Ohioans' electric bills rose 21.9% year over year this February, while electric bills nationwide have seen an average increase of 9%, according to data from the federal Energy Information Agency (EIA).
Recent bill increases have been driven by long term structural changes such as rising demand from data center expansion, reshoring industry, and electrification of homes and cars. New energy supplies are bottlenecked in PJM, meaning not enough supply can respond in time to rising demand, so capacity prices have hit a record high of $333.44 per MW-day and would have gone higher expect for a temporary price cap.
In this video, Chapman and Bullock discuss how expanding quick-to-market distributed generation--medium-scale power generation that can be built in as little as two years connected to the local, not interstate, power grid--can put downward pressure on prices in two ways:
first, by expanding supply; and
second, by "peak shaving" price spikes in PJM's real time energy market, which fluctuates constantly. As the chart shared in the video shows, grid congestion leads to multiple short-duration supply bottlenecks throughout the day. Distributed generation can help to lower prices for everyone by supplying power close to where these bottlenecks are, "shaving" price spikes, which lowers the overall cost of power your local utility purchases from the interstate grid and passes along to you.
(Note: The chart in the video shows real-time fluctuations in the Locational Marginal Pricing (LMP). In PJM, this is the wholesale market price of electricity at a specific location and time, accounting for generation costs, transmission congestion, and energy losses. It represents the exact cost of delivering the next megawatt-hour (MWh) of power to a specific location.)
Distributed generation is proposed to be expanded in Ohio under a program in SB 298, by Sen. Mark Romanchuk, which would offer commercial consumers the option to buy affordably priced, reliable, in-state power through remote power generation on distressed property that can provide inflation relief before 2030 via quick-to-build, medium-scale projects connected to the local power grid. Testimony about the benefits of this proposal may be viewed here.
