Pennsylvania Governor complains about PJM power market rules to regulator

Pennsylvania Governor Josh Shapiro has filed a complaint against PJM Interconnection with a federal energy regulatory agency on Monday. He argues that the U.S.'s largest power grid operator, PJM Interconnection, must change their market rules to avoid escalating electricity prices.

PJM Interconnection has been under increased scrutiny since July when it announced that its annual capacity auction will result in record-high payment to power plants within its system.

In a complaint filed to the Federal Energy Regulatory Commission, Shapiro, a Democrat and the Commonwealth of Pennsylvania stated that it was "difficult to avoid the conclusion" that PJM’s capacity market currently fails.

The complaint argues that PJM’s capacity market price cap, which is set at an unreasonably low level, will add billions of dollar to electricity bills, while not increasing grid reliability. The complaint stated that if certain market rules are not changed, ratepayers in the PJM area could face an increase of up to $20.4 billion in costs.

PJM paid power generators 900% more in the last auction than the year before. The company attributed the price increase to the tightening of power supplies and the rising demand for electricity.

Homes and businesses within PJM territory will pay for at least a portion of these costs.

"This is fundamentally a supply/demand issue that leads to high consumer prices, driven primarily through policy choices that push resources out of the system along with growth in data centers and electrification demands," PJM spokesperson Susan Buehler stated.

(source: Reuters)