Energy industry coalition calls on PJM to maintain carbon pricing considerations

A coalition of more than two dozen energy industry groups wrote the regional transmission organization PJM Interconnection LLC this week to implore it to continue examining carbon pricing for its market, both in terms of policy options and their implications.

The letter was in response to ongoing efforts by U.S. policymakers to grapple with the reality of climate change through cost-effective solutions. Numerous states either have or are considering policies to reduce carbon emissions in the electric sector without harming wholesale markets.

“PJM is currently grappling with how to reconcile wholesale markets and state policies related to reducing carbon emissions,” the signatories wrote. “Given the current interest in exploring how PJM’s competitive wholesale markets can be better aligned with state policy objectives, PJM, stakeholders, and state regulators need to continue to discuss issues raised regarding integrating state carbon pricing policies in PJM’s market. To that end, it is paramount that the Carbon Pricing Senior Task Force continue to explore practical, technical, and implementation issues related to how PJM’s markets can potentially account for state policy through carbon pricing.”

Signatories included diverse groups, such as the Advanced Energy Economy, the American Wind Energy Association, the Natural Gas Supply Association, the Solar Energy Industries Association, and Vistra Energy.

All sought to emphasize the importance of carbon pricing’s potential, though none went so far as to recommend a carbon price be integrated into PJM’s market currently. Neither did they recommend any specific means by which that might take place in the future. They agreed, however, that carbon pricing should be examined for practical, technical, and implementation issues related to PJM’s markets as a means of accounting for changing state policy.