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$12B of US ratepayers' money wasted on a modeling mistake in PJM

https://newsletter.semianalysis.com/p/12b-of-us-ratepayers-money-wasted
23•_delirium•1h ago

Comments

k310•1h ago
PJM Interconnection LLC (PJM) is a regional transmission organization (RTO) in the United States. It is part of the Eastern Interconnection grid operating an electric transmission system serving all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia. PJM is the largest power grid operator in the United States, serving 67 million customers from Chicago to New Jersey. (Wikipedia)

That was not clear in the article.

readthenotes1•43m ago
This reminds me of the 2013 finding that showed an earlier 2010 study praising austerity as a recovery mechanism was flawed because of an Excel calculation error and lack of diligence.

https://inthesetimes.com/article/the-excel-error-heard-round...

It also reminds me of the flaws in the London epidemiological model about how to respond to covid.

It just may be that these things should be reviewed a little closer by people who are obsessive about correctness

GianFabien•34m ago
Every "wasted $" ended up in some parasitical grifter's pocket.

Whilst these sorts of analyses are informative, they lack answers to the who profits? question.

jakewins•20m ago
The money has gone to pay power plants that can supply winter capacity, exactly as the market is designed to do.

The intention of the payments is to increase revenue for that kind of power generation capability to encourage more such plants be constructed.

The argument in the article is dubious to me. Of course the higher price isn’t leading to more generation today, that’s not the point, the point is to reward developers that build and built capacity CA needs in winter. The disagreement then becomes which model is correct about how much capacity is actually needed.. but the fact that a tiny move in demand moves the price so substantially seems to me to undermine the entire premise of the blog post, clearly supply is severely constrained?

dgacmu•9m ago
But that's why they're arguing that repricing the entire generation fleet is bad compared to having a different auction for new capacity. You don't need the same incentives to keep an existing, profitable plant online as you do to invest in a new plant.
jakewins•6m ago
I can assure you the spreadsheets at firms building plants factor in forecasts of revenue for the life of the plant into investment decisions. If they don’t pay past the first few years, that directly translates to lower forecast lifetime plant value for new plants.

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$12B of US ratepayers' money wasted on a modeling mistake in PJM

https://newsletter.semianalysis.com/p/12b-of-us-ratepayers-money-wasted
23•_delirium•1h ago•6 comments

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