RMI and GridLab call for PJM to shift to an energy-centric market to speed new generation

PJM Interconnection, the grid operator serving a large swath of the mid-Atlantic and Midwest, is weighing a big change to how it pays for power plants. Two nonprofit groups, RMI and GridLab, along with the consulting firm Brattle (working for Google), have proposed that PJM drop its current setup — which pays generators both for having capacity available and for the energy they actually deliver — in favor of an "energy-only" market that pays mainly for power actually produced. They argue the current system isn't attracting enough new generation, like solar and battery storage, fast enough to meet rising demand. As evidence, they point to Texas's grid, which uses an energy-only model and has added more generation than other regions in recent years.

For this to work, the proposals say PJM would also need to speed up and simplify the process new power plants go through to connect to the grid, and set up long-term energy contracts to protect ratepayers from price swings. Any change would take years to phase in carefully, according to Brattle, since it involves reworking how utilities lock in long-term power deals. Not everyone favors the switch — several stakeholders in PJM's process have pushed back against an energy-only design.

None of this changes your electric bill or rebate options right now. It's an early-stage policy debate about how the region pays to build new power plants, which could eventually affect electricity prices and how quickly new clean energy sources come online. PJM plans a workshop in late September or early October to hash out the proposals further.