PJM to Propose Capacity Auction Delay Pending Resource Adequacy Reform

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PJM informed stakeholders Monday that it will seek delay of the upcoming capacity market auctions, including the June auction for the 2025/2026 Delivery Year.

The action followed PJM Board consideration of stakeholder comments sought by its Feb. 24 letter initiating an accelerated stakeholder process to pursue capacity market design reform.

In that letter, the Board requested stakeholder feedback on whether resource adequacy would benefit by possible delay in the Base Residual Auction schedule, so that market design rule changes proposed through the stakeholder process might be implemented for all future auctions.

“In arriving at this decision, the Board recognized that, despite the implications of auction delay, reforms are necessary to the capacity market design in order to conduct an effective Base Residual Auction,” PJM stated in an email communication to stakeholders March 27. “The Board therefore determined that PJM should postpone executing any further auctions under the current rules until we go through the stakeholder process and file resulting rule change proposals with FERC.”

PJM is preparing a filing with the Federal Energy Regulatory Commission, which must approve any schedule changes. PJM is also scheduling a special Members Committee and Transmission Owners Agreement – Administrative Committee to consult with the Members prior to filing.

Preparations for the June auction will continue in the event that FERC does not accept the request, in which case PJM will proceed with the June auction as scheduled.

The first meeting of the Critical Issue Fast Path – Resource Adequacy stakeholder group to tackle capacity market reform on an accelerated basis is scheduled for March 29. The Critical Issue Fast Path process provides an orderly and facilitated path for contentious issues. 

The PJM capacity auction, called the Base Residual Auction, procures power supply resources in advance of the delivery year to meet electricity needs in the PJM service area, which includes all or part of 13 states and the District of Columbia.