Feds Halt Electrical Power Sale Due to State Subsidies

The decision of Ohio lawmakers to subsidize nuclear and select other power plants is already negatively affecting the wholesale operation of the regionally administered power markets. Two days after Ohio enacted its nuclear bailout under HB 6, federal policymakers ordered PJM Interconnect — the nation’s largest power grid operator, whose territory includes all of Ohio — to indefinitely delay an auction to set power prices.

According to Bloomberg, “The halt lays bare the gridlock within the federal energy commission as it grapples with hundreds of millions of dollars in out-of-market subsidies that some states are creating to rescue foundering nuclear power plants.” Bloomberg notes that while some power generators have warned that state bailouts are skewing the results of auctions, the Trump administration has pressed for aid to “money-losing reactors and coal units in the name of grid resilience.”

The OMA’s energy engineer has analyzed this situation, which will be discussed at the Aug. 29 meeting of the OMA Energy Committee in suburban Cleveland. 8/1/2019