The PJM Interconnection’s 2019/2020 Reliability Pricing Model (RPM) Base Residual Auction (BRA) cleared 167,305 MW of unforced capacity in the regional transmission organization (RTO), PJM reported late May 24.
Accounting for load and resource commitments under the Fixed Resource Requirement (FRR), the reserve margin for the entire RTO for the 2019/2020 Delivery Year as procured in the BRA is 22.4%, or 5.9% higher than the target reserve margin of 16.5%.
This reserve margin was achieved at Capacity Performance prices that are between approximately 33% to 60% of Net Cost of New Entry (CONE), depending upon the zone comparison, while attracting just over 5,000 MW of new combined cycle gas resources, PJM said.
The clearing price was $100/megawatt-day for the majority of the region.
“Prices were lower than some analysts had expected and lower than the last year’s auction results simply because of market fundamentals of changes in supply and demand,” said Stu Bresler, senior vice president – Markets. “The load forecast is lower, and there was a large amount of new gas-fired combined-cycle generation clearing for the first time in the auction.”
The 2019/2020 RPM BRA was the second BRA to include the Capacity Performance (CP) provisions approved by FERC prior to last year’s 2018/2019 BRA.
As part of the transition to 100% CP starting with next year’s 2020/2021 BRA, PJM procured two capacity product types through the auction, Capacity Performance and Base Capacity.
Capacity Performance Resources must be capable of sustained, predictable operation, and are expected to be available and capable of providing energy and reserves when needed throughout the entire Delivery Year; whereas, Base Capacity Resources may not be capable of sustained, predictable operation and/or may not be expected to provide energy and reserves outside of the summer period.