Post: PJM proposes new capacity auction timelines

PJM proposes new capacity auction timelines

PJM has proposed new timelines for capacity auctions associated with the next four delivery years and related pre-auction deadlines.

In a compliance filing submitted to the Federal Energy Regulatory Commission on January 21 the Base Residual Auction for the 2023-24 Delivery Year would be held June 8, 2022, with the first and second incremental auctions cancelled. Previously, this auction was planned for January 25, 2022.

The proposed revised auction schedule will delay the upcoming capacity auctions by over four months. It also continues to compress auction timing and pre-auction activities as PJM seeks to return to the normal three-year-forward auction, beginning with the capacity auction associated with the 2027-28 Delivery Year, scheduled for May 2024.

Under PJM’s proposal, the other auction dates would change as follows:

• 2024-25 Delivery Year: Auction would move to December 2022 from August 2022, with the first and second incremental auctions canceled.
• 2025-26 Delivery Year: Auction would move to June 2023 from February 2023, with the first and second incremental auctions canceled.
• 2026-27 Delivery Year: Auction would move to November 2023 from August 2023, with the first incremental auction canceled.
• PJM proposes to retain the deadlines for pre-auction activities that are unrelated to the energy and ancillary service offset or the general delay of the auction.

Wayne Muncaster, VP for North America at GridBeyond, commented:

Auctions are usually held annually in May to procure resources three years ahead. PJM did not conduct capacity auctions between 2018 and 2021 after FERC determined that the market rules were unjust and unreasonable due to their treatment of state-subsidized clean energy resources. FERC then approved a PJM proposal to overhaul its reserve market. The most recent auction, for the 2022-23 Delivery Year, was originally scheduled to be held in May 2019 but was postponed until 2021 as FERC considered approval of new capacity market rules, specifically the Minimum Offer Price Rule. The next auction was scheduled to be held on 25 January, but was postponed owing to a direction from FERC last year, which reversed parts of the previous determination. The order requires PJM to, among other things, revert to a historical energy and ancillary service offset – the revenue a generation resource earns in PJM’s Energy Market and ancillary services markets to offset costs – in calculating certain capacity offers. In a separate but filing issued the same day, PJM also requested rehearing of the Commission’s order on voluntary remand.