PJM costs have continued to increase as a result of changes to transmission rates in both NJ and PA. This is mainly driven by a component called Network Integration Transmission (NIT). This price mechanism is in place to allow PJM to fund upgrades to the local transmission system that ensure reliability and efficiency. These can be operations upgrades, economic upgrades or public policy upgrades. Costs are allocated to the local electric zone a client resides in. While this can potentially impact all zones, it has had the most financial impact for clients within the PSEG, MetEd, and Penelec territories. As a long line of NIT’s cost increase, PSEG announced this rate will be raised another 31% starting Jan 2020. Both MetEd and Penelec will see an increase of 29% in 2020.

Steps can be taken to try and manage these costs. Large commercial clients have the ability to actively manage their local transmission tag which is driven by their peak load obligation during their local system peak. This can be achieved by curtailing load during potential events or exploring opportunities to reduce the overall load at the site through efficiency projects.

To see how this strategy could help your organization and start accurately setting energy budgets for future years, email Michael at michael.wirkus@atlasretailenergy.com.

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