The Federal Energy Regulatory Commission on Nov. 8 accepted the PJM Interconnection’s proposal to move the next capacity auction (for the 2026/2027 Delivery Year) from December 2024 to June 2025 while PJM and stakeholders consider limited refinements to the capacity market rules to address stakeholder concerns.
PJM plans to submit a separate Section 205 filing to FERC to address resource adequacy issues related to capacity market rules.
While PJM’s markets currently reflect the tightening of generation supply against increasing demand, Stu Bresler, Executive Vice President, Market Services and Strategy, said the delay will give PJM and stakeholders time to refine rules that will help promote reliability and affordability through the energy transition.
“We think immediate actions were necessary to address those issues in order to provide as much certainty as possible and ensure that the outcomes of the markets fulfill their intended function – and that’s reflect the anticipated supply and demand that we will see in future delivery years,” Bresler said.
The proposed adjustments to auction rules are expected to be approved and implemented before mid-2025, when PJM seeks to conduct the auction for the 2026/2027 Delivery Year.
The scope of proposed changes focuses on three areas, said Adam Keech, PJM’s Vice President, Market Design & Economics:
- Seeking to keep the combustion turbine resource as the reference technology used for the calculation of the Cost of New Entry, rather than change to a combined-cycle gas-power resource, as the current Tariff would require
- Addressing concerns raised regarding very low or zero value Non-Performance Charge Rates in some areas of the PJM footprint and not others
- Addressing availability of Reliability Must-Run resources to contribute to resource adequacy needs
