PJM files request with FERC to delay 2022/23 capacity auction

3074

PJM on Aug. 13 asked the Federal Energy Regulatory Commission for a one-time waiver from its tariff to allow a short delay in the annual capacity auction for the 2022/23 delivery year.

The filing requests the auction be moved from May to Aug. 14, 2019. The motion follows requests from several stakeholders, including the Organization of PJM States Inc., for more time to reply to FERC’s June 29 ruling on PJM’s proposed capacity market reforms.

In that order, FERC found that PJM’s tariff was unjust and unreasonable because it fails to protect the integrity of competition in the wholesale market against state subsidies for favored generation resources. (See Working together to reconcile state policies with competitive wholesale electricity markets.)

The commission set a 90-day paper hearing to determine a just “replacement rate,” or new capacity market rules, with a decision expected by Jan. 4.

“Given the tight filing windows, it is understandable that stakeholders are seeking additional time to forge proposals that best reflect FERC’s guidance,” said Stu Bresler, senior vice president – Operations and Markets.

PJM’s request is contingent on FERC extending the paper hearing. Under the suggested revised schedule, initial filings would be due Oct. 11 instead of Aug. 28, and replies would be due Nov. 28. A final order of compliance would be requested by March 15, 2019.

“PJM does not take this action lightly,” Bresler said. “But a short delay would allow us to provide an orderly auction process and give market participants sufficient time to understand the new market rules and develop their strategies for participation.”

Granting of the request would also give FERC appropriate time to deliberate on the issues before ruling, PJM noted it its filing.

PJM has worked diligently to develop a mechanism that will address concerns in PJM’s capacity market outlined by FERC in its recent order. As part of this process, PJM is soliciting stakeholder input on a number of details needed to implement such an approach. (See PJM, stakeholders weigh draft plan to reshape capacity pricing.)

The second of two special meetings of the Markets and Reliability Committee to engage stakeholders in the discussion is scheduled for Aug. 15.

A delay in the annual capacity auction would be unusual but is not unprecedented. The auction for the 2018/19 delivery year, held in 2015, was pushed back from May to August to allow for the implementation of the Capacity Performance product.