The Board of Public Utilities Thursday expressed disappointment over a decision by the Federal Energy Regulatory Commission that could adversely affect the state’s prospects for construction of new electric generating facilities.
“Obviously, I am very disappointed with FERC’s decision,” BPU President Lee Solomon said in a release regarding FERC’s ruling on tariff revisions and what is called the Minimum Offer Price Rule. “It does not address the failure of the PJM market to deliver new capacity, which is desperately needed to reduce New Jersey’s energy prices, and to replace aging, dirty, and inefficient generation facilities.”
Earlier this year, Gov. Chris Christie had signed into law a Long-Term Capacity Agreement Pilot Program designed to promote new power generation facilities in the state. PJM operates the electrical grid in 13 states.
“PJM’s pricing model causes New Jersey ratepayers to pay substantially higher prices for electricity than most other states in PJM. This is due, in part, to the extra ‘capacity’ and ‘congestion’ charges levied under PJM’s Reliability Pricing Model (“RPM”). These charges have reached levels well over $1 billion per year,” Solomon stated.
BPU previously stated it hopes to eventually create 2,000 megawatts of new generation in the state through the program signed into law.
“There are other options available to us that are outside of FERC’s jurisdiction. At this time, it appears that we will be forced to pursue those options. It is our duty to protect New Jersey’s ratepayers. I do not believe that New Jersey forfeited its sovereignty when PJM became the regional transmission operator,” Solomon said in the release.
A BPU spokesman said Thursday that the agency would have no further comment on the issue.