On Sept. 27, PA Chamber Director of Government Affairs Kevin Sunday delivered testimony to the House Environmental Resources and Energy Committee regarding recent changes to PJM’s electricity market rules. PJM is the largest, organized grid in the world, serving 13 states including Pennsylvania and more than 65 million Americans. Pennsylvania is the largest power producer and energy exporter on the PJM grid.
Other testifiers were PJM’s Vice President for State Policy and Member Services Asim Haque, PA Public Utility Commission Chair Gladys Brown Dutrieulle, P3 President Glen Thomas and PJM Independent Market Monitor Joe Bowring. Sunday provided an overview of the significant economic and environmental benefits that Pennsylvania as gained through competitive markets. Sunday also noted that PJM was in effect reacting to significant dysfunction and volatility at PJM’s regulator, the Federal Energy Regulatory Commission. As a result, the operations of utilities, retail power companies and power generation operators have all been disrupted.
Sunday advised the committee that its best next steps are to continue to support investment in pipelines, and to encourage the U.S. Senate to strike a moderate tone during its deliberations over the nomination of the fifth and final FERC Commissioner, Willie Phillips. Sunday also noted it may be prudent for the legislature, PUC and stakeholders to hold further discussions about additional market pricing reforms to ensure that sufficient baseload generation can economically dispatch power with an increasing share of renewables coming online.
The specific changes to PJM’s rule concern the “Minimum Offer Price Rule,” which account for how power plants seeking to bid into the capacity auctions must consider any state policy that supports their operations. The current chairman of the FERC, Richard Glick, in effect ordered PJM to make changes to MOPR just a few years after significant reforms to the same policy were instituted. The following day, the changes to MOPR took effect and will now be in place for future capacity market auctions.