PJM Analysis Makes Economic Case for Clean Power Plan

By Eliza Laubach

A region-wide electric grid operating company, PJM, released a report in March analyzing how states could comply with a proposed U.S. Environmental Protection Agency rule requiring that power plants cut carbon dioxide emissions.

The company, which extends into 14 states across the Northeast and Midwest, described lessened costs if states work together to mitigate climate change through increased renewable energy exchanges. These allow states to trade credits for renewable energy produced, which advances solar or wind power where it is already well-established and helps states that cannot easily meet the new carbon regulations.

In doing so, the region may see lower wholesale energy prices, the PJM report said, due to the investment in renewables, whose prices are steadily dropping. Natural gas will factor into overall energy prices as power plants switch to burning the more abundant, less costly fossil fuel. The report encouraged states to address energy efficiency potential, the cheapest source of energy, in both grid transmission and in homes and businesses where electricity is used.