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RTO Insider: Utility CEOs Urge PJM Board to Act on Price Formation

Posted by Christen Smith on Jan 31, 2019

RTO Insider covers the critique of utility executives and stakeholders of PJM for not addressing market pricing rule changes. The AEE perspective is given by Jeff Dennis, general counsel and managing director, who raises concerns about ensure a proper stakeholder process. See excerpts below and the entire RTO Insider story here:

Four top utility executives urged PJM’s Board of Managers to act on price formation at its Feb. 12 meeting after stakeholders deadlocked on the issue last week.

CEOs Chris Crane of Exelon, Ralph Izzo of Public Service Enterprise Group and Charles E. Jones of FirstEnergy signed a Jan. 29 letter criticizing PJM for failing to implement energy and capacity market rule changes despite a decade of stakeholder discussions. Douglas Esamann, president of Duke Energy’s Midwest and Florida regions, also signed the letter, which said PJM was lagging behind other eastern RTOs and ISOs in addressing its “woefully out of date” operating reserve demand curve.

“Specifically, PJM has not been able to adequately navigate the current stakeholder process that was initiated to address key energy market price formation issues,” they said. “As a result, critical reforms have been mired in regulatory proceedings for years…”

Aside from the RTO’s stalled price formation initiative, the executives also chastised PJM for not defining resilience attributes and reacting too slowly to fuel security concerns following the December 2018 NERC report highlighting potential risks from accelerated retirements…

Jeff Dennis, managing director and general counsel of Advanced Energy Economy, criticized the companies’ reliance on the NERC report and PJM’s own fuel security study as the basis for pushing through regulatory changes without stakeholder consensus.

“Let’s be clear — they’re trying to shortcut the stakeholder process on those issues based on two reports that make no showing of likely reliability risks in the near or immediate term, finding long-term risks in only the most extreme scenarios,” he tweeted Thursday. “If we’re going to continue the search for the black swan, let’s at least do it in an open, technology-neutral way that actually addresses demonstrated grid needs, rather than forcing discriminatory tech-specific market rules that benefit fuel-dependent resources.”

See the complete RTO Insider story here:

Topics: AEE In The News