Docket Nos. ER24-2172-000, ER24-2172-001
I join this order because PJM has failed to meet its burden of proof on this record. I emphasize that PJM’s filing is rejected without prejudice. Speaking for myself, I have an open mind about the many serious issues pertinent not just to this particular proposal, but also to the issues that may be relevant to other co-location proposals. The specific co-location arrangement proposed here may make sense and be acceptable under the Federal Power Act, but on this record that claim simply has not been proven. I concur to make the following points.
Co-location arrangements of the type presented here present an array of complicated, nuanced and multifaceted issues, which collectively could have huge ramifications for both grid reliability[1] and consumer costs.[2] Indeed, this Commission has already acknowledged the importance and complexities of these issues, which is why we held a technical conference to explore them.[3] That technical conference was timely and necessary, as these co-location arrangements are a fairly new phenomenon that entails huge ramifications for grid reliability and consumer costs.[4] Given these ramifications, the Commission truly needs to “get it right” when it comes to evaluating co-location issues.
And make no mistake. Were we to approve this proposal at this time, as the dissent advocates, we would be setting a precedent that would be used to justify identical or similar arrangements in future cases. Further, to claim, as the dissent does, that failure to approve this specific proposal at this specific time endangers “reliability,” and even “national security,”[5] is simply unproven on this record.
For these reasons, I respectfully concur.
______________________________
Mark C. Christie
Commissioner
[1] See, e.g., Independent Market Monitor for PJM’s (Market Monitor) Answer at 7 (“The Commission’s decision in this matter, while framed as a narrow issue by Talen, has extremely large significance for the future of PJM markets. PJM has not explained how it plans to meet expected increases in the demand for power, given ongoing generator retirements, even without removing multiple large base load units from the system. PJM’s latest reliability report and PJM’s RTEP do not address the potential significant changes that would result from reliance on the proposed ISA as a precedent. While it is understandable that the recent reports do not address these issues, the nonconforming ISA should not be approved without such analysis and a stakeholder review process and a consideration of the facts by the Commission.” (emphasis added)); id. at 2 (“PJM has made a series of critical policy decisions that are embedded in this ISA involving, among other things, how backup power is handled, that are very different from positions that PJM has previously taken on related matters in the stakeholder process. These issues require stakeholder discussion and tariff changes. How will load be met if multiple base load generators are effectively removed from the market? What will the impact be on power flows given that the grid is built in significant part to deliver nuclear energy to load? What will be the impact on energy prices and capacity prices?” (emphasis added)); id. at 6-7 (while explaining the impact of accepting the ISA and applying it to all nuclear facilities in PJM, the Market Monitor states: “[e]stablishing this precedent would undermine PJM reliability and PJM competitive markets.” (emphasis added) (footnote omitted)).
[2] See, e.g., id. at 6-7 (“While the proposed amendment to the ISA is creative, its benefits to the co-located load come at the expense of other customers in the PJM markets. If this approach were extended to all the nuclear plants in PJM, the impact on the PJM grid and markets would be extreme. Power flows on the grid that was built in significant part to deliver low cost nuclear energy to load would change significantly. Energy prices would increase significantly as low cost nuclear energy is displaced by higher cost energy on the overall supply curve. Capacity prices would increase as the supply of capacity to the market is reduced. Emissions would also be expected to increase as thermal resources that are next in the supply curve are dispatched to meet load to replace the nuclear energy. Establishing this precedent would undermine PJM reliability and PJM competitive markets.” (emphasis added) (footnote omitted)). The various filings by Exelon and AEP in this docket also allege that up to $140 million dollars per year will be cost-shifted to customers as a result of the ISA arrangement and that assets ratepayers have already paid for will be used to benefit the arrangement in the form of back-up service. See, e.g., Order at P 24; Exelon and AEP July 17, 2024 Answer at 23 (“We know that a unit at this facility had an unplanned outage in November 2023, and it appears no load was dropped—suggesting that the load just relied on PJM for its supply. The same would, in effect, happen again if the other Susquehanna unit simply ‘stepped in’—the rest of the system would lose that resource, one that the ratepayers have already paid for.” (footnote omitted)).
[3] Large Loads Co-Located at Generating Facilities, Fourth Supplemental Notice of Commissioner-Led Technical Conference, Docket No. AD24-11-000 (Oct. 24, 2024).
[4] To be clear, the fact this Commission convened a technical conference generally on the many issues implicated in co-location arrangements does not change the record in this proceeding, nor is it a reason to approve or disapprove this specific proposal, which must be decided on the record herein.
[5] Dissent at PP 1-4 and passim.