This week PJM proposed a plan and schedule to resume its suspended capacity auctions. If everything goes as planned, the next PJM capacity auction process using the new Minimum Offer Price Rule (MOPR) would begin in March or April 2021. In order to meet this goal, the Federal Energy Regulatory Commission (FERC) must review and approve PJM’s MOPR. PJM’s last capacity auction was in May 2018. The plan and proposal to catch up on the backlog of capacity auctions are summarized below and shown in Figure 1.
PJM plans to shorten the pre-auction timeline to six months. They will conduct the first Base Residual Auction (BRA) for the Capacity Year (June 2022 to May 2023) six months after FERC approves the MOPR. To meet PJM’s timeline, the FERC would need to approve PJM’s plan by September 2020. This would allow the next BRA capacity auction to occur as late as March 2023.
In the current plan, the capacity auction process would begin in April 2021. The results of the BRA auction for Capacity Year June 2022 to May 2023 would be posted in October 2021. After this auction, there would be a six-week pause to transition to the next auction, followed by another six-month period before the next auction clears. According to the current timeline, the BRA auctions for Capacity Year 2023/2024 and 2024/2025 would happen in May 2022 and December 2022, respectively. If the FERC approves PJM’s plan sooner than expected, then the auction process may begin earlier than shown in the timeline below.
Figure 1: BRA (Base Residual Auction) Timeline, by 5
5 will be hosting three webinars this month where members from our team will discuss natural gas and electricity markets and how the coronavirus may affect the force majeure terms in energy contracts. To register please click on the link(s) below.
PJM (PA, NJ, MD, DC, OH, IL) Webinar: 3.24.20 @ 11AM ET
NYISO (New York) Webinar: 3.24.20 @ 2PM ET
ERCOT (Texas) Webinar: 3.25.20 @ 11AM CT