FERC Approves New Capacity Auction Date, Pre-Auction Deadlines

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The Federal Energy Regulatory Commission has approved PJM’s request to move the annual capacity auction for the 2023/2024 Delivery Year to Jan. 25, 2022, from Dec. 1. The order, issued Monday, also accepted PJM’s previously proposed pre-auction deadlines impacted by the revised Market Seller Offer Cap.

In addition, subsequent Base Residual Auctions through the 2026/2027 Delivery Year and one Third Incremental Auction for the 2023/2024 Delivery Year will be rescheduled to later dates. PJM will return to the normal, three-year forward schedule in May of 2024 with the BRA for the 2027/2028 Delivery Year.

The changes stem from efforts to comply with a March 18 FERC order ruling that the existing default market seller offer cap was unjust and unreasonable.

The new deadline for capacity market sellers to request must-offer exceptions associated with resource deactivations and unit-specific offer caps associated with the BRA for the 2023/2024 Delivery Year was set to Oct. 1. The previous deadlines were July 19 and Aug. 3, respectively. The Market Monitor now has until October 31, 2021, to review unit-specific offer cap and must-offer exception requests, while PJM will make its final determination of the requests by November 25, 2021.

While the requested Oct. 1 deadline would provide for PJM’s final determinations on unit-specific offer caps and must-offer exception requests before the capacity auction scheduled for Dec. 1, it would not leave sufficient time for sellers disputing PJM’s final determination to seek additional remedy from the Commission, PJM said in its request to delay the auction. PJM also noted that a shorter time frame would not be feasible because it expects a high volume of unit-specific requests, many from sellers who have not previously made such requests.