Prices of scarcity are running electricity prices in PJM

The Eddistone Generation Station in Eddistone, PA, on Monday, 2. June 2025 (AP Photo / Matt Rourke) Unit 1 is retired in 2011. years. Unit 2 is retired in 2012. years. The generators set up in the service was recently built in 1970. years. See https://www.constellationenergi.com/gerating-station.htm

Copyright 2025 Associated Press. All rights reserved.

Who is now afraid of competition?

Dive recently He published a piece On independent electricity producers (IPP), which are on critics that curve IPP for growing electricity prices in areas served Reconnect PJM Covering 67 million people across the region that extends from the Atlantic coast to Chicago. This article is an interview with the Director General of the Electricity Supply Association, an industry association representing IPPS.

Basically, the EPSA’s position is that IPPs are incorrect prices and can respond to “price signals” and that IPPs are better positioned to set up to this energy crisis in relation to this energy crisis. The The argument is false For the following reasons.

First and most important, these are the principles of scarcity in the deregulated markets for electricity that drives electricity speeds of wide consumption faster than IPP build power plants. Why? IPPs understand themselves earn more money by creating scarcity or denial of supply. There is no better way to remove the supply than does not build power plants. Consequently, through the summer, the region served by PJM Spikes Price In the wholesale market of up to 50 times more electricity production costs and the PJM capacity market again exploded with prices 10 times the cost of electricity production. It is the impact of the principles for scarcity!

The fact that PJM fails to bring new power online is no surprise. The PJM capacity market was never supposed to provide incentives for the construction of new generators. It is designed to pay power plants that in a blank deadline is enough to make sure that it will be available in a few days achievements for maximum in winter and summer. This strategy creates efficiency and can reduce utility bills throughout the year. But, again, it was a plan that was designed to reward scarcity, and IPP just play.

EPSA insists that IPPs respond to “price signals” and can build new power plants faster than vertically integrated utilities can be built. What encouraged EU education is the requirements of local utilities that are currently banned from the ownership generator to change state laws so that they can possess a generation and compete to compete against stiff independent strength producers. The entire point “deregulated“Markets was to encourage competition. The hypocrisy is obvious. The IPP does not get a job in the” competitive market “, but (please) do not change this” competitive market “.

Electricity supply economies varies based on the nation. For those countries with deregulated markets with the principles of scarcity, the generators reacted by creating more scarcity because they are most paid. Daily markets only did not provide sufficient incentives for the construction of new power plants. After all, if the signing signals are priced, PJM and other competitive markets would not be in this position to view electricity prices, due to scarcity. As they say, the proof is in Pudding.

In my state of Texas, the economy grew 1.25 Trillion to $ 1.99 million between 2010 and 2021While the portfolio of shipping power plants has actually decreased. Spike up to $ 9,000 per Megawatt in a few days during the winter 2021. It did not lead to the construction of a new shipment generation.

Volvility of wild prices caused by the principles of scarcity in Texas encouraged unseen growth of wind, solar and batteries (measures of reliability in summer improved, but Winter reliability is worse than was 2021). What is often ignored is that Texas retained the lights during the lack of paying large customers like crypto miners to turn off. Reached the point in which Texas Tribune came Depressive conclusion This: “Texan Bitcoin Ruleri profits using less electricity …” In other words, IPPs do not set jobs, but create the illusion of competencies in Texas to subsidize CRIPTO MINERA to subsidize and use profit.

Or in California, a combination of accelerated retirement of nuclear and fossil fuel power plants overwhelmed the ability of the daily market and a capacity market to provide economically reliable electricity. Finally Caiso paid for adding 5,000 megawatts New generations and storage. Again, where are Ipps?

It is in a public interest that there are more electricity supply to meet the demand through each network in America. Now that IPPs are faced with a potential new competition they cry. It is supported on state legislators and mesh to open their market with new competitors. National call is “all hands on deck!” If local usefulness wants to build new power plants that compete with IPPs, which will be argued that this is not a free market solution? Certainly not IPPs, who claim to love competition, unless this competition arises from the actual competitor who earns money producing electricity, not if sustained by customers.