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Exelon to FERC: PJM’s proposed capacity reforms will force customers to pay more for polluted air

 

​5/8/2018

​This week, stakeholders from around the country offered comments to FERC on PJM’s two proposed changes to capacity markets, including Option B--the so-called “MOPREx” proposal--that would block resources receiving compensation under state environmental programs from participating in wholesale capacity markets. 

Exelon believes that both proposals submitted by PJM fail to meet the “just and reasonable” standard and should be rejected by FERC. As we write in our comments to FERC, “The effect of PJM’s requested relief, under either option, will be to pad profits for fossil-fuel generators, on the backs of customers forced to pay more.  Option B would prevent state-supported clean generators from clearing at all, replacing them with polluting units.  Perversely, that will not just force customers to pay higher electricity prices, but also will inflict on customers the additional costs of grappling with the pollution Option B has created.”

PJM’s filing ignores basic economics and gets the nature of the “distortion”—the problem that supposedly needs fixing—exactly backwards.  The current distortion in the market is that fossil fuel generators use the sky as a free dumping ground for pollutants and receive an unfair advantage in the markets over non-polluting resources.  By supporting resources like renewables and nuclear that do not produce air pollution, the states are doing what the current market  fails to do, namely, protecting our communities and environment from the harmful effects of air pollution.  Punishing states and customers for doing the right thing makes no sense at all.   It is time for federal and state policymakers to work together to reconsider the wrong-headed  premise that polluting and non-polluting resources should be treated equally in the wholesale markets.  In 2018, families should not have to sacrifice clean air for reliable electricity.  

A full copy of Exelon’s FERC comments can be found here.

 

 

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