Docket No. ER26-3380-000
PJM needs more generation: Soaring electricity demand from data centers, artificial intelligence, domestic manufacturing, and other strategic industries continues to challenge a region that faces increasingly tight supply. Meeting that demand requires sufficient generation, including dependable resources that support the system around the clock. PJM must move fast to secure the resources to serve its growing system.
But how PJM—really, PJM’s ratepayers—pays for those resources matters. As I have said before, customers that drive new costs should bear appropriate responsibility for them. Existing customers should not be left paying costs attributable to new demand. That principle is particularly important here where PJM proposes a backstop procurement specifically to deal with the capacity shortfall that rapid load growth largely drove.
PJM needs urgent action and this mechanism, the RBP, can be a critical tool to bring additional capacity to the region. Unfortunately, though, PJM missed the mark on an important element of its proposal: it did not adequately ensure that the procurement’s costs will be allocated to the customers who drive its need.
Today’s order is not perfect; the filing it responds to, even less. But today the Commission provides PJM a path forward to solve what its current proposal lacks when it comes to fair cost allocation. PJM should move quickly to take it.
That work must include a serious focus on load forecasting. After years of relatively flat electricity demand, regulators and grid operators need to adjust to sustained and asymmetric growth. That means better load forecasts, a clearer picture of which projects will materialize, and enough generation and infrastructure to serve them. Better information about where, when, and why load is growing also provides a stronger foundation for determining who should bear the costs associated with serving that growth.
PJM does not have the luxury of standing still. The region needs additional generation, and I encourage PJM to swiftly return to the Commission with a section 205 filing we can accept so that the procurement can move forward quickly. In doing so, PJM must better ensure that the customers driving new costs bear appropriate responsibility for them and that existing customers are not left paying the bill instead.
For these reasons, I respectfully concur.