Senior Economist, PJM Interconnection, USA

Track B, Session 11

SHORT BIOGRAPHY

Paul M. Sotkiewicz, Ph.D. Senior Economist in the Market Services Division at the PJM Interconnection, provides analysis and advice with respect to PJM’s market design and market performance.
Currently Dr. Sotkiewicz is leading initiatives to reform scarcity pricing and compensation for demand resources in PJM’s energy market. Dr. Sotkiewicz also led the team that developed the recent whitepaper examining the potential effects of climate change policy on PJM’s energy market.
Prior to joining PJM, Dr. Sotkiewicz served as the director of PURC, University of Florida, as an economist in the Office of Economic Policy and later on the Chief Economic Advisor's staff at the FERC, as an Instructor in the department of Economics at the University of Minnesota. Dr. Sotkiewicz received a master of arts (1995) and doctoral degree (2003) in economics from the University of Minnesota, and a bachelor of arts in history and economics (1991) from the University of Florida.

ABSTRACT SUMMARY

"Potential Effects of Proposed Climate Change Policies on PJM’s Energy Market"

The effects of potential climate change policy outcomes, modeled as different prices on carbon dioxide (CO2) emissions, on wholesale market prices, generation dispatch, energy expenditures, and emissions for PJM’s Energy Market for the year 2013. At forecast fuel prices for 2013, generation dispatch would remain largely unaffected in PJM for CO2 prices up to $35-$40/ton resulting in minimal emissions reductions, and regardless of natural gas prices 75-80 percent of the CO2 price, expressed in dollars per short ton, is transmitted to increases in average wholesale energy prices. Sensitivity analyses regarding the effects of different amounts of energy efficiency, modeled as reductions in total energy consumption, and wind generation deployment mitigates the wholesale energy price and expenditure impacts of climate change policies, and results in larger emissions reductions that would be observed with only generation re-dispatch as an emissions mitigation option.