OPINION:
As electricity demand rises, policymakers must make informed decisions to lower costs. But calling on policymakers to reverse decades of successful energy policies because of incorrect and misleading arguments is a recipe for disaster (“Americans are blaming the wrong part of their electric bill,” Web, Aug. 10).
Investor-owned utilities can already build generation in PJM, the grid operator for much of the mid-Atlantic, so long as they’re willing to build that generation competitively.
PSEG, a New Jersey utility, said in its most recent earnings call that its competitive power generation arm is exploring opportunities in PJM. In Pennsylvania, PPL’s president and CEO told investors that PJM has already accepted 5 gigawatts of generation projects that PPL submitted as part of a joint venture.
These projects would be impossible if utilities could not build or own generation. What utilities are not allowed to do in any PJM state is build generation under a monopoly model where they receive guaranteed returns on their investments.
When generation is built competitively, investors are the ones that bear the risk if that power plant gets delayed, exceeds construction budgets or ends up not being cost-effective. Generation built under the monopoly utility model, however, passes those risks onto captive customers.
For example, ratepayers in Georgia were on the hook after the Vogtle power plant cost twice as much as anticipated and took twice as long to build.
The risks of a monopoly utility system are exactly why consumer advocates across PJM have vehemently denounced efforts to abandon competition in favor of monopoly control.
Maryland People’s Counsel David Lapp has repeatedly rejected calls for a monopoly utility system, saying: “for many reasons, it’s a bad idea to have utilities build and operate power plants and have the costs treated like distribution costs.”
Similarly, Brian Lipman, director of New Jersey’s Division of Rate Counsel, has said that “competition is good for ratepayers” and “utility-owned generation will likely shift the risk of producing generation away from generation developers and onto ratepayers.”
Any assertion that utilities cannot build or own generation in PJM is incorrect. Using such falsehoods to call on policymakers to change energy policy affecting millions of customers will only place more risk on families already struggling with higher bills.
TODD SNITCHLER
President and CEO, Electric Power Supply Association (EPSA)
Washington
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