust the years-long
process that companies are required to go through in order to
connect new power generation to the grid, essentially arguing a
lack of competition also leads to higher prices and less
economic growth. |
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