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Exploring the New Math Puzzle of a PJM Intervention
What the White House’s principles for PJM could mean for prices, reliability and the companies building for AI.
CSIS
In brief
Written the day the White House National Energy Dominance Council released its principles for PJM, which urge the grid operator to build more than $15 billion of new baseload generation, this piece works through what such an intervention would mean. Arushi separates PJM’s money problems from its physical ones, explains how charging new generation to large loads could lower rates for everyone else through a denominator effect, and maps who gains and who loses as large loads split into distinct tiers. She notes that the plan breaks PJM’s single market structure.
Key points
- 01Long-term contracts can solve PJM’s money problem, but not how long new plants take to build.
- 02Assigning new generation costs to large loads could lower everyone else’s rates through a denominator effect.
- 03Large loads may split into tiers: residential customers and big tech gain, mid-market providers and legacy generators feel the squeeze.
