Regional CPP Analysis: Feedback from PJM States

In September, PJM asked the Organization of PJM States, Inc. (OPSI) for feedback as it considered how to approach modeling and analysis of the final CPP.  PJM stated that it planned to use the same modeling philosophy as was used in PJM’s analysis of the proposed rule and noted a few additional points related to the final rule, including the removal of energy efficiency, the shorter compliance period, and refinements related to mass-based approaches.

Recently, OPSI provided input on PJM’s preliminary plans for modeling economic impacts associated with the final CPP.  In this letter OPSI made recommendations including: (1) incorporate the continued participation of Maryland and Delaware in RGGI as part of the business as usual case; (2) provide modeling results for 2023, 2026, 2028, and 2030; (3) use updated forecasts for fuel prices; (4) model at least three sensitivities involving energy efficiency; and (4) run scenarios to compare rate-based to mass-based approaches, using various assumptions.

In November 2014, PJM’s preliminary analysis of the proposed CPP provided information about potential effects on PJM’s energy market.  In March 2015, PJM released its Economic Analysis of the EPA Clean Power Plan Proposal.  In this report, PJM looked at 17 distinct scenarios with and without the CPP.  The analysis suggested that retirements would likely occur gradually, electricity production costs would increase, the price of natural gas would likely be the main driver of associated costs, and regional compliance options would likely cost less than state-by-state options.  PJM also released an economic analysis with state-level detail.  And in July, PJM released its Reliability Scenario Studies Related to the Proposed Clean Power Plan.

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