5 days Ago By Sarah Moskowitz
Tribune readers got an unpleasant surprise recently: ComEd’s electric price is expected to spike next summer . Unfortunately, this is no surprise to the Citizens Utility Board. We’re all too familiar with electric customers paying more because of a shadowy corporate entity called PJM Interconnection and the little-known electricity “capacity auction” it runs.
Gov. JB Pritzker is aware too, which is why he publicly scolded PJM for “a complete disregard of vulnerable communities” and urged it to take “swift action” to protect customers from the spike. There is a silver lining.
Illinois’ forward-thinking clean energy policy, the Climate and Equitable Jobs Act (CEJA), gives us a blueprint for cleaning up this mess — and it will actually protect customers from part of the price spike next summer. So how did we get here? Over the summer, PJM — the largest power grid operator in the country — announced a major price spike for much of its territory in the latest “capacity auction.” The auction secures reserve power for 65 million customers across a vast region that stretches from ComEd territory in northern Illinois to the East Coast.
CUB has long argued that this auction favors generators over everyday consumers like you and me, and this is a good example: Auction winners are laughing all the way to the bank, soaking customers for $14.7 billion in costs, more than six times what they did in last year’s auction. Initial estimates are that ComEd customers will pay an extra 1.
5 cents to 2 cents per kilowatt-hour (kWh) for 12 months beginning in June. Depending on your usage, you could easily pay an extra $100 next year. That’s not good news — but it could have been worse.
Thankfully, CEJA had the foresight to include a consumer protection that delivers bill credits to most customers if energy prices go above a certain level. That won’t wipe out the increase, but it could lessen the bill impact by as much as 50%. But while CEJA has foresight, PJM does not.
As the power grid operator doubles down on policies that favor fossil fuel plants, more than 286 gigawatts of new power generation — mostly clean energy projects — are waiting to connect to the grid so they can produce power and help bring prices down. That’s more than double the electricity needed to power our region. Unfortunately, these projects wait so long for final approval in PJM’s queue — five or more years — that many are in danger of never getting built.
Advocates have identified a deep toolbox PJM could use to make sure the grid stays reliable and affordable for everyday electric customers. To name a few helpful tools: Fully implement new federal rules for wise long-term transmission planning, treat battery storage like the asset it is and make efficient use of our grid, whether it’s letting multiple resources share an interconnection point or transferring the rights of retiring power plants to new, cheaper and cleaner resources. Editorial: An electricity crisis is looming for Illinois.
Is anybody paying attention in Springfield? But instead of implementing practical solutions, PJM is keeping a polluting coal plant in Maryland from retiring, at enormous cost to consumers. While local Maryland communities will pay the brunt of the costs for this coal plant, the way PJM treats this arrangement in the auction drove up our regionwide prices. In fact, PJM’s independent market monitor says the price spike was not caused by supply and demand fundamentals, but by how PJM manages its auction.
The PJM board has finally agreed to revisit its flawed market rules before the next auction. There’s a lot of work to do, but the answer is not for PJM to continue relying on its old playbook of promoting expensive and unreliable power plants. PJM needs to fix its broken market rules, stat, and then do its job: Process all those projects that have been waiting in line.
You don’t solve our capacity problems with a horse-and-buggy mentality. Sarah Moskowitz is executive director of the Citizens Utility Board, a nonprofit group that advocates for Illinois utility customers. CUB is challenging the Illinois American and Aqua increases before the Illinois Commerce Commission.
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