Thread by @EnergyLawJeff

The "Statement of Principles Regarding PJM", reflecting the agreement between ALL of the PJM Governors and the Energy Dominance Council, is now on live on DOE's website. Details largely consistent with @JarrettRenshaw's excellent reporting last night. 1/ energy.gov/documents/stat…

@JarrettRenshaw The agreement urges PJM to conduct an emergency backstop auction to procure *new* generation capacity with an offer of 15 year contracts, with all costs of the auction allocated to utility zones with data centers that haven't self-procured or agreed to curtail. 2/

@JarrettRenshaw It also urges a two-year extension of the price cap in the existing capacity auction; improved load forecasting; accelerated interconnection for new gens procured in the backstop auction; and a new stakeholder process to fundamentally reform the capacity market. 3/

@JarrettRenshaw The governors agree to "use their authorities to allocate costs to data centers and protect residential customers" by ensuring their commissions design "rate class structures" to allocate the backstop auction costs to new data centers. 4/

@JarrettRenshaw Much of this was proposed by the Governors and data center interests in the recently concluded PJM CIFP process, with the exception of the backstop auction and the cost allocation specification for data centers who have not self procured. That proposal "failed" like the others.5/

@JarrettRenshaw There could potentially be a lot of good aspects to this, but this is not a risk free endeavor for customers. The agreement tacitly acknowledges this, noting that there could be additional costs from the 15 year contracts to allocate to utility zones that are "short". 6/

@JarrettRenshaw Also, that last paragraph with the commitments of the govs is doing A LOT of work. The cost allocation rubber meets the road there. Will the commissions go along? Do they have the tools to achieve this? Will what they get from PJM be transparent enough? 7/

@JarrettRenshaw In addition, I do wonder how they will decide whether a data center has "self-procured". Does it have to be a certain kind of contract or arrangement? Yet to be seen. 8/8

@JarrettRenshaw Some data centers will probably see this as another tool to get some certainty and address the looming social license problem they have around utility costs. Others may retreat behind the meter (hard to do completely) or to other regions.

Did I mention never a dull moment? 9/9

@JarrettRenshaw Putting out a proposal different than the one all your Governors and the President of the United State just sprung on you unannounced is . . .a choice?

https://x.com/pjminterconnect/status/2012221538842329178?s=20