There’s a critique of PJM making the rounds: PJM is too big. There are too many state interests at play, and PJM doesn’t have the ability to function cohesively or quickly enough. FERC even scheduled a governance technical conference this month to examine whether PJM’s stakeholder structure can move fast enough to respond to demand. The reality is that policy disagreements at the state level are dressed up as a procedural defect with the grid, opening the way for critics to point their reforms at the wrong target.
Disagreements at the state level are just what you’d expect, pitting those that generate enough power to export against those that depend on imports. Pennsylvania is PJM’s energy workhorse, shipping out roughly a quarter of everything it generates. Illinois, West Virginia, and Michigan also produce more than they consume. The others – Virginia, Maryland, New Jersey, and Delaware – are net importers, and increasingly so as data centers expand across their footprints.
Exporters like Pennsylvania that are rich in nuclear, gas, and coal generation have fundamentally different interests in capacity pricing and transmission cost allocation from an importer state, which has restricted natural gas development, leaned hard into renewables, or joined an ambitious emission reduction program. When Virginia pulls in more expensive power from its neighbors, or when Maryland absorbs double-digit rate hikes, that isn’t a governance failure – it’s the market doing its job by revealing the cost of divergent state policy preferences (and thus resource access).
These state policy preferences are then lobbed at the market and its participants to respond to, whether by prematurely retiring generation, relying on tax subsidies, or simply building generation that is more expensive per megawatt when compared against traditional baseload fuels.
PJM is actively working to continue the evolution of the market to meet the demand of today and the future. It has cleared more than 60% of its interconnection backlog under a reformed study process and opened a new study cycle this spring in partnership with Google to apply AI to speed up the review process. A separate PJM program, the Reliability Resource Initiative, pulled in more than 11,000 MW of new projects that could come online quickly. PJM has also adjusted its review processes to allow more wind, solar, and storage to compete directly in the capacity auction. It’s even accepted a price collar through 2030, demonstrating that it is willing to make short-term adjustments in response to concerns by state executives.
More than 46,000 MW of approved projects – over a quarter of PJM’s existing capacity – already hold the right to build but are unable to move forward. Some 37,000 MW of PJM-approved generation can’t even break ground at all because of state and local permitting fights. At the same time, state policy mandates have pushed working plants into early retirement, further tightening supply from the other end. The same governors demanding faster action are often the ones holding the permits and slow-walking the buildout of energy infrastructure while forcing closures of dispatchable power.
PJM is not too big. It has demonstrated time and again that it can run a competitive power market and ensure the reliable transportation of power across 13 very varied states and the District of Columbia. It’s been successfully doing this for more than 30 years, delivering $5 billion in savings annually to customers, just as it was designed to do. It’s accelerated the queue and kept the lights on. What the market cannot do is permit projects or draft legislation. States must recognize their role in restricting the full benefits of the market.
Asking PJM to continue navigating these policy issues in the same manner – trying to respond to all of them – is a recipe for disaster. The states are absolutely responsible for chucking icebergs into the path of this ship, and if it goes down, they’ll have themselves to blame for the aftermath.
Todd Snitchler is President and CEO of the Electric Power Supply Association (EPSA).
This article was originally published by RealClearEnergy and made available via RealClearWire.
The real crisis in the UK is the complete, total and utter capture of the political and media class by the idea of net zero.
A world in which the heroic and stoic British Fabians lead the world by example and the world sees the light and willingly follows. If that sounds daft, here is a picture from the election count in the Makerfield constituency – winner, one Andy Burnham (centre). The next PM.
PS
Count Binface is Jonathon ‘Jon’ Harvey, an Oxford Classics graduate and comedy writer for the… BBC
These folks live in a total fantasy world, protected by personal wealth.
You’d think Burnham could wear a shirt and tie with his suitcoat instead of a T-shirt.
I thought Zack Polanski had a great face for radio…but he’s got some serious competition…
What is wrong with you and the constant need to use caps and italics all the time?
He wants to stand out amongst the crowd.
Farting in a crowd has a similar affect.
