3 Proposed NJ Gas-Fired Plants Clear PJM Cartel Auction

PJM has been fighting NJ’s efforts to become self-sufficient in electrical generation.  PJM officials have been claiming that state subsidies were distorting electrical markets, while PJM executives have been pushing their own subsidized transmission projects.  Now NJ has been vindicated.  All three of their proposed gas-fired plants cleared last week’s PJM capacity auction and have been admitted to the cartel’s generation sources in three years.

Here’s the story.

PJM officials, of course, were gracious in apologizing for their past mistakes:

The results, however, were a victory for New Jersey officials, who have pressed for more aggressive efforts to develop new power generation in the state.

In a press release issued late in the afternoon, the Christie administration said it was happy to see that three natural gas-fired plants cleared the capacity auction. “This is fantastic news for ratepayers as it advances the Christie administration’s goals of increasing grid reliability, reducing energy costs, cleaning the environment and enhancing the economic competitiveness of New Jersey.”

Andy Ott, a senior vice president of PJM, told reporters yesterday in a morning conference call the surge of new generation is driven by the expected retirement of 14,000 megawatts of existing power plants, largely because of tougher environmental regulations.

In the call, Ott declined to comment on specific plants that cleared and failed to clear in the auction, even though some companies, such as FirstEnergy Corp., had announced in filings with the Securities and Exchange Commission on Friday that 400 megawatts of peaking plants — those that provide capacity at times of highest electricity demand — failed to clear the auction.

The secrecy reflects the opaque nature of the system designed to procure needed capacity to provide reliability, known as the Reliability Pricing Model auction. The process has come under intense criticism from state regulators in New Jersey and elsewhere for needlessly spiking consumers’ electric bills. In New Jersey, ratepayers absorb an extra $1 billion each year because of the system.

Oops.  Sorry.  No apology from PJM.

Even though the plants cleared the auction, the two with state-sponsored subsidies still need to clear additional hurdles. The state’s pilot program to use ratepayer payments to make the projects viable is under challenge in the federal courts.

And who is challenging them in the federal courts?  PJM, of course.

Throughout the TrAIL power line case at the WV PSC back in 2007, citizens and expert witnesses testified that TrAIL would not be needed if more generation capacity were built on the East Coast.  PJM engineers whined that they only controlled transmission lines, and couldn’t do anything about increasing generation in the PJM region – that was a matter for the “free” market.  Except that it wasn’t.  As part of the deregulation of the electricity industry, FERC put regional transmission organizations like PJM in charge of auctions that controlled investment in generation.  PJM designed auction systems that favored power companies that already operated plants in its regions.  These power companies also happened to be the dominant members of PJM.

So the disingenuous testimony from PJM witnesses in the WV TrAIL case were just a smokescreen for PJM’s Project Mountaineer agenda.  Although the Christie administration worked hard to promote the Susquehanna-Roseland Project Mountaineer project, NJ’s push to build new power plants will crush any AEP/FE plans to revive the PATH zombie.

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