NJ Legislators Introduce Bill To Take First Steps To Exit PJM Grid
Leaving PJM Grid Would Save NJ Consumers Billions Of Dollars While Accelerating Transition to Cheaper And Cleaner Renewables
Legislation Should Also Include A "Public Power Option" To Compete With The Private Sector
Finally! And we hope that this is the beginning of the end.
The American Public Power Association reports:
New Jersey Assembly Democrats recently introduced legislation that would direct the New Jersey Board of Public Utilities to work with neighboring states to explore alternatives to the PJM Interconnection’s capacity and transmission market.
Bill A5902 is Sponsored by Assembly members Robert Karabinchak, Dave Bailey, Jr., and Lisa Swain. A news release about the bill said the measure was proposed “in response to mounting frustrations over rising electricity costs and regulatory misalignment.”
Under the bill, the BPU would be tasked with working collaboratively with neighboring states to research and recommend collective action to:
Require any load serving entity in New Jersey to demonstrate that it has contracted for at least 80 percent of the capacity needed to serve customers for at least five years into the future;
Withdraw from PJM’s capacity market and develop a multi-state compact to replace the capacity market with a fixed resource requirement model; and
Explore the feasibility of withdrawing from PJM’s high-voltage electric transmission grid entirely either by joining a different regional system or establishing a New Jersey-led grid.
The Assembly version passed the full Assembly on June 30 by a vote of 68-10, so it looks like this has strong support, is moving quickly, and is viable.
Assembly passage led to the June 30 introduction of a Senate version (S4693), which is co-sponsored by Senate Environment Committee Chairman Bob Smith. Smith recently accused PJM of "corruption" in the most recent PJM capacity charges and power auction that produced the current NJ 30%+ price spike.
Because Smith's bill came after the Assembly passed their version, it is not clear whether Smith actually supports the concept of leaving PJM or whether he is sponsoring the bill just to control or possibly sabotage the Senate version. And I don't trust Smith's co-sponsor Senator Burzichelli.
We've written Chairman Smith many times in recent months to urge that he sponsor legislation to leave the PJM grid and either join with NY State's grid or adopt an independent NJ State grid. The legislative findings in the bill very closely follow our recommendations to him (see this most recent post) - and these recent posts:
Smith has not responded to any of those emails.
While I'm now marginalized as a critic, I've previously worked closely with Smith on many successful legislative initiatives - including the Highlands Act - so one would think that he or his Office would shoot me an email when the bill was introduced, if only to shut me up!
We've been calling for a PJM Exit for years, primarily due to the high costs resulting from PJM's "capacity market" and "single clearing price auction" and PJM barriers to delay grid connections for cheaper and cleaner renewable energy sources.
Back in 2011, we wrote:
2. Huge Industry Subsidies Hidden in “Capacity Payments”
To provide “incentives” (subsidies) to build even more costly excess capacity, to assure that the power generation is located nearby the sources of energy demand, and to promote grid reliability, PJM imposes what are called “location based” “capacity payments“.
NJ consumers pay more than $1.2 billion per year in these charges, which dwarf RGGI and SBC charges.
The huge costs of the PJM capacity payments makes Governor Christie’s attacks on solar subsidies, costs of RGGI, and SBC Clean Energy program seem absurd and disingenuous, no?
We followed up in 2013 with this focus on "capacity charges":
While many whine about the so called “high costs” of and consumer subsidies for renewable power, the above table shows how NJ residents and businesses paid over $1 BILLION in what are known as “capacity payments” last year and will likely pay $1.5 BILLION this year (2013). (Source: Rate Counsel).
So we strongly support the bill, but would like to see amendments that explicitly require BPU to analyze the strengths and weaknesses of a publicly owned power model (as in NY State), including with respect to advancing NJ's ratepayer protection, environmental, climate, renewable energy and social justice policy goals.
Amendments could also strengthen and make a clear policy commitment to exit PJM, perhaps by saying something like:"NJ shall leave, so BPU please advise us on how best to do it".
Finally, we'd also like to see amendments that would force BPU to expand and accelerate their recent regulatory moves to increase renewable energy grid connections, see:
Curiously, I've heard nothing from NJ climate and environmental groups or NJ media on this critically important legislation. Where the hell are they?