PJM Files Amicus Curiae Brief in Ohio

On Feb. 1, PJM filed amicus curiae brief with the Public Utilities Commission of Ohio about AEP’s proposed settlement concerning power purchase agreements for power plants in Ohio.

PJM does not take a position on the settlements as a whole. PJM proposes that, if the commission approves the settlement, it should make key clarifications to preserve the state’s interest in healthy, competitive wholesale electricity markets and attracting new investment to Ohio.

PJM suggests that the commission clarify in its order that offers into the wholesale market from the units must be made at no lower than the units’ actual costs without consideration of the revenues to be paid by Ohio retail customers under the settlement. Bidding at actual costs ensures that wholesale prices will not be artificially suppressed and will not deter new resource investment in Ohio.

PJM also proposes that the unit owners, not retail customers, should bear the risk of the generating units’ under performance or non-performance under PJM’s capacity market “pay for performance” requirements (Capacity Performance).

Significantly, PJM’s brief reminds the PUCO that the electric power system is reliable in Ohio and the PJM region. It notes that “reliability assurances do not necessarily hinge on the future availability of specific resources or approval of the proposed Stipulation.”  PJM’s brief says that arguments otherwise represent “a proverbial ‘red herring’ that should not distract from consideration of the issues presented in the record as to the merits” of the proposed settlement.