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 Friday to the Federal Energy Regulatory Commission.
The filing is in response to the Commission’s Dec. 22, 2021, order on voluntary remand of its May 2020 reserve-pricing order. The order on voluntary remand 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.
Under PJM’s proposal, the Base Residual Auction for the 2023/2024 Delivery Year would be held June 8, 2022, with the first and second incremental auctions canceled.
Previously, this auction was planned for Jan. 25, 2022 – that date itself delayed from Dec. 1, 2021 – as PJM worked to comply with a FERC order ruling that the previous Default Market Seller Offer Cap was unjust and unreasonable.
In a separate but related filing Friday, PJM also requested rehearing of the Commission’s order on voluntary remand.
The proposed revised auction schedule will delay the upcoming capacity auctions by about 4 ½ 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 2027/2028 Delivery Year, scheduled for May of 2024.
The other auction dates would change as follows:
- 2024/2025 Delivery Year: Auction would move to December 2022 from August 2022, with the first and second incremental auctions canceled.
- 2025/2026 Delivery Year: Auction would move to June 2023 from February 2023, with the first and second incremental auctions canceled.
- 2026/2027 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.
To avoid the potential need to seek future waivers, PJM is proposing only the month and year of the impacted auctions and not a specific date.
In the interest of providing market certainty, PJM is also requesting a comment period shortened to seven days.
The PJM capacity 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. Auctions are usually held three years in advance of the delivery year. The most recent auction, for the 2022/2023 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.