Transforming Energy Lecture: Dr. Paul Sotkiewicz

Friday, February 6, 2015
4:00 p.m.-5:30 p.m.
1202 Martin Hall
Amanda McCrum
301 405 9378
amccrum@umd.edu

Dr. Paul M. Sotkiewicz, Chief Economist - Market Services Division, PJM Interconnection

"The Effect of EPA’s Proposed Clean Power Plan on PJM’s Markets: An Economic Analysis"

Abstract
On June 2, 2014 the U.S. Environmental Protection Agency released its proposed rule for reducing greenhouse gas emissions in the form of carbon dioxide from existing fossil-fueled electric generating units known as the Clean Power Plan. On September 2, 2014 the Organization of PJM States, Inc., (“OPSI”) which represents state utility regulators in the PJM Interconnection footprint, requested PJM analyze some of the potential economic impacts of the EPA proposed Clean Power Plan under a variety of scenarios including a comparison of regional compliance versus state-by-state compliance. PJM supplemented the OPSI request with additional scenarios related to different assumptions regarding natural gas prices, available energy efficiency, renewable energy resources, and available new entry of RE and natural gas combined cycle  resources, plus three additional state-by-state compliance scenarios and an emissions rate based compliance scenario.

In total, between the OPSI requested and PJM additional scenarios there are 17 different assumption scenarios each run with and without the Clean Power Plan. PJM ran almost all of these scenarios for simulation years 2020, 2025, and 2029. PJM’s analysis and evaluation of the effect of the proposed Clean Power Plan on PJM’s markets and on potential reliability implications will be presented. This will include:1)  total emissions, emissions rates and carbon dioxide prices; 2) locational marginal prices (LMP) effects; 3) changes energy market payments by load; 4) percentage of generation by fuel type; 5) compliance costs associated with re-dispatch to lower emitting natural gas resources; and 6) fossil steam generation capacity at risk for retirement benchmarked against the Net Cost of New Entry for natural gas combustion turbines and combined cycle resources.

Biography
Paul Sotkiewicz is the Chief Economist for the Market Services Division of PJM Interconnection. Dr. Sotkiewicz provides analysis and advice with respect to the PJM market design and market performance including demand response mechanisms, intermittent and renewable resource integration, market power mitigation strategies, capacity markets, ancillary service markets, and the potential effects of environmental policies on the PJM markets.

Dr. Sotkiewicz is currently working on gas/electric coordination, EPA GHG, and RPM capacity market design issues. Previously, Dr. Sotkiewicz has led PJM’s initiative to reform shortage pricing and the PJM analysis of the effects of the recent EPA-issued MATS and CSAPR regulations on generation retirements. Dr. Sotkiewicz also led the teams that developed the whitepapers examining transmission cost allocation and the potential effects of climate change policy on the PJM energy market. Dr. Sotkiewicz has also been involved in multiple capacity market design changes including the Minimum Offer Price Rule, the examination of changes to demand response compensation, the development of Price Responsive Demand.
Prior to joining PJM, Dr. Sotkiewicz served as the Director of Energy Studies at the Public Utility Research Center (PURC), University of Florida where he designed and delivered executive education and outreach programs in electric utility regulatory policy and strategy for professionals in government, regulatory agencies, and industry.

Dr. Sotkiewicz also served as an Economist in the Office of Economic Policy and later on the Chief Economic Advisor’s staff at the United States Federal Energy Regulatory Commission (FERC) where he conducted research, analysis, and advice on market design issues related to the ISO/RTO markets. Dr. Sotkiewicz was an Instructor in the Department of Economics at the University of Minnesota where he earned the Walter Heller Award for Outstanding Teaching of Economic Principles four times. Dr. Sotkiewicz earned a Bachelor of Arts in history and economics from the University of Florida, a Master of Arts and Doctorate in Economics from the University of Minnesota.

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