"We also are struggling to understand how the process now under way can constitute an appropriate stakeholder process for tariff revisions as significant as these. Stakeholders Manual 34, which authorizes "User Groups" to debate a specific market design problem (see Paragraph 5.5 at p. 14), still requires published notice to all members that the process is to take place, requires that other interested stakeholders be permitted to participate, and requires PJM to post agendas and summaries of meetings on the PJM webpage. None of this happened during the secret negotiations. Moreover, the "ad hoc stakeholder group" discussions took place over a period of at least three months - as we understand it, discussions began in June and continued well into September- during which the invited parties had the opportunity to get detailed input from PJM and the IMM and to analyze different options in depth. The rest of us get less than half that time to understand and analyze and react to a complicated set of revisions that were reduced to proposed tariff pages only last Friday. Put another way, the parties to the exclusive negotiations ran out most of the clock and have left the rest of us to scramble against a deadline driven only by PJM's and the proponents' self-interested desire to have these changes in place for the May 2013 Base Residual Auction."
New Jersey's Director of Rate Counsel, Stefanie Brand, also throws a few logs on the PIG roasting fire. Her letter gets extra points for snarky use of quotation marks.
"As we understand it, the proposed MOPR changes arose from dissatisfaction on the part of certain suppliers that the previous changes to MOPR, which are currently on appeal in the United States Court of Appeals for the Third Circuit, were insufficient to thwart what they viewed as "outcomes that are inconsistent with a competitive market." These suppliers then engaged other select PJM members in confidential discussions regarding changes to the MOPR to address their concerns. At some point, PJM itself and the Independent Market Monitor (IMM) were brought into this process and, in joining it, agreed not to inform any other interested PJM members of the discussion or invite them to participate without the agreement of the other group members. Eventually, and apparently with the group's agreement, PJM reached out to a select group of "load" interests to participate. Their participation, too, was specifically conditioned on agreeing to maintain the secrecy of these discussions. Not surprisingly, the proposal that resulted from this closed-door process addressed the specific concerns of the PJM members who participated in the discussions, at the expense of the interests of the PJM members who were intentionally excluded. Indeed, the discussions were aimed at developing "solutions" designed specifically to exacerbate, not resolve, the matters of concern to the excluded PJM members."
"...certain members were invited into the process by PJM itself. PJM should not be choosing which members are allowed at the table, particularly when the invitation comes with a requirement that the process be kept secret from other interested members."
"That PJM views the interests of 27 large users as more worthy of consideration than the millions of customers represented by the consumer advocates underscores the perception that PJM favors the interests of certain members over others."
"While packaged as a series of exemptions and criteria, the intent is obvious: to thwart the actions of those States to address capacity shortages and implement policy judgments about resource choices."
"PJM has no business involving itself in efforts by the
incumbent suppliers to control the "competitive" market in which they participate."
And finishes up threatening to "...pursue all remedies to prevent PJM and the proposal's proponents from usurping the States' role under the FPA."
Update: The Maryland Office of People's Counsel has also written to PJM. In their letter the MPC requests that PJM throw the "secret" proposal out the window and start fresh with all stakeholders. MPC also says:
"MPC is in the process of evaluating the proposal and forming positions on it. However, it appears that the proposal is founded on the notion that certain actions that result in new capacity are "legitimate" and some are not. PJM should focus its attention on administering the electricity markets for the resources that participate in those markets and not on deciding which actions are legitimate and which are not. Furthermore, from the perspective of customers who rely on electricity to meet their daily household and business needs, there is nothing illegitimate about a State directing utilities in its jurisdiction to take action that results in new generation that the State believes is in the long-term best interest of that State. While such an action may affect markets, the creation of rules to prevent such action is not administering the market but attempting to assure certain outcomes. PJM's role should not be to assure price levels or targets."
Well, PJM is certainly scoring some important collaboration points with the states, isn't it? Just more of the same old lobbying and influence being exerted at the PJM cartel by their profit-hungry power company "members." This time it's especially egregious because the supposedly "independent" market monitor also jumped aboard the S.S. PIG. The market monitor probably isn't playing favorites among PJM's unruly children. However, the market monitor refuses to admit that its market is a complete and utter failure that ends up costing millions of electric consumers extra money every month.
PJM's "market" is supposed to bring you low cost electricity. Generation and transmission is supposed to be driven by "market" need. Because the market is not properly stimulating new generation entries, states such as New Jersey and Maryland are paying some of the highest electricity prices in the country. Instead of waiting for the market to prompt new generation in those states, PJM is instead jumping the gun to provide "low cost" electricity to those areas by importing its incumbent PIG's existing generation via new high voltage transmission lines such as TrAIL, PATH, Susquehanna-Roseland and MAPP. The "market" never had a chance to work.
New generation in New Jersey and Maryland will be paid for by the consumers in those states. Transmission lines are paid for by all PJM consumers, including those in states far from New Jersey and Maryland. This costs you money, if you don't live in New Jersey or Maryland. However, the big Ohio Valley generators are currently sitting on a glut of generation they can't sell as demand continues to tank. Companies like AEP and FirstEnergy are in big financial trouble if they can't find new markets for their dirty, coal-fired generation. FirstEnergy recently scaled back one of its plants because there was no market for it. Last week, FirstEnergy laid off a whole bunch of employees. Tough times, FirstEnergy? Awww... that's too bad :-)
New Jersey and Maryland got tired of waiting for PJM's market to work, so they came up with their own laws to encourage the building of new generation in their own states. This upset the incumbent generation PIGs, who feared losing a profitable, captive market for their dirty product. So, the PIGs changed the MOPR (Minimum
Offer Price Rule) to prevent new generation from being built. The states fought vigorously, but lost when FERC agreed with PJM. However, even under the new rules, New Jersey's and Maryland's new plants cleared PJM's RPM auction this year. In response, the greedy little PIGS got together to hold secret meetings to craft even more changes to the MOPR, hoping to stop new generation for good. Now they've been caught and called out for their scheming.
PJM's "market" doesn't work because its incumbent PIGS won't allow it to work. Consumers deserve better.