Capacity Prices Fall In Most Of PJM For 2024-25, DPL-South Still Sees Nearly 30% Spike

PJM has posted results from its base residual auction for capacity (BRA) under the reliability pricing model (RPM) for the 2024-25 delivery year

The Rest of RTO prices was lower than the 2023-24 delivery year. Some LDA saw a marginal increase in 2024-25, but DPL-South saw a larger increase, from $69.95/MW-day for 2023-24 to $90.64/MW-day for 2024-25

In the BRA for the 2024-25 delivery year, clearing prices were as follows ($/MW-day):

2024-25 BRA
Rest of RTO       $28.92
MAAC              $49.49
EMAAC             $54.95
SWMAAC            $49.49
PS                $54.95
PSNORTH           $54.95
DPLSOUTH          $90.64
PEPCO             $49.49
ATSI              $28.92
ATSI-CLEVELAND    $28.92
COMED             $28.92
BGE               $73.00
PL                $49.49
DAYTON            $28.92
DEOK              $96.24

For comparison, capacity clearing prices in the BRA for 2023-24 were as follows ($/MW-day)

2023-24 BRA
Rest of RTO    $34.13
MAAC           $49.49
BGE            $69.95 
DPL-South      $69.95 

The results of 2024-25 BRA reflect tariff changes sought by PJM, post-auction, to address concerns about offer behavior in the DPL South LDA. The changes were approved by FERC

See background here

As stated by PJM, "In December, PJM sought narrow Tariff revisions to ensure a just and reasonable outcome for customers in the Delmarva South (DPL South) Locational Deliverability Area, after some planned generation with signed interconnection service agreements did not offer into the auction. This resulted in a supply and demand condition that did not reflect the underlying supply and demand fundamentals of the system. PJM estimated that customers in this area would have been required to pay more than four times more for capacity for the 2024/2025 Delivery Year absent the narrow Tariff revisions it sought."

Per PJM's auction report, the Adjusted Preliminary Zonal Capacity Price ($/MW-day) resulting from the 2024-54 BRA is:

2024-25 BRA
Adjusted Preliminary Zonal Capacity Price 
($/MW-day) 
AE         $55.14 
AEP *      $28.99 
APS        $28.99 
ATSI       $28.99 
BGE        $73.87 
COMED      $28.99 
DAYTON     $28.99 
DEOK *     $96.31 
DLCO       $28.99 
DOM        $28.99 
DPL        $66.15 
EKPC *     $28.99 
JCPL       $55.14 
METED      $49.68 
OVEC       $28.99 
PECO       $55.14 
PENLC      $49.68 
PEPCO      $49.68 
PL         $49.68 
PS         $55.14 
RECO       $55.14 

Notes:

* Obligation affected by FRR quantities

** Adjusted Preliminary Zonal Capacity Price includes adjustment to cover funding of PRD Credits.

On Friday, PJM's Board sent a letter to stakeholders stating, "the Board believes near-term changes to the Reliability Pricing Model (RPM) are necessary to ensure that PJM can maintain resource adequacy into the future," and implemented the "Critical Issue Fast Path (CIFP)" accelerated stakeholder process mechanism to further pursue market changes for a potential FERC filing targeted for October 1, 2023.

Among other things, the CIFP is to consider, "Evaluation of potential modifications to the Capacity Performance construct and alignment of permitted offers to the risk taken by suppliers. The Board believes that it is appropriate to evaluate whether changes are needed to the Capacity Performance construct and to ensure that market sellers are able to reflect the risk of taking on a capacity obligation in their capacity market offers."