Monday, April 27, 2015

Feds give PJM waiver to delay annual power auction

Tom Johnson reports today in NJ Spotlight:

The federal government is allowing a delay in an annual power auction next month, a decision that proponents say will increase reliability of electricity supplies, but critics say could boost bills for consumers and businesses.
In a letter from the Federal Energy Regulatory Commission last week to PJM Interconnection, the operator of the nation’s largest power grid, the agency granted a waiver to postpone PJM’s May auction aimed at ensuring there is enough electricity for customers -- especially in unusual circumstances.
The auction is important to consumers in New Jersey because it determines how much they will be charged for so-called capacity payments to energy suppliers, which in this state have become an increasingly large part of their utility bills. In New Jersey, because of congestion on the power grid, capacity payments are much higher than in neighboring states, costs that are passed on to consumers.
The delay is also a concern to critics of the proposal, who said it creates uncertainty among energy suppliers, a concern that could lead to generators bidding higher prices to provide the necessary capacity. They also say that it also could discourage some suppliers from participating in the auction.
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