PSEG Power’s decision to retire two coal-burning plants contributes to steep increase, along with continuing problems of congestion on the grid
Tom Johnson reports for NJ Spotlight:
After months of mostly good news about energy costs, the price consumers will pay to power their homes and businesses is shooting upward once again.
Electricity prices spiked higher in an obscure auction this week that helps determine what customers pay on their monthly bills, a sign of the continuing volatility of the competitive energy marketplace.
The auction, conducted by PJM Interconnection, the operator of the nation’s largest power grid, locks up power supplies the region will require in the future, but this year the prices for customers in New Jersey increased dramatically, a year after they fell sharply.
PJM conducts the auction to ensure there is enough power to meet demand for the 65 million people it serves. In doing so, it purchases so-called capacity, reserve power to call on from electricity suppliers to provide to customers. PJM secures supplies three years in advance to ensure reliable capacity.
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