Base Residual Auction Begins Today

PJM’s annual capacity auction, also known as the Reliability Pricing Model Base Residual Auction, will open today, Aug. 10, and close on Aug. 14, with results posted after 4 p.m. on Aug. 21.

The auction, for the year of 2018-19, is the first in which Capacity Performance will be implemented.

Capacity Performance significantly changes how capacity resources are compensated in PJM’s markets and is intended to improve generator performance. It works like an insurance policy; for about $2 per month, consumers are assured more reliable electric generation is available during extreme weather and other system emergencies.

Capacity Performance is “pay-for-performance,” requiring generators to commit to deliver electricity whenever PJM determines it is needed, especially to meet power system emergencies.

All existing generation capacity resources must offer into the auction. All generation capacity resources that are capable of qualifying as Capacity Performance resources, must offer as Capacity Performance resources.

Intermittent resources, storage, demand response, and energy efficiency resources are exempt from the requirement to offer as Capacity Performance resources. If they determine that they can meet the performance requirements, however, they are eligible to offer as Capacity Performance resources.

PJM’s two transitional auctions, to ease Capacity Performance into the marketplace, will take place Aug. 26-27 (for 2016/17 with results announced on Aug. 31) and Sept. 3-4 (for 2017/18 with results announced on Sept. 9).

The Capacity Market page on pjm.com has additional information about the auctions. This is also where auction results will be posted.