U.S. PJM power grid proposes new energy price model, costs may rise
(Reuters) – PJM Interconnection, the biggest U.S. electric grid, on Wednesday proposed changes to how it calculates power costs, which could boost wholesale prices 2 percent to 5 percent in 13 Mid Atlantic and Midwest states, or between $440 million and $1.4 billion annually.
U.S. Energy Secretary Rick Perry wants the U.S. Federal Energy Regulatory Commission (FERC) to issue rules to protect so-called fuel secure plants from early retirement in FERC sponsored power markets, like PJM, by compensating the units for the resilience benefits they provide.
Fuel secure plants include nuclear reactors and coal plants with 90 days of fuel on site, according to the Department of Energy’s (DOE) Notice of Proposed Rulemaking (NOPR) filed on Sept. 28.
Stu Bresler, PJM senior vice president of operations and markets, said in a conference call the proposal was not a direct response to the rulemaking notice, adding that PJM started working on its plan about a year ago and published a white paper on it in June.
Bresler said the PJM “proposal is not designed to protect any particular fuel resource.” However, coal and nuclear plants should benefit under the PJM proposal, which would cause energy prices to rise if it is approved.