East Kentucky Power Cooperative Submits Comments on PJM's Proposal to Cost Allocate Costs of Eddystone Units 3 and 4

East Kentucky Power Cooperative, Inc. has submitted comments to the Federal Energy Regulatory Commission regarding PJM Interconnection, L.L.C.'s proposal to cost allocate the costs of Eddystone Units 3 and 4. The cooperative, which serves 16 distribution cooperatives in the western part of the PJM region, is concerned that PJM's proposal to allocate costs on a region-wide basis could have unintended consequences, including discouraging LSEs from meeting their mutually agreed upon obligations to share reserves under the Reliability Assurance Agreement Among Load Serving Entities (RAA). EKPC argues that cost allocation should be based on locational cost causation, rather than on a region-wide basis, to ensure that costs are borne by those responsible for the necessity of retaining generation resources under a DOE Order.

Key Takeaways:

• EKPC is concerned that PJM's proposal to allocate costs on a region-wide basis would socialize costs that are not justified and could distort incentives in the current market design.
• EKPC argues that cost allocation should be based on locational cost causation, rather than on a region-wide basis, to ensure that costs are borne by those responsible for the necessity of retaining generation resources under a DOE Order.
• The DOE Order covers only 2 units for a 90-day period of time, but extensions of the order, as well as additional orders covering other units, may possibly be issued thereafter.
• PJM stakeholders agreed to undertake additional discussions about what cost allocation methodology should apply to any extended Eddystone Units 3 and 4 order or any new orders issued by the DOE.
• EKPC supports PJM's narrowly tailored proposal applicable to the instant DOE Order and encourages the Commission to narrowly tailor its decision to the appropriateness of this specific proposal applied to Eddystone Units 3 and 4.
• Denise Foster Cronin, Vice President of Federal and RTO Regulatory Affairs at East Kentucky Power Cooperative, signed the comments on behalf of the cooperative.
• The comments were filed with the Federal Energy Regulatory Commission on July 7, 2025.
• Eversheds Sutherland (US) LLP, a law firm, represented East Kentucky Power Cooperative, Inc. in filing the comments.

Statistics:

• 16 distribution cooperatives are served by East Kentucky Power Cooperative in the western part of the PJM region.
• 2 units (Eddystone Units 3 and 4) are covered by the DOE Order for a 90-day period of time.
• July 7, 2025, is the deadline for comments on PJM's proposal.
• July 7, 2025, is also the date by which the DOE must publish a methodology to identify current and anticipated reserve margins for all regions of the bulk-power system regulated by the Federal Energy Regulatory Commission.
• 1,000 words is the approximate length of the comments submitted by East Kentucky Power Cooperative, Inc.

Sources:

• PJM Interconnection, L.L.C., Docket No. ER25-2653-000, "Proposal to Allocate Costs Required to Implement U.S. Department of Energy Order No. 202-25-4 of the Secretary of Energy Pursuant to Federal Power Act Section 202(c)" (filed June 26, 2025)
• East Kentucky Power Cooperative, Inc., Comments of East Kentucky Power Cooperative, Inc. (filed July 7, 2025)
• Federal Energy Regulatory Commission, Docket No. ER25-2653-000
• East Kentucky Power Cooperative, Inc., "Initial Post-Technical Conference Comments of East Kentucky Power Cooperative" (filed July 7, 2025)
• Eversheds Sutherland (US) LLP, a law firm, represented East Kentucky Power Cooperative, Inc. in filing the comments.