A new study commissioned by PJM, the regional transmission organization serving Ohio, finds that wholesale markets are providing the benefits they were designed for: lower costs, greater efficiencies, innovation, and attraction of cost-effective generation.
The report debunks the claim that wholesale markets are forcing premature retirements of legacy generation units. It finds that retirement rates are similar in market and regulated areas.
The report warns state policymakers from distorting the effectiveness of the markets with subsidies to interests claiming that the markets aren’t working.
“The simple fact that a generating facility cannot earn sufficient market revenue to cover its going-forward costs does not reasonably lead to the conclusion that wholesale markets are flawed. More likely, it demonstrates that the generating facility is uneconomic,” states the report.