AR278

An Assembly Resolution expressing support for a competitive wholesale energy market.

Whereas, PJM Interconnection (PJM) is a regional transmission organization servicing the State of New Jersey, the District of Columbia, and 12 additional states, that is responsible for managing and operating the high voltage, multi-state electric grid, coordinating the flow of electricity from power plants to local utilities, and operating the wholesale energy market; and

Whereas, In the wholesale energy market, energy generators bid to generate the electricity transmitted by PJM to 65 million people. PJM directs the lowest-cost power resources to generate electricity first and only transmits more expensive resources incrementally as needed, while reserving the highest-cost resources for brief periods of peak consumer demand; and

Whereas, Because the lowest-cost power resources are transmitted first, PJM’s wholesale energy market encourages competition among energy generators to keep the price of electricity low, and has saved consumers in PJM’s service region, including New Jersey, between $3.2 and $4 billion in electricity costs annually; and

Whereas, The low electricity costs driven by PJM’s wholesale energy market have resulted in economic growth in regions serviced by PJM because commercial and industrial businesses are attracted to affordable electricity prices and those living within PJM service regions have more disposable income to spend on goods and services; and

Whereas, PJM offers reliable service to consumers by operating two reliability markets. In the capacity market auction, electricity generators agree to generate electricity for PJM service regions at a future date to meet future electricity demand, while PJM’s ancillary service market ensures energy reserves are available for quick transmission during emergency situations; and

Whereas, PJM runs a large and complex system with inter-zonal transmission lines and load diversity, which enhances reliability during peak customer demand and emergency situations by seamlessly transmitting electricity from zones at excess capacity to zones in need of electricity; and

Whereas, The competitive environment created by PJM’s wholesale energy market encourages energy generators to invest in technologies that reduce emissions harmful to the environment, such as natural gas power plants in favor of coal power plants, because environmentally friendly technologies are more cost-effective and provide a competitive advantage to energy generators; and

Whereas, One megawatt of electricity transmitted by PJM today is produced with 13 percent less carbon dioxide than it was 10 years ago, 30 percent of PJM’s generation mix is less carbon intense than it was 10 years ago, resulting in a reduction of carbon dioxide emissions in regions serviced by PJM by 39 percent since 2005; and

Whereas, It is fitting and proper for this House to express support for the competitive wholesale energy market operated by PJM Interconnection to ensure that all New Jersey residents continue to have access to electricity that is affordable, reliable, and generated by environmentally friendly means; now, therefore,

Be It Resolved by the General Assembly of the State of New Jersey:

1. This House expresses support for the competitive wholesale energy market operated by PJM Interconnection so that all New Jersey residents continue to have access to electricity that is affordable, reliable, and generated by environmentally friendly means.

2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Clerk of the General Assembly to the Governor and Lieutenant Governor of the State of New Jersey.

STATEMENT

This resolution expresses support for the competitive wholesale energy market operated by PJM Interconnection (PJM). PJM is a regional transmission organization that services 65 million people in the State of New Jersey, the District of Columbia, and 12 additional states. PJM is responsible for operating the high-voltage, multi-state electric grid, coordinating the flow of electricity from power plants to local utilities, and operating the wholesale energy market. Energy generators bid to generate the electricity transmitted by PJM in the wholesale energy market. PJM transmits the lowest-cost electricity first, then incrementally transmits the more expensive electricity as needed, and reserves the highest-cost electricity to brief periods of peak consumer demand. PJM’s wholesale energy market encourages energy generators to compete to keep the price of electricity as low as possible, and has saved consumers billions in electricity costs annually. In addition, the low electricity costs caused by a wholesale energy market have spurred economic growth in regions serviced by PJM through the attraction of commercial and industrial businesses. Consumers with lower electricity costs have more disposable income, which further attracts industry and increases the demand for goods and services.

PJM offers reliable service to consumers by operating two reliability markets. The capacity market auction ensures PJM has enough electricity to meet future electricity demand. The ancillary service market ensures energy reserves are available for quick transmission during emergencies. PJM further ensures reliable service by transmitting electricity from zones at excess capacity to zones in need of electricity. The competitive environment fostered by PJM’s wholesale energy market encourages energy generators to invest in environmentally friendly technologies that reduce harmful emissions. Many energy generators have switched from using coal power plants to natural gas power plants because environmentally friendly technologies are more cost-effective, and therefore provide a competitive advantage in the wholesale energy market. As a result, the generation of electricity transmitted by PJM today produces lower levels of harmful emissions than it did 10 years ago and CO2 emissions have dramatically decreased. PJM operates to provide New Jersey residents affordable, reliable, and environmentally friendly electricity and it is important that New Jersey residents continue to have access to PJM’s services.