1.0Citizens Utility Boardhttps://www.citizensutilityboard.orgrich600338<blockquote class="wp-embedded-content" data-secret="qp3V6EkHjd"><a href="https://www.citizensutilityboard.org/blog/2024/11/06/pjm-broke-the-capacity-auction-but-heres-how-they-can-fix-it/">PJM broke the capacity auction–but here’s how they can fix it</a></blockquote><iframe sandbox="allow-scripts" security="restricted" src="https://www.citizensutilityboard.org/blog/2024/11/06/pjm-broke-the-capacity-auction-but-heres-how-they-can-fix-it/embed/#?secret=qp3V6EkHjd" width="600" height="338" title="“PJM broke the capacity auction–but here’s how they can fix it” — Citizens Utility Board" data-secret="qp3V6EkHjd" frameborder="0" marginwidth="0" marginheight="0" scrolling="no" class="wp-embedded-content"></iframe><script type="text/javascript"> /* <![CDATA[ */ /*! This file is auto-generated */ !function(d,l){"use strict";l.querySelector&&d.addEventListener&&"undefined"!=typeof URL&&(d.wp=d.wp||{},d.wp.receiveEmbedMessage||(d.wp.receiveEmbedMessage=function(e){var t=e.data;if((t||t.secret||t.message||t.value)&&!/[^a-zA-Z0-9]/.test(t.secret)){for(var s,r,n,a=l.querySelectorAll('iframe[data-secret="'+t.secret+'"]'),o=l.querySelectorAll('blockquote[data-secret="'+t.secret+'"]'),c=new RegExp("^https?:$","i"),i=0;i<o.length;i++)o[i].style.display="none";for(i=0;i<a.length;i++)s=a[i],e.source===s.contentWindow&&(s.removeAttribute("style"),"height"===t.message?(1e3<(r=parseInt(t.value,10))?r=1e3:~~r<200&&(r=200),s.height=r):"link"===t.message&&(r=new URL(s.getAttribute("src")),n=new URL(t.value),c.test(n.protocol))&&n.host===r.host&&l.activeElement===s&&(d.top.location.href=t.value))}},d.addEventListener("message",d.wp.receiveEmbedMessage,!1),l.addEventListener("DOMContentLoaded",function(){for(var e,t,s=l.querySelectorAll("iframe.wp-embedded-content"),r=0;r<s.length;r++)(t=(e=s[r]).getAttribute("data-secret"))||(t=Math.random().toString(36).substring(2,12),e.src+="#?secret="+t,e.setAttribute("data-secret",t)),e.contentWindow.postMessage({message:"ready",secret:t},"*")},!1)))}(window,document); /* ]]> */ </script> By Clara Summers, Campaign Manager Consumers for a Better Grid (a project of CUB) The electricity price for Illinois’ largest power utility, Commonwealth Edison, will go up significantly next summer because of a recent auction to secure reserve power. Grid operator PJM announced that its recent “capacity” auction sent prices skyrocketing from $28.92 per Megawatt-day to a record $269.92 per MW-day.  Such capacity costs make up a portion of the price of electricity, so this is expected to cause ComEd bills to increase starting in June of 2025.  Why are the prices so high? The Market Monitor for PJM said “the [] prices do not solely reflect supply and demand fundamentals but also reflect, in significant part, PJM decisions about the definition of supply and demand[.]”  But if supply and demand weren’t to blame, what was? Well, it’s complicated: There are multiple root causes–and  each demonstrates a different failure of PJM leadership.  But just as the causes are in PJM’s hands, so are the solutions… Root Cause 1: A Perfect Storm of Interconnection and Auction Delays PJM’s capacity market is supposed to operate under a “three-year forward” mechanism. That means PJM holds auctions to buy reserve electricity three years in advance of when it’s needed. So when lower supply sparks higher auction prices, generators will then have ample time (three years) to respond to that signal and build new power plants.  Unfortunately, 2018 was the last time PJM held a three-year forward auction. Today, auctions happen on a drastically compressed schedule.  For example, PJM’s July auction secured reserve power for just 11 months into the future, June 2025–not enough time for new generating resources to build and connect to the grid.  That would be true even if PJM  were quick to get resources online–but it’s not, and that’s the other problem. PJM is infamous for having one of the nation’s slowest interconnection queues. The “queue” is the waitlist for new electric resources seeking review and approval by PJM so they can be connected to the grid.  Unfortunately, there are more renewable resources waiting in line than all of the resources currently powering PJM’s vast 13-state region.  As it processes this massive backlog, PJM isn’t renewing any new interconnection applications until 2026, at the earliest. Some projects have sat in the queue for so long (5 or more years) that they have lost financing or site permissions, and so they drop out of the process before PJM even reviews them.  In this frustrating situation–with a key part of the clean energy transition on hold–everyday electric customers will pay for higher capacity prices on their electric bills without  getting any benefit for those payments. High prices + failure to get resources online quickly = bad news for ratepayers. What does PJM need to do? Get back on schedule and bring more generation online. First, PJM should fully comply with FERC Order 2023, which laid out new standards for interconnection processing. PJM has been foot-dragging on compliance, asking for exceptions to a number of these standards, including realistic treatment of battery storage, a technology that could be a huge help in easing these […]https://www.citizensutilityboard.org/wp-content/uploads/2020/09/500kV_3-Phase_Transmission_Lines-300x169.png