Capacity Roulette

Deck: 

Out of market means out of luck—even for self-supply.

Fortnightly Magazine - July 2011
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“The sky did not fall,” according to the power plant developer CPV Power, when earlier this year, the New Jersey Board of Public Utilities completed its highly controversial RFP solicitation for new electric capacity. The BPU snagged more than 1,900 MW, in the form of three new planned generating units, including CPV’s own proposed Woodbridge project, in a process authorized by the state legislature and designed specifically to short-circuit the FERC-approved PJM regional capacity market, known as RPM (reliability pricing model.)

The plan was partly to guard against possible brownouts threatened as early as 2012 (according to PJM’s own projections), but also to flood the PJM regional capacity market with below-cost bids, in a move seen by some as state-sponsored price manipulation to help lower future power prices for the state’s beleaguered ratepayers. (See “Capacity Contest,” and “Parochial Power Play,” both by Michael T. Burr, Fortnightly, Feb. 2011.)

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