PJM Rule Correction Will Save Ratepayers Billions

CAMBRIDGE, Mass. (December 10, 2024)-PJM Interconnection, the regional transmission organization charged with managing the power grid for 65 million people across 13 states, filed changes to its rules yesterday in response to a complaint to the Federal Energy Regulatory Commission (FERC) co-sponsored by the Union of Concerned Scientists (UCS).

The complaint against PJM sought to prevent the repeat of a $12 billion cost increase foisted upon ratepayers in 2024 due to inappropriate assumptions about electricity supply.

Below is a statement from Mike Jacobs, a senior energy analyst with the Climate and Energy Program at UCS.

"When we saw an unprecedented, 10-fold price increase for PJM consumers last summer, it raised a huge red flag. After digging into PJM Interconnection's rules for determining electricity supply, we realized the exorbitant cost increase was completely illogical. A single rule governing how PJM assessed the energy supply essentially required consumers to pay the power producers twice to ensure 'reliability.' But this doesn't reflect the reality of the regions' energy supply.

"We filed a complaint in September to address this accounting issue. This effort was supplemented by letters pressing for change from governors, members of Congress and state regulators. Not known for their alacrity, PJM responded quickly.

"This is a major win for the 65 million people who rely on PJM to keep their lights on. PJM's filing acknowledges how their previous rules led to consumers making double payments and defines how they will move forward to prevent such costly energy procurements in the future. Importantly, this solution will maintain reliable electricity supplies without sacrificing ratepayers' wallets. This goes to show the value of a strong regulatory body and the power of stakeholders and advocates working together."

Additional UCS resources:

• Jacobs' blog post describing the complaint to FERC