Analysis

Across much of the United States, buyers and sellers of electricity transact in wholesale electricity markets critical for facilitating the entry, retention, and exit of resources to assure a cost-effective, reliable transmission system operates in a technology-neutral manner.

Current market designs have been relatively well-suited to the technical characteristics of generation technologies and policy requirements of the past.

However, several factors including the pace and scale of the emissions reduction challenge, the proliferation of intermittent zero marginal cost generation, the growing role of the grid across the economy, climate resilience concerns, and grid modernization are upending historic assumptions underpinning today’s markets and warrant a new look at power market design.

To advance this dialogue, Exelon Corporation asked EJM Associates to lead a dialogue to identify solutions, hear from a broad suite of stakeholders, and—if possible—approach consensus for wholesale electricity market reforms needed to accommodate a transition to a clean, low- to no-carbon future. This white paper reflects discussions from two stakeholder workshops conducted under Chatham House Rule, including guideposts for evaluating reforms and several promising options for PJM market reform.