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The Game Is Rigged

Regional Power Grid Operator In Bed With Fossil

[Updates – in *text and below]

In a recent post, I waded into the weeds of documents to expose how the BPU was working covertly with staff of the Pinelands Commission to coordinate approvals of South Jersey Gas pipeline  – I called it a conspiracy, because that is what it is.

Central to that pipeline debate is highly technical information controlled by PJM, the 13 State private grid operator. Examples:

  • SJG and BPU have relied on PJM analyses to argue that the pipeline and the BL England plant re-powering are needed to meet projected power demand and to provide “reliability” of electric service to south jersey.
  • PJM Reports have been used to mislead the public about required “reliability” upgrades to the grid, by falsely claiming that if the BL England plant shuts down, then new power lines through the Pinelands must be built.
  • PJM Reports have been used to mislead the public about how the grid operates in what is called “dispatch” (purchase) and distribution of the power generated by BL England. BPU and SJG have failed to tell the public that the BL England plant is what’s called a “merchant plant”, meaning that it sells it’s power on the open market to the highest bidder, and that’s where the power it generates goes, not to the Pinelands. The BL England plant has not – and may not – clear what’s known as the “capacity market auction” – failure to do that increases the costs and risk of producing power at the plant and questions the need for the plant.

All of these complex and critical arguments are buried in PJM expertise and control.

The public has virtually no role in PJM and the PJM, a private corporate entity, is not transparent or accountable despite the enormous power they have to shape critical energy, economic and environmental policy decisions. (*see:

So, with just this one project in mind, today’s NJ Spotlight story reporting that PJM has entered into an agreement to work more closely with the gas industry is deeply troubling – comparatively, the BPU/SJG conspiracy is chump change, see:

But it’s not just pipelines through the Pinelands that are impacted by the PJM power-play. The implications of PJM expanding its work with the gas industry are literally earth shattering:

more fracking, more pipelines, more gas power plants, higher costs, less renewables, climate catastrophe.

I would have thought that this kind of integration and co-operation would be illegal under laws to stop antitrust and anti-consumer monopoly practices.

The PJM controls the electric grid. They decide what power gets produced, by what fuels, where it gets distributed and at what economic and environmental costs.

Of course  PJM denies all this and says they just operate the grid subject to the deregulated free market, but that’s a lie.

At a time of pending climate catastrophe that demands a rapid transition away from fossil and towards renewables, the LAST thing we need is a closer relationship between PJM and the fossil industry, from frackers to pipelines.

Under the Obama Clean Power Plan, some estimate that up to half of existing coal plants will shut down.

If all that power is replaced by gas, we are doomed.

New research shows that natural gas is as bad or worse than coal with respect to global warming potential – when lifecycle and fugitive emissions are taken into consideration.

And contrary to the drumbeat of media propaganda, natural gas is not “cheap” – the market price does not reflect external costs, for environmental, public health and climate costs, known as the social costs of carbon (SCC).

There are peer reviewed and published estimates of SCC that are used by EPA and State regulatory agencies: (read California decision)

On December 16, 2004, the California Public Utilities Commission (CPUC) approved a requirement that a “carbon adder” be included in resource plans for three of California’s utilities, Pacific Gas and Electric Company, Southern California Edison, and San Diego Gas and Electric Company. The carbon adder explicitly takes into account the social cost of carbon emissions from electricity generation facilities when comparing prices of fossil fuel and renewable generation, as well as demand-side management investments. The carbon adder will be used for utility planning purposes only, and will not be assessed to consumers. Taking the cost of carbon into account will mean that a power source is considered more cost effective if it avoids a ton of CO2 emissions for $8 to $25. The CPUC based this range of costs on a number of studies, including the Idaho Power Company’s 2004 resource planning process, which assessed a carbon adder of $12.30 per ton of CO­2.

When will PJM and NJ regulators consider SCC in critical energy decisions?

When will the media – including NJ Spotlight, the outlet with a focus on energy and environment – report on that?

Does PJM have a similar agreement to work closely with solar and wind generators?

Who is PJM accountable to? They are out of control.

[Update: 8/6/15 – my good friend Bill Neil just asked me a question about PJM’s powers and how PJM interacts with RGGI. I don’t know, but sent along this reply to highlight PJM’s extraordinary powers and how they remain below the media and policy horizon:

Bill – I don’t know how PJM interfaces with RGGI (or the EPA) – I assume that PJM planning accepts those entities as independent and as setting constraints on what they can do.

Trying to read and understand PJM documents is a real challenge, they are written for electrical engineers – but I know enough to know that there are enormous planning and allocation issues. Here is their site, check it out:
Among other things, the PJM develops economic criteria to “incentivize” the development of new generation capacity at certain locations where there is “congestion” (high demand, lack of local power). The PJM “location capacity” factor alone costs NJ ratepayers over $1 billion in “congestion” charges that go to the power companies.
I also know that the revenue from the congestion charges are what kept – and keeps – NJ’s last 2 coal plants on-line, making them economic despite the fact they are dinosaurs. That revenue allows PSEG to spend $1.5 BILLION to install pollution controls at their Mercer and Hudson coal plants, when they obviously should have been shut down (both over 40 years old).
The utilities basically HAVE to comply with PJM determinations of need for stuff like power lines and “reliability” violations (criteria that say when, for example, a power line or substation or circuit breaker is overloaded). The utilities MUST make those investments and then charge consumers and make a profit, of course.
Violations of PJM Orders can cost as much as $1 MILLION per day in enforcement fines – that’s 20 TIMES the highest fine EPA can levee under environmental laws like the CLean Air or Clean Water Act.
The energy companies now make the highest and biggest profits in transmission of power – PJM allows states and power companies to determine the rout of transmission lines, but if PJM says a line is necessary for “reliability”, then the line must be built.
PJM operates the power auctions – that where the game is really rigged!
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