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PPL CEO: Allowing Pennsylvania Utilities To Directly Invest In Generation Is "Most Impactful" Solution To Address Resource Adequacy "Gaps"
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During an earnings call today, PPL Corp. CEO Vincent Sorgi said that allowing Pennsylvania distribution utilities to invest in generation would be the most "impactful" and timely solution to address resource adequacy "gaps" facing the state and PJM
Addressing the recently announced delay of PJM's 2026-27 base residual auction for capacity, Sorgi said, "I think that just reinforces the need for the state [Pennsylvania] to take control of this issue."
Sorgi noted that discussions continue to occur with Pennsylvania lawmakers and other policymakers about legislation to address resource adequacy concerns
"I truly hope that Pennsylvania continues to pursue state solutions, and does not slow that down as a result of the delay in the auction," Sorgi said
"We continue our discussions with all of the important decision-makers, the Governor's office, the state legislature, as well as the PUC. In fact, the PUC has scheduled a resource adequacy technical conference towards the end of this month; we'll be participating in that," Sorgi said
"And then as we've talked in the past, just thinking about what this legislation could look like. Obviously, we don't have anything out there right now to comment on. But as I think about the options, obviously, there's the permitting of utilities to invest in generation, which we've been talking about, and they could support us in building that new generation in the state, putting it in rate base," Sorgi said
"[W]e continue to believe that allowing the utilities to directly invest in the generation would be the most impactful in getting generation built in the state -- certainly in the time frame necessary to address the gaps that we're seeing around resource adequacy," Sorgi said
Sorgi said that long-term PPAs between the utilities and merchant generators could be another solution on the table
"I think they [lawmakers, etc.] can also create some incentives for utilities and the IPPs to enter into long-term power purchase agreements, beyond what we are currently able to do under our default service plan. So we have some ability to do that, but it's not as extensive as I think potentially they could incentivize us to do," Sorgi said
Sorgi also noted the loan programs being used in ERCOT
"I think it's reasonable to believe or expect that any new legislation in the state [Pennsylvania] could include some or all of these ideas," Sorgi said
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November 1, 2024
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Reporting by Paul Ring • ring@energychoicematters.com
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