PJM, Stakeholders Begin Accelerated Resource Adequacy Reform


PJM and stakeholders have begun an expedited stakeholder process to address capacity market design issues related to maintaining resource adequacy.

The PJM Board implemented the Critical Issue Fast Path process by letter on Feb. 24. Citing the PJM report, “Energy Transition in PJM: Resource Retirements, Replacements and Risks,” the PJM Board specifically outlined the following four work areas for stakeholders to focus on in the CIFP process:

  1. Improve the way PJM accounts for winter risk and correlated outages in reliability planning
  2. Evaluate changes to the capacity performance construct to ensure market seller offers may properly reflect the risk of taking on a capacity obligation
  3. Enhance resource accreditation to ensure resource reliability attributes are accurately determined and compensated
  4. Ensure comparable treatment of resources by aligning capacity market changes with appropriate adjustments to the Fixed Resource Requirement (FRR)

This fast-tracked stakeholder process will inform a decision by the PJM Board by late summer. A filing with the Federal Energy Regulatory Commission is targeted for Oct. 1.

These areas are being considered as “must haves” directed by the PJM Board, said Adam Keech, PJM Vice President – Market Design & Economics, during the Feb. 28 meeting of the Resource Adequacy Senior Task Force. He added that the PJM Board focus on these elements of resource adequacy does not preclude broader solution packages that include additional elements.

“These will be the centerpiece of the PJM proposal. The board is open to solutions across the spectrum that align with their objectives,” Keech said.

Critical Issue Fast Path Schedule Outlined

Stakeholders discussed a draft work plan to implement the CIFP directive. Of four CIFP stages ahead, PJM will first present an issue charge, a problem statement and an issue charge, a solution proposal and a matrix showing all options considered.

Next, PJM and stakeholders will leverage the consensus-based issue resolution process on an accelerated timeline to consider solution options. In a third stage, PJM will finalize its proposal, and stakeholders may also create alternative solution packages.

In the fourth and final state of the CIFP, proposals are presented and discussed with the PJM Board followed by an August Members Committee meeting and vote. That vote is not binding on a PJM Board decision, to be followed by a Section 205 filing with FERC targeted for Oct. 1.

Capacity Auction Timing Impacts

While outlining a process toward capacity market changes for the 2027/2028 Delivery Year, the PJM Board letter also sought stakeholder feedback on whether prior year auctions that have not been run, specifically the 2025/2026 and 2026/2027 auctions, should be adjusted or pushed back. Later in March, Keech said, PJM is expected to share more on implications of potential auction delays and seek further member feedback.