PJM Senior Vice President of Operations and Markets Stu Bresler testified Monday before the Pa. General Assembly Nuclear Energy Caucus, a group of state legislators interested in the viability of nuclear power plants in the state.
His testimony emphasized market-based solutions, and he noted that electric competition has benefited Pennsylvania and its consumers in many ways. For example, he said competitive markets allowed consumers to realize the reduction in electricity costs resulting from low-cost shale gas to produce electricity rather than being “locked-in to outmoded, high-cost power generation technologies.”
“Over the last decade of shale gas development, Pennsylvania consumers have seen wholesale energy costs decline between 30 and 50 percent,” Bresler said in his prepared remarks.
He also explained that “through its commitment to competitive markets, Pennsylvania has developed the most robust generation development market among the PJM states.”
Competition, coupled with the development of Pennsylvania’s vast natural gas reserves, has stimulated innovation and investment in new, more efficient gas-fired generators. That has enabled consumers to benefit from the low cost of natural gas in the form of lower wholesale electricity costs.
In recent years in Pennsylvania, 13 new natural gas plants totaling more than 10,000 megawatts of capacity are in-service or under construction, representing at least an $8 billion investment in the commonwealth. PJM is studying an additional 15,000 MW of new natural gas projects in Pennsylvania alone.
“This is a major success for Pennsylvania and its consumers,” Bresler said.
Bresler cited in his introduction a report issued Friday from Penn State University that discusses the potential impacts of subsidies on the wholesale electricity markets.
Bresler further explained that PJM and its stakeholders are continuing to ensure the markets remain effective by working to:
- Enhance the transparency and accuracy of energy prices through the Energy Price Formation initiative to ensure market compensation that reflects generator reliability
- Develop market-based solutions that can value fuel security attributes, price emissions and ensure those that benefit pay for those benefits
- Find a solution (as directed by the Federal Energy Regulatory Commission) to address the potential of subsidized resources participating in Reliability Pricing Model capacity auctions to suppress market price signals necessary for the market to provide efficient, reliable, low-cost electricity to Pennsylvania and other states