Author: Monique Hanis   Published: 6/30/2020          AEE

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June 30, 2020 Washington D.C. – As U.S. policymakers look for cost-effective ways to tackle climate change, a diverse coalition of power generators, trade associations, and think tanks last week sent a letter encouraging PJM to continue its examination of the policy options and implications of carbon pricing in its market. The request comes at a time when many states in PJM either have, or are considering, policies that reduce carbon emissions in the electric sector and are grappling with how best to reconcile those policies with wholesale markets.

As states consider policy levers to reduce carbonemissions and integrate cleaner power generation technology, carbon pricing can be a powerful, efficient, and cost-effective tool to drive down emissions and help achieve state goals, while preserving the economic benefits of competitive wholesale electricity markets.

The request does not recommend that PJM integrate a carbon price into its market at this time, or the specific method by which it could do so in the future. Rather, in light of the continued and heightened focus by states in the PJM market on reducing carbon emissions from power generation, the letter emphasizes the importance of PJM continuing its efforts to consider integrating carbon pricing in its market and exploring the practical, technical, and implementation issues related to how PJM’s markets can potentially account for state policy through carbon pricing.

The letter’s full list of signatories: Advanced Energy EconomyAmerican Council on Renewable EnergyAmerican Wind Energy AssociationApex Clean EnergyAztec SolarBayWa r.e. Solar ProjectsClearway Energy Group,  Competitive Power VenturesCypress Creek RenewablesDelaware Division of the Public AdvocateEastern Generation, EcoplexusEDF RenewablesEDP Renewables North AmericaEnel North AmericaENGIE North AmericaFirst SolarInvenergyLightsource BPNatural Gas Supply AssociationOrsted North AmericaPine Gate RenewablesRecurrent EnergyR Street InstituteRWE Renewables AmericasSkyline RenewablesSolar Energy Industries AssociationSouthern Current, and Vistra Energy.