Madison council hears warning on rising electric costs tied to PJM capacity rules

Brian Vida, executive director of the Public Power Association of New Jersey, told the Madison Borough Council that municipal electric utilities across the Mid-Atlantic face sharply higher capacity costs driven by changes in the regional grid operator’s rules and a backlog of generation projects.

Vida said Madison’s wholesale capacity charge is rising roughly 250% this year, from about $800,000 to $2,750,000, and he warned those costs are not unique to Madison. “Madison’s capacity costs are actually rising 250% this year. They’re going from 800,000 to about $2,750,000,” Vida said.

The increase matters because capacity — the portion of electric bills that pays for reserve generation and reliability — now makes up a larger share of municipal wholesale costs. Vida told the council the upward pressure comes from four broad factors: increased demand (notably large data…