PJM Proposes Schedule To Conduct 2022/2023 & Later Base Residual Capacity Auctions

During a stakeholder meeting yesterday, PJM proposed a schedule for the base residual capacity auctions (BRA) for 2022/2023, and later years, which have been delayed due to a FERC order

PJM's proposed schedule is based on receipt of a FERC ruling on a compliance filing related to PJM's implementation of the recent minimum offer price rule (MOPR) order

PJM proposes to compress pre-auction activities into 6 months to conduct the next, 2022/2023 BRA as soon as possible after FERC approval of a compliance filing

PJM's proposal sets a baseline for executing the next auction as soon as practically possible after receiving FERC approval of PJM’s compliance filing; PJM needs 6 months for the first auction under the new rules. In other words, the 2022/2023 BRA would occur, except under the provision noted below, 6 months after a FERC ruling on the compliance filing (depending on when such FERC ruling is issued, the 2022/2023 BRA could occur in late 2020).

However, PJM proposes to request flexibility from FERC to delay the start of the 2022/2023 auction to no later than mid-March 2021 and with completion no later than March 31, 2021, if a state passes legislation (such as fixed resource requirement legislation) prior to June 1, 2020 and such state requests the additional time

PJM said this provides extra time for state actions, but provides certainty as to whether there will be any delay in the next auction by June 1, 2020

If FERC approves PJM’s compliance filing by September 2020, March 31, 2021 is the last date by which PJM would complete the 2022/2023 BRA

If FERC does not approve PJM’s compliance filing by September 2020, the first auction would be 6 months after such FERC issuance, because that would be after March 2021

PJM proposes to conduct the 2023/2024 thru 2025/2026 BRAs at 6 month intervals thereafter: with a six week pause between posting of auction results and commencement of activities for the next BRA, compressing pre-auction activities into 4.5 months

PJM proposes the following concerning the Incremental Auctions (IA):

• PJM will always conduct a Third Incremental Auction

• A scheduled incremental auction will be cancelled if it’s normally scheduled date has already passed

• A scheduled incremental auction will be cancelled if it would fall within the same calendar year as the BRA for that delivery year, as there is no material change to the inputs to the incremental auction (i.e. same load forecast, IRM etc.)

• A scheduled incremental auction will be cancelled if it falls within 10 months or less from the BRA for that delivery year.

For example, if the 2022/2023 BRA is held in December 2020, the first IA would be cancelled as its original scheduled date has passed, and the second IA would be cancelled because its originally scheduled date is less than 10 months from the BRA. The third IA would occur in February 2022 as normal.