PJM Board Issues Directives On Capacity Market Changes, Impact To Load

September 27, 2023

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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PJM's Board has issued a series of directives concerning changes to the capacity market developed through the Critical Issue Fast Path-Resource Adequacy (CIFP-RA) process

Of most import to retail suppliers is the Board's decision that, "The Board has directed PJM to maintain an annual market design in this filing as proposed in the PJM annual proposal."

"While the case for more granular designs is compelling, the Board heard overwhelming feedback from stakeholders about the desire for additional time to refine such proposals," the Board said

Also of note to Load is the Board's decision with respect to the allocation of Non-Performance Charges

The Board noted that, "During the Stage 4 and the preceding CIFP-RA meetings, some stakeholders expressed the opinion that some quantity of Non-Performance Charges should be allocated to load."

"The Board has decided not to move forward with this proposal at this time," the Board said.

"The allocation of Non-Performance Charges to loads would require more discussion to determine a justifiable level, and any allocation of these charges to load ultimately erodes bonus payments to over-performing suppliers. It is not clear to the Board at this time that such a change is beneficial to the market design or performance incentives," the Board said.

Also of note, the Board said, "The Board is interested in further discussion on a prompt market design, although it is electing not to move forward with filing this change at this time. There is likely a more complex set of tradeoffs associated with reducing the look-ahead period than what stakeholders have had time to discuss in the CIFP-RA, and so more time needs to be dedicated to identify the benefits and drawbacks before moving forward with this change."

The Board directed PJM to make a filing at FERC with those changes endorsed by the Board by October 13, for inclusion in the 2025/2026 Base Residual Auction (BRA).

The changes endorsed by the Board can be seen in the Board's letter here

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