Sacramento, CA — Consumer Watchdog wrote to Governor Gavin Newsom and legislative leaders today pointing out a new New York Times investigation about the failure of the East Coast regional grid as a cause to shelve plans for a West Coast regional grid that just passed the California Senate, SB 540 (Becker).
“An investigation published today by the New York Times reveals such serious problems in pricing and reliability from the regional electricity grid manager PJM, which serves states like Pennsylvania, New Jersey and Maryland, that five governors have been sharply critical and called for withdrawal or overhaul,” Consumer Watchdog President Jamie Court wrote.
“Electricity prices have risen 40 percent over the last five years and reliability issues have deteriorated. PJM, for its part, pointed to the Federal Energy Regulatory Commission (FERC) as the problem. Governors are left largely helpless to help their states because of FERC control. FERC for its part said the regional organizations are ineffective and, FERC chair Mark Christie, asked at meeting last week if the organizations had failed and should be replaced. “
Read the letter and the investigation.
“Given this record, why would California rush headlong into a regional market – particularly without the check and balance of the legislature getting to vote again before joining in 2027?” Court continued. “The reason is because industry and its powerful electricity workers union demand it. That’s not good enough for consumers, for the environment, and it shouldn’t be good enough for any of you. This investigation is a warning about what’s to come if we don’t learn from the experiences of the past and of other states. I urge you to take it seriously or the consequences will be shared by all of us.”
“What the problem is at PJM is that it is controlled and influenced by the corporate energy companies that constitute its membership,” said Tyson Slocum, director of the energy program at Public Citizen, a nonprofit research and consumer group. “It puts energy company lobbyists in the driver’s seat at PJM.”
“What is clear from this story is that a regional market is no panacea for fulfilling the growing power needs of the state driven largely by AI data centers,” said Court. “This is not the time to be throwing California’s electricity needs to a regional organization that California cannot control and is not subject to California’s price and reliability laws put in place post Enron. Yet that is exactly what SB 540 (Becker) does. It trusts the traders to create a viable system despite the evidence of their inability to do so elsewhere and their profit motive to make that system as expensive as possible.”
Court pointed to statements (transcript) by FERC Chairman Christie last week calling into question the viability of a regional organization to mediate between the interests of coal-using and non-coal-using states and the viability of the market itself.
“After a quarter century of using these administrative constructs called markets, particularly capacity markets, is it time to say, and particularly with regard to the capacity markets, have they failed? And should they be replaced? And if they should be replaced, what should they be replaced with? That’s a compelling question, and I think after 25 years, it is time to ask it.”
