N.J. regulator threatens to pull out of PJM power market

Source: Benjamin Storrow, E&E News reporter • Posted: Saturday, July 7, 2018

The president of New Jersey’s Board of Public Utilities is threatening to pull his state out of the PJM Interconnection, the 13-state regional transmission organization stretching from Maryland to Illinois.

Joseph Fiordaliso says he is frustrated by the lack of coordination between the RTO and its member states. Fiordaliso, who was installed as BPU president by Gov. Phil Murphy (D) earlier this year, says he would prefer to work with PJM to improve communication between the RTO and its member states, but is preparing to leave PJM in the event coordination does not improve.

“I’ve asked staff to research that,” Fiordaliso said in an interview Tuesday. “But there are a lot of options on the table. That is an option of last resort. My top priority, my preference, I want to work collaboratively with PJM.”

Fiordaliso’s comments, first reported in an interview with RTO Insider, came at a time of heightened tensions among states, power companies, PJM and the Federal Energy Regulatory Commission.

State lawmakers have increasingly strayed into the power sector in recent years to stave off the retirement of struggling nuclear plants and to advance climate policies. Murphy signed a bill in May that provides $300 million annually to New Jersey’s nuclear fleet while boosting the state’s renewable portfolio standard to 35 percent by 2025 and 50 by 2030 (Energywire, May 24).

That has raised concerns from some electricity companies and federal regulators, who worry state subsidies are distorting wholesale power markets. Last week, FERC rejected PJM’s plan to overhaul its capacity market, essentially saying state-subsidized power plants will need to choose between their subsidy and participating in the market for reserve power (Energywire, July 2).

Fiordaliso said his angst was not prompted by any one issue, but more by a general lack of communication.

“We’re quote ‘partners.’ It’s not us versus you. It doesn’t have to be adversarial. Make us part of the process,” he said. “My frustration has been, boiled right down, is a lack of communication.”

The New Jersey BPU president said he had received a call from PJM after his concerns were initially reported by RTO Insider and expressed hoped more dialogue was possible.

Jeffrey Shields, a PJM spokesman, said in an email that New Jersey is “an important part of PJM” and touted the benefits the RTO delivers to its members. PJM’s markets annually deliver $2.8 billion to $3.1 billion in savings while wholesale electric rates are at their lowest since 2008, Shields noted.

“Membership in PJM is voluntary and is done through transmission organizations,” he wrote. “Once again, we value our members and the 65 million consumers we serve every day.”