An elderly uncle didn’t hear well and so he shouted when we visited him in his living room. Italics have an accepted use (learned in 9th grade English class) while “bold” is best used when one wants to express a strong emotional issue.
Story tip:
https://climatechangedispatch.com/professor-makes-stunning-discovery-absolutely-100-percent-offshore-wind-kills-whales/
Offshore WTG and whale deaths.
And what do on shore wind turbines do.
Story tip:
https://climatechangedispatch.com/scientific-bombshell-undermines-the-climate-doom-narrative/
Worth repeating.
See Lindzen-Happer-GHGs-and-Fossil-Fuels-Climate-Physics-2025-06-07
I don’t understand why that hasn’t appeared in red.
The underlying paper referenced in the linked article was retracted, apparently because ‘the rigor and quality of the peer-review process for this paper was investigated and confirmed to fall beneath the high standards expected by Applications in Engineering Science.’
No idea if the retraction was merited or just the ‘team’ performing a bit of ‘cleanup in aisle 7’.
Good article, but let’s not mince words – the problem within PJM is that some of the states within its footprint are effectively renewable energy parasites that feed off the ‘workhorse’ states that generate the bulk of its dispatchable energy.
To me the solution seems very simple – just level the playing field, i.e., the dispatch rules, for all energy providers, whether conventional or renewable. In other words, no more ‘must take’ energy from renewable sources. Rather they must bid into the schedule(s) just like conventional suppliers, and if for any reason they can’t ‘perform’, then they keep the grid whole by paying any incremental cost to dispatch any incremental generation. This puts the cost of ‘chasing’ wind and solar back on these providers, rather than socializing these costs onto ratepayers.
Obviously, the regulatory commissions of the parasitical states would either have to revamp their terms with renewable energy suppliers, including homeowners who receive the full retail price for their intermittent contributions to the grid, or effectively ‘secede’ from PJM and form their own ISO.
Let’s put it another way. States that import have no say whatsoever about what occurs in exporter states. That will tend to level the field rather quickly. Import states can either enter the generation contest or pay the higher prices of imports. Let the market decide!
Let’s assume that NJ solar underperforms, requiring PJM to dispatch less efficient peaking units in PA. Doesn’t this increase the cost of serving load within PJM, thereby penalizing both NJ and PA (and other states’) rate payers?
The fundamental problem is that PJM is a pseudo government over its area. It tries to control the market but doesn’t have authority over who makes what. Worst of all worlds. Typically why government control of markets, prices, and production never works.
I’ve proposed before the use of smart meters (like cell phones) and electric providers along with customer contracts for service. If a consumer is willing to put up with outages from a cheap provider, they can get a cheaper price. If a consumer wants reliable service, they will pay a higher price to a more reliable provider. Providers can send messages to shut off smart meters they control in order to match demand to supply. LET THE MARKET DECIDE!
I also proposed something along the lines of your second paragraph some time ago given that current technology would allow conventional and renewable energy customers to share the T&D network.
As you say, customers would have to pick one or the other market, and suppliers would have to bid-in to the respective markets. Renewable customers would ostensibly get cheap energy under favorable conditions, but would be curtailed if the renewables didn’t perform. And if under really favorable conditions there was more renewable energy than needed, these suppliers could always sell their surplus to conventional suppliers, who could then back off their own generation and save on fuel costs.
Win / win, but it only works if the curtailed renewable customers aren’t allowed to access conventional supply, hence the smart meters. My sense is that there won’t really be many customers for renewable energy under these terms, which means the whole renewables chimera will collapse.
That is the whole point, right. Right now the government is choosing for everyone. Some people want Lamoghinis and some want 60’s F100 pickups. L
et the customer choose and the government stop pretending to know how everyone should live and what they can buy.
Those on the left have been convinced that they are both mentally and morally superior beings.
That gives the not just the right, but the obligation to make decisions for the lesser beings that surround them.
With respect
If you look at the thread of comments, all I see is people trying to justify the broken system that exists. There is blame here and there.
Electricity is not a commodity, it is an essential of life, like water and air. The societal system we live concentrates people in dense areas.
