Is PJM’s Reserve Proposal Helping or Hindering a Transition to a Clean, Flexible Grid? ($)

PJM is seeking to procure more reserves at higher prices by augmenting its operating reserve demand curve.

Because the reserve and energy markets interact, energy prices will increase too, writes Nicholas Institute Senior Counsel Jennifer Chen for RTO Insider. Consumer costs could grow by $512 million to $1.7 billion per year, and about 95 percent of this revenue would flow to fossil and nuclear resources.

CO2 emissions could increase by up to 537,000 short tons (or decrease by about 116,000 short tons if higher prices bring down energy consumption). On the high end, CO2 emissions would roughly equal driving another 100,000 cars around for a year.

Comments on PJM's proposal are due May 15 at FERC.