To the Editor:
A front page article in the Feb. 12 Herald had the comforting title “Electricity Consumers Avoid $21B Cost Hike.” Readers may have missed the uncomfortable fact that ratepayers will first have to pay a $12.5B cost hike beginning this June. The share paid by Atlantic City Electric customers will be via a 17% rate increase that was just approved. Another increase of $6.6B next year is all but certain.
Don’t bother writing letters of protest to Atlantic City Electric because it is not at fault. Our regional grid operator, PJM, has been warning for years that we are not generating nearly enough new supply to meet accelerating demand for electricity.
PJM estimates that we will need 50 gigawatts of new capacity over the next five years. Last year, we added just 2 gigawatts. This imbalance has caused prices to skyrocket in the PJM capacity auction from $29 per megawatt-day last year to $270 for the year starting this June.
The upcoming auction for next year will likely hit the price cap, which PJM agreed to lower to $325 from $500. Only the most cheerful optimist can look at this situation, with prices going from $270 to $325, and be happy that prices won’t be going to $500! A pessimist would point out that suppliers might not commit to the capacity we need to avoid outages at the reduced-but-still-very-high price cap.
We may reasonably ask our leaders where will we find the sorely needed new supply of electricity. The Vogtle nuclear plants in Georgia took 15 years and $35B to build, making nuclear the most expensive possible source. We don’t have the wide open spaces for utility-scale solar. We didn’t want to run a natural gas line through the Pine Barrens. And we didn’t want offshore wind turbines, even if they could be placed out of sight, 30 miles away from the beaches.
Our leaders should be problem-solvers not finger-pointers. How do they plan to solve this one?
Editor’s note: The writer last fall was the Democratic candidate for the House of Representatives seat in the 2nd District.