Everything is monetized. The free market, isn’t free, it is extortion in a lot of cases. And electricity is one the most concerning.The free market is a belief system, just like all other belief systems.
Generator capacity is not a decision for corporations, they restrict capacity to maximize profits. Generator capacity should always exceed peak demand. When a generation corporation decides on additional capacity on the basis of return on capital and shareholder returns there is a problem.
https://youtube.com/shorts/SYW9oQuIJr4?si=XFhA5Ne7ESbxQFye
Socialists trying to convince each other that this time socialism is going to work.
The system wasn’t broken until those on the left decided it needed fixing.
Electricity is a commodity. Just because those on the left decide they need to deify the stuff they want for free, doesn’t change it’s nature.
At one time, people needed to live close to the building where they worked and businesses needed to be close to those who provided services for them.
For many, those conditions no longer exist. The only thing trying to force people into cities are leftists who believe that such living is more efficient.
Nothing is free, no matter how much leftists want to believe other wise.
Companies want to maximize profit, that usually means selling as much as possible, which always means selling at slightly above the cost of production.
The belief that the market is broken is a leftist invention to justify their desire to force the system to give them what their greedy little hearts want, for free.
As long as government permits competition, there will always be a competitor that is willing to undercut your prices in order to gain market share.
As for cartels, the only time they work is when the government does the enforcing. Because the temptation to gain market share and thereby increase your total profits is too great.
As to monopolies, they also can only exist through government enforcement.
As long as there are oversized profits, there will always be people who want a piece of that action.
Either by competing directly, or by creating similar products that perform the same function.
The only problem with markets, are all the people who want to fix the market so that they can get the free stuff they feel entitled to,
Maryland is not a renewable energy parasite, just a parasite. The only renewable energy projects being built are a few community solar farms. U.S. Wind hasn’t even started building the logistics infrastructure for the big wind farm off of Ocean City, so no joy there. All that has happened is alleged support by Wes Moore and the Statehouse for building new natural gas generation (in addition to “renewables”), which will be effectively stopped by holding up permits.
The effort to counteract the lack of generation has PJM requiring new transmission capability to bring in electricity from Pennsylvania. The new transmission projects, even those on existing transmission rights-of-way, are being fought tooth and nail by the NIMBYs. As far as I am concerned, if they don’t want the transmission lines, they should have their electricity turned off.
Agree that NIMBY resistance to transmission (gas / electric) is a big issue.
You nailed it: the “must take” order to the grid operator is an enormous subsidy dressed up as “helping the environment”. It does nothing of the sort. It helps the investors in what is otherwise an uneconomic proposition. As investors in solar PV farms have discovered, no one want they power in the middle of the day. “Must take” rules simply pass the losses from the solar farm to those who invested in despatchable power systems. The worst – must take at three times the base rate – are the epitome of crazy. One of my friends has a contract paying him over 30 cents per kwh for solar PV, and the grid operator has to take it. Talk about a grift!
If you generate power when no one wants it, it is your problem.
“More than 46,000 MW of approved projects – over a quarter of PJM’s existing capacity – already hold the right to build but are unable to move forward. Some 37,000 MW of PJM-approved generation can’t even break ground at all because of state and local permitting fights.”
How much of that PJM-approved but currently stalled capacity is intermittent wind and solar generation, and how much is reliable gas-fired generation?
If the great bulk of this stalled capacity is intermittent wind and solar, then even if it gets installed on a faster schedule, PJM’s power grid will still be seeing rising costs and days or weeks where the grid is highly stressed because of a lack of sufficient peak load generation capacity.
An explanation of exactly what PJM is, would have been helpful.
The left defines market failure as one of two things.
1) Whenever the market fails to provide those things the left considers most important. (Like free healthcare.)
2) Whenever the markets are unable to withstand the assaults from government agencies.
13) Whenever the marketfails toprovides those things the left considersmostunimportant. (Likefree healthcaresocially unproductive consumer goods.)Where is the PJM = huge electrical power conglomerate in USA for the large number of people who are not American?
I looked it up, and the P stands for Pennsylvania. How extensive it is beyond that, I didn’t find.