Chair Of Pennsylvania House Energy Committee: State Can Leave PJM, Create Own Capacity Market If PJM Can't "Contain" Negative Impact From Other States' Subsidies

Daryl Metcalfe, Majority Chairman of the Environmental Resources & Energy Committee of the Pennsylvania House of Representatives, said in a letter to PJM's Board and CEO that Pennsylvania can leave PJM's capacity construct and pursue a competitive capacity structure if PJM cannot "contain" the impact from state subsidized resources and provide a competitive market

"As majority Chairman of the Pennsylvania House Environmental Resources and Energy Committee, I write to you seeking assurance that Pennsylvania's competitive energy markets will be protected and not disadvantaged as you hold stakeholder discussions regarding the Minimum Offer Price Rule (MOPR) Pennsylvania has successfully adapted our state policy to be competitive in PJM's equally successful wholesale market construct," Metcalfe wrote

Metcalfe wrote that, "Pennsylvania has pursued an energy policy based on markets and not on subsidies," and wrote that, "Pennsylvania's state policies deserve as much respect and accommodation as other states in the PJM footprint. While other states certainly have the right to implement subsidies as they see fit, these decisions should not impact and unfairly disadvantage states which have chosen not to do so."

"Pennsylvania's continued participation in PJM is dependent on competitive and fair markets. Pennsylvania can leave PJM's capacity construct and pursue a competitive capacity structure if PJM cannot provide it," Metcalfe wrote

"Exiting the PJM capacity construct is a road Pennsylvania would prefer to avoid as there are clearly benefits to a broader regional market; however, if PJM cannot appropriately contain the impact of the market-distorting actions of other states to those states, Pennsylvania may have no other choice," Metcalfe wrote

"Pennsylvania will maintain competitive markets to ensure that energy consumers within our borders will benefit from low rates. In order to do so, we need capacity market prices that accurately reflect market conditions, which have not been manipulated by other states' decisions. Pennsylvania will continue to closely monitor developments both at PJM and FERC to ensure that our citizens' interests are being protected," Metcalfe wrote