Rest of RTO Capacity Prices in PJM See Five-Fold Spike Under BRA

PJM's Base Residual Auction for the 2014-2015 Delivery Year produced a clearing price, for all resources except Limited Demand Response, of $125.99/MW-day for the Rest of RTO region, a spike of nearly $100 versus the 2013-2014 clearing price of $27.73/MW-day.

For all resources except Limited Demand Response, the MAAC Locational Deliverability Area (LDA) produced a clearing price of $136.50/MW-day, and the PS-NORTH LDA produced a clearing price of $225.00/MW-day.

The year-ago MAAC price was $226.15/MW-day, and the year-ago PS-NORTH price was $245/MW-day.

The clearing price for Limited Demand Response in the Rest of RTO, the MAAC LDA, and PS-NORTH LDA was $125.47/MW-day, $125.47/MW-day, and $213.97/MW-day, respectively.

The "competitive market" Base Residual Auction yet again failed the Three-Pivotal Supplier Test for both the RTO as a whole and PS-NORTH LDA, resulting in mitigation of any existing generation resources.

Once again, the PJM market design led to the over-procurement of capacity, resulting in load subject to the auction being obligated to pay for a reserve margin of 20.6% (with the RTO-wide reserve margin at 19.6% when including Fixed Resource Requirement entities).

RPM continues to fail to attract any significant new build capacity. Only 1,036 MW of new build offered into RPM for the RTO as a whole (695 MW in EMAAC and 873 MW in MAAC), with only 415 MW clearing (74 MW EMAAC and 252 MW MAAC). New build offers were down from about 1,300 MW a year ago.

Additionally, about one-third of the new build resources were renewable (including hydro), while only 650 MW of non-renewable intermediate/baseload new build was offered (in the form of combined cycle), which apparently did not clear (while PJM only provided a breakdown by fuel for the new build offered rather than cleared, since only 415 MW of new build cleared and the 650 MW is likely a single resource, it can be inferred that such capacity did not clear).