PJM Backs Duke’s $9.8M ‘Stranded Gas’ Claim

Posted on: June 18th, 2014 by rgadmin

And now the lawsuits over winter’s Polar Vortex 2014 begin. Much like this winter (coldest in 22 years), this is a unique circumstance and would be record-setting.

The players:

PJM—the regional authority that calls on power generators to meet expected and actual electric (power) demand (PJM could represent any utility that was affected).

Duke—owns generation plants (this could be any energy marketer serving customers).

Duke Lee Energy Facility (Source: Bill Spindler, SouthPoleStation.com)

Duke Lee Energy Facility (Source: Bill Spindler, SouthPoleStation.com)

FERC—the federal government overseeing wholesale interstate markets (this of as the referee).

Like all power suppliers when the utility (in this case PJM) called for more power to meet the record demand for electricity (natural gas) the generators had to respond. Duke went out and bought natural gas to generate the electricity but didn’t get paid enough from the electricity (or reselling the natural gas) to cover its cost (plus profit). Therefore, it wants to recover the cost from PJM (think all of us).

Duke is not unique. Every utility did this to every supplier during this winter. Whether it was gas or electric, it worked the same. The utility called for more and the marketers had to respond.

The idea that we (Realgy) could go back to one of the utilities that requested more gas/electricity such as NICOR, Citizens, COMED, Consumers, etc. and say that you asked us to bring more but we didn’t get paid enough so please make up the difference—well it’s laughable. However, Duke thinks it’s not!

Realgy Energy Services is an energy marketer of natural gas and electricity in Illinois, Indiana, and Michigan. We provide direct service without a utility mark-up behind 12 utilities. To learn how much we can save you and the benefits of Customer Choice please see www.realgyenergyservices.com.

Read the whole ROT Insider article, “PJM Backs Duke’s $9.8M ‘Stranded Gas’ Claim

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