NEW YORK (Reuters) – A group of five governors on Tuesday urged PJM Interconnection, the largest U.S. grid operator, to change the process it uses to determine the price paid to power plants after record-high prices awarded in its last auction.
The most recent PJM capacity auction resulted in prices that were nearly 10 times the previous year, with results attributed largely to shrinking power supply and rising electricity demand.
The prices raised concerns about swelling power bills for everyday homes and businesses in the grid operator’s territory, and led environmental groups to file a complaint against PJM’s process to determine its prices.
The capacity auction results will cost homes and businesses in the 13 states and the District of Columbia that are served by PJM $14.7 billion, the governors of Pennsylvania, Illinois, Maryland, New Jersey and Delaware said in a letter to the grid operator.
“Urgent action is needed to prevent customers from paying billions more than is necessary,” the group said.