PJM has been in existence for many years. It is a regional wholesale market and system which includes Pennsylvania, New Jersey, Maryland, Delaware and the District of Columbia. It functions as an ISO and power exchange. Because the PJM wholesale market is established and stable, it appears to be able to attract investment in new generation sufficient to meet expected future demand. PJM has an internal planning process designed to identify market flaws and to remedy them.
Customers are active participants.
About 2500 MW's of new plant is under construction in the PJM region and much more is waiting PJM evaluation, although there is no guarantee that any of these units will actually be built. In Maryland, while we have retail price freezes like in California, the utilities were able to retain their assets or arrange for long-term power purchase agreements to meet these future obligations. In Maryland, when the price freezes end, customers who have not switched to a new provider will not face spot market prices. Instead each utility's load at that time will be subject to an RFP process so that if the wholesale market is competitive, suppliers will submit bids producing reasonable prices. If the wholesale market is subject to easy manipulation, insufficient market power monitoring and little or no investigation of market abuses and no strong enforcement actions, the retail market will fail.