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Electricity Markets

PJM Filing Submitted to FERC Proposes Changes to Capacity Market 

The PJM Interconnection on Oct. 13 submitted proposed changes to its capacity market that it said are “designed to support reliability of the electric grid now and in the future amid increasingly extreme weather and a changing generation fleet.”

PJM filed its proposal with the Federal Energy Regulatory Commission after more than a year of stakeholder meetings followed by an accelerated and intensive stakeholder process that began in February, it said.

Capacity market enhancements to the PJM tariff aim for implementation beginning with the 2025/2026 Base Residual Auction, scheduled for June 2024.

PJM said the proposed reforms are designed to:

  • Enhance how PJM accounts for generator reliability-related risk in its models and sets procurement targets.
  • Advance an accreditation framework for all resources to reflect the actual capacity value that those resources provide to consumers;
  • Reform certain rules related to the Capacity Performance program, which establishes accountability for generator performance during system emergencies;
  • Improve generator testing, including operational and seasonal requirements;
  • Revise the Market Seller Offer Cap and Minimum Offer Price Rule to better include costs of taking on a capacity obligation and adopt a forward-looking Energy & Ancillary Services Offset;
  • Enhance rules related to a unit-specific Market Seller Offer Cap; and
  • Better align Fixed Resource Requirement rules with the capacity market construct.

PJM said the proposal reflects stakeholder collaboration that began in October 2021 with the establishment of PJM’s Resource Adequacy Senior Task Force.

In February of this year, the PJM Board initiated an accelerated Critical Issue Fast Path – Resource Adequacy process that concluded in September with an advisory vote to inform PJM Board action.

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