FERC approves capacity market rules to avoid unjust price spike for Delmarva Peninsula customers with high energy burdens

March 9th, 2023: On February 21st, the Federal Energy Regulatory Commission (FERC) approved new capacity market rules for the PJM Interconnection that will save electricity customers on the Delmarva Peninsula over $100 million dollars in a single year.  

Sierra Club intervened in the case to provide evidence that the prior market rules would have resulted in capacity prices that would cause severe economic harm, in light of the high energy burdens already faced by many consumers in this part of PJM, which comprises most of Delaware and parts of Maryland and Virginia. PJM, the grid operator for thirteen states and the District of Columbia, had flagged the need for updated market rules to address situations where the amount of capacity it needs to procure changes as a result of the generation mix that actually offers into an auction.

In the case of the Delmarva Peninsula zone, PJM’s proposed rule change will prevent consumers from buying unnecessary extra capacity, which will avoid prices spiking to four times the normal level. FERC found that the new rules will avoid unjust capacity prices for overburdened consumers in the region, while still sending sufficient price signals for generation investment. In a news release accompanying the decision, FERC Chair Willie Phillips cited Sierra Club's evidence of the substantial burden this rate spike would have imposed on lower-income consumers.

Sierra Club intervened and filed comments in the proceeding with the Natural Resources Defense Council.  Environmental Law Program senior attorney Casey Roberts represented the Club, with excellent research and writing support from ELP legal assistant Brittany Blinder.