Letter to the Editor

Fortnightly Magazine - August 2006
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To the Editor:

An article in the June 2006 edition of Public Utilities Fortnightly (”Pondering PJM's Energy Price Run-Up”) by Howard Spinner of the Virginia State Corporation Commission staff raises the question of whether the observed increase in PJM average system prices in the second half of 2005 was the result of fuel-price increases and increased loads, or the result of market power. The article suggests that the increase in prices in PJM was not the result of higher loads or fuel prices, but was the result of the exercise of market power. It also suggests that the result of this asserted market power was an increase in net revenues to generators.

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