Nick Wallace is senior associate attorney for the Environmental Law & Policy Center.
This summer has brought the full effects of heat, humidity, heat advisories, air quality alerts and growing fears of power outages.
To make matters worse, June began with the announcement that our electricity bills would increase by up to 26%. The primary cause of that increase is higher prices in a power market run by PJM Interconnection, the regional body that controls the grid in 13 states and D.C.
In the June 24 guest column titled, “’We need every watt we can get.’ PJM not to blame for soaring electricity bills,” Asim Haque, senior vice president at PJM, said that the conversation about electricity prices is critical and must be factual. We agree.
Let’s get into the facts.
Fact #1: Data center load growth is the primary driver of higher prices
Haque gets things wrong right off the bat by saying that prices are up because “supply is down.” That’s not true: according to PJM’s external watchdog, the PJM Independent Market Monitor, this year’s capacity price increases are “almost entirely the result of large load additions from data centers.” Supply, meanwhile, has remained relatively flat.
Fact #2: State clean energy policies have added to supply
While Haque blames state policies for higher prices, the reality is that gas-fired generation capacity has increased by 30 GW since 2015, replacing a roughly equal amount of retiring coal (the entire state of OH uses about 30 GW).
Those shifts result from federal pollution limits and gas plants being much cheaper than coal plants — not state policy. And all the nuclear plants in PJM are running. Clean energy policies are not the problem; they are part of the solution.
Fact #3: PJM is responsible for delays in new power projects.
While Haque seeks to deflect blame from PJM, the reality is that PJM’s actions have held back growth in our power supply. About a decade ago, PJM drastically slowed approvals for new generation to connect to its system, sometimes taking more than five years to approve projects. Haque proudly notes that PJM is catching up, with 46 GW cleared for construction. But the damage is already done.
Ask any energy developer what an unexpected five-year delay does to the prospects of getting a project built. PJM needs to accept responsibility for those interconnection delays.
Fact #4: Renewable energy provides reliability on hot summer days
Haque argues that renewable resources don’t contribute to the reliability of the system because they run intermittently. But he ignores the fact that solar delivers on hot summer days.
The June heat wave provided a shining example of how solar supports grid reliability.
On June 24, PJM came close to breaking a 20-year-old record for peak electricity demand.
In fact, initial data indicates that PJM would have broken that record — and possibly the grid itself — if not for the contributions of thousands of megawatts of rooftop solar. Add the larger “utility-scale” solar arrays that provided over 5% of PJM’s power in the middle of the day.
Solar clearly played a key role in stabilizing PJM’s grid.
Fact #5: The cheapest megawatt is the one we don’t use.
Haque’s column emphasizes the importance of increasing supply. But it overlooks the easiest way to avoid extreme prices: energy efficiency and demand response. These are simple, cost-effective solutions to reduce peak demand. Regardless of what Haque and his team at PJM do next, Ohio needs to invest more in energy efficiency and demand response to limit the price increases already hitting consumers.
The Bottom line: PJM shares the blame.
It should take responsibility and say, “We made some mistakes and are working hard to fix them.”
Utilities and legislators must stand up for consumers and demand reform rather than allowing PJM’s disinformation to dominate the conversation.
Nick Wallace is senior associate attorney for Environmental Law & Policy Center.
This article originally appeared on The Columbus Dispatch: PJM can’t hide its role in our soaring electricity bills. 5 facts it won’t admit | Opinion
Reporting by Nick Wallace / The Columbus Dispatch
USA TODAY Network via Reuters Connect
