Commissioner Danly Dissent Regarding PJM Interconnection L.L.C.

Commissioner James Danly Statement
May 31, 2022
Docket Nos.  EL22-26-001, ER22-957-001

I dissent from this order[1] on rehearing as I did the original order eliminating scarcity pricing in the form of the “Transmission Constraint Penalty Factor” for up to two years because a transmission constraint in the Northern Neck Peninsula was deemed “unresolvable.”[2]  Since then, we have learned that a solution based on a reconductored line (a solution considered too “speculative” to credit three months ago)[3] has in fact been implemented and that it has “significantly alleviated” congestion in the Northern Neck Peninsula, and to be more precise, there has not been any congestion in the area at all since March 15, 2022, nearly four weeks after we issued our order.[4]  Yet today’s order finds that there is no “guarantee” that the constraint may not recur while the underlying upgrade is in the works and thus we do not reinstate the Transmission Constraint Policy Factor.

I object to the elimination of scarcity pricing for the same reasons I set forth in my original dissent.[5]  The facts now are even more compelling.  The Commission should not need “guarantees” that there will never be congestion to reapply the market rules designed to send signals to address congestion.  The original basis for the elimination of the Transmission Constraint Penalty Factor turned out to be overstated, exactly as I feared.  There currently appears to be no need for its continued elimination except to suppress prices.  I say let the markets work as designed and stop meddling when we see a price temporarily rise in response to market conditions.  I would grant rehearing.

For these reasons, I respectfully dissent.