PJM's "independent" Market Monitor filed a complaint at FERC earlier this month, seeking to make a certain state-sponsored generation project increase the price bid into PJM's RPM auction, or alternatively, allow all other bidders to re-work their prices. The MM also asked that FERC delay the auction until this matter is settled.
At issue here are programs in the states of Maryland and New Jersey that have been put in place to encourage the development of new in-state generation, instead of continuing to rely on imported electricity (mostly produced from burning coal) from existing western generators which will be transported to the states via new high-voltage transmission lines hundreds of miles long.
PJM has been championing incumbent generators' strangle-hold over eastern markets at FERC, and recently had the rules changed as a means to prevent New Jersey and Maryland's generation projects from clearing the auction, which is a requirement for moving forward.
When "Project X" (okay, why are we pretending here? we all know it's Maryland's project) made a bid that was low enough to clear, the IMM filed a complaint accusing them of not following the rules. The IMM says:
"Selective use of favorable modeling assumptions also creates the potential to distort market outcomes because it can make a more expensive project appear to be cheaper. The result could be that the more expensive project clears in the RPM auction while the less expensive project does not clear. This would be a non-competitive outcome."
Let's talk about "fair" and "competitive," shall we, IMM? If your incumbent generator PIGS were required to include the $6B cost of new transmission projects to transport their "cheap" electricity to eastern markets in the prices they bid into your auction, what would the true price of their electricity be? If we're going to be truly fair, that's the only way to do it.
Instead, in PJM's unfair and uncompetitive electricity markets, the true cost of western generation is subsidized by all consumers in PJM via PJM's region-wide postage stamp cost allocation for transmission projects 500kV or over. This enables PJM's incumbent generators to make artificially low bids into the RPM because new transmission necessary to get their generation to load on the east coast will be subsidized by ratepayers far from Maryland or New Jersey, with the beneficiaries of these transmission projects paying only a fraction of the cost of supplying them with electricity. When new generation is built in Maryland or New Jersey, the entire cost of the project will be borne by that state's ratepayers. When new transmission is built to import incumbent generators' electricity into the state, Maryland and New Jersey only pay a fraction of the cost. This is not "fair" or "competitive."
PJM's ball of twine just keeps unraveling. Now they've even screwed up their own auction with their continual kowtowing to the financial wants of certain incumbent utility conglomerates. What's next? Are we going to see the incumbent generators' front group spring into action? Spare us the posturing. We aren't buying it.