Power-grid operator concerned about profit guarantees for plants RSS Feed

Power-grid operator concerned about profit guarantees for plants

The operator of Ohio’s electricity grid has some big concerns about profit-guarantee proposals for American Electric Power and FirstEnergy, but is treading carefully in its comments.

PJM Interconnection filed a brief on the AEP proposal on Monday, urging Ohio utility regulators to be aware of that subsidizing one set of power plants could discourage other companies from building new ones in the state.

“The long-term impacts of that disincentive to attract efficient new investment in Ohio would far outweigh any short-term gain that may be realized,” PJM said in the brief.

PJM oversees the flow of electricity in all or parts of 13 states and the District of Columbia, including all of Ohio. The Pennsylvania-based grid operator is a quasi-governmental office that tries to remain neutral on state-level regulatory issues.

In this case, PJM says it is not taking a position on the Ohio proposals as a whole, but is calling attention to the way it would like the Public Utilities Commission of Ohio to interpret some of the provisions.

AEP spokeswoman Terri Flora said “there does not need to be a conflict” with PJM. But she also is raising concerns that PJM’s comments “go beyond or are inconsistent with the ‘rules of the road’ that are enforced elsewhere and throughout the PJM markets.”

This conflict is important because it could help shape the federal legal challenges to the Ohio plans, if those plans get approved by the PUCO.

Meanwhile, PJM’s Independent Market Monitor — a separate office — is blunt in its opposition to the Ohio utility proposals.

“It is not in the interest of Ohio customers to assume the risks associated” with the affected plants, the office said in a filing on Monday. The market monitor was created by PJM to provide independent reporting on market issues.

Read full article at The Columbus Dispatch