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Senate, House Nuclear Energy Caucus Supports PJM Electricity Price Setting Changes

The co-chairs of the Senate/House Nuclear Energy Caucus Friday wrote the PJM Interconnection to express their support for a proposal PJM made in a white paper in November changing the way wholesale electricity market prices are set to better reflect the costs of running baseload power plants like coal and nuclear.

“We were .. encouraged to learn that late last year, PJM issued a white paper outlining a potential solution to address a flaw in its market rules that unfairly disadvantages certain low-cost baseload generation resources.

“The PJM market flaw prevents certain baseload generation resources from setting energy market clearing prices, even when the plants are running and their power is required to meet customer demand. Consequently, market prices are artificially low and do not reflect the true cost of meeting customer demand.

“To its credit, PJM has recognized this flaw and is developing a potential solution that will allow these baseload resources to set the wholesale energy market clearing price when their power is needed to meet customer demand.

“PJM’s proposal is technology-neutral, evenly applying to all resources, including natural gas and renewable resources. PJM’s proposal puts baseload resources on par with other energy resources that have long been eligible to set the market price, and will provide baseload resources with additional energy revenues needed to help cover their costs.

“... the PJM proposal is entirely consistent with the October 2017 resolutions adopted by the General Assembly urging the implementation of policies and tariff provisions to ensure baseload electricity generation resources receive proper compensation for the positive attributes they provide our nation’s and this Commonwealth’s electric system.

“While this one potential solution will not fully correct the existing market flaws nor fully provide the compensation necessary to maintain baseload resources, a failure by PJM to implement more just and reasonable energy pricing in its wholesale market will continue to inequitably exacerbate the financial challenges facing baseload resources in the Commonwealth.

“Without action, our Commonwealth, its communities, people and economy will continue to lose substantial economic benefits as more power plants prematurely close.

The letter was signed by Senators Ryan Aument (R-Lancaster) and John Yudichak (D-Luzerne) and Representatives Becky Corbin (R-Chester) and Robert Matzie (D-Allegheny).

Click Here for a copy of the letter.

In making the proposal, PJM estimated the changes could raise total energy and capacity market costs between 2 and 5 percent.

The bipartisan Nuclear Energy Caucus includes 80 members from the Senate and House.

For more information, contact Jake Smeltz, Sen. Aument's Office, at 717-787-4420 or send email to: jsmeltz@pasen.gov.

(Photo: Three Mile Island nuclear plant in Dauphin County.)

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