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Generators, Consumer Advocates Both Seek Delay Of 2022/23 PJM Base Residual Capacity Auction

Consumer Advocates Warn Delay Could Increase Risk Premium In Default Service Rates

April 2, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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A group of generation owners and a group of consumer advocates have both requested that PJM delay the 2022/23 PJM base residual capacity auction (BRA), which would normally be conducted in May 2019 but which PJM had already delayed until August 2019, citing uncertainty with significant pending proposed changes to the market pending at FERC (such as potential carve-outs for state actions)

Groups noted that FERC has also established a "replacement rate" under which PJM must conduct the 2022/23 auction, which could result in the results of such auction being subject to refund

A group consisting of American Municipal Power, Inc., AvanGrid Renewables, Dominion Energy, EDP Renewables North America LLC, Exelon Business Services Company, LLC, NextEra Energy Resources, The PSEG Companies, and Talen Energy Marketing, LLC requested that PJM seek to reschedule the 2022/23 BRA to mid April 2020 and, consistent with the current tariff requirements, hold the 2023/24 BRA at the end of May 2020, providing a six-week span between the auctions. All pre-auction deadlines for the 2022/23 BRA would align six-weeks prior to the same deadlines for the 2023/24 BRA in May 2020.

The Joint Consumer Advocates, including the Delaware Division of the Public Advocate, Office of the People’s Counsel for the District of Columbia, Illinois Citizens Utility Board, Maryland Office of People’s Counsel, New Jersey Division of Rate Counsel, and the Pennsylvania Office of Consumer Advocate, separately also wrote in favor of a delay of the 2022/23 auction, though they request that such delay be as brief as possible

While in favor of a delay, consumer advocates noted the adverse impacts from such a delay, including potential risk premiums in default service procurement auctions held during the interim

"It is also important to understand the impact of delay. Other auctions, legislative and regulatory decisions are made based upon the results of the BRA. For those states that hold standard offer auctions for the 22/23 Energy Year, delay will create uncertainty. That uncertainty leads to risk premiums and upward pressure on those state auctions, resulting in higher than necessary prices. For other states working to develop a regulatory framework to support clean energy initiatives, delay stalls that work. While the Joint Consumer Advocates support a delay, we also urge that the delay be as brief as possible while still providing states the necessary time to address the Commission's directives and consistent with conducting an orderly auction," consumer advocates said

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