Noting that it attracted a record amount of competitive resources meeting strict performance standards in its annual capacity auction, PJM Interconnection on May 23 said that it procured 165,109 MW of resources for the period June 1, 2020, to May 31, 2021.
The auction produced a price of $76.53/MW-day for resources in most of the PJM footprint, PJM said, noting that prices are higher in some areas due to transmission limits and retiring generators.
In four constrained areas, capacity prices are higher than the RTO price, PJM said, noting that:
- For the MAAC region – which includes Atlantic City Electric, Baltimore Gas and Electric, Delmarva Power, Pepco, Jersey City Power & Light (JCP&L), Met-Ed, PECO, Penelec, PPL, Public Service Electric and Gas (PSE&G), and Rockland Electric – the price is $86.04/MW-day
- In Eastern MAAC – which consists of PSE&G, JCP&L, PECO, Atlantic City Electric, Delmarva Power, and Rockland Electric – the price is $187.87/MW-day
- In ComEd, the price is $188.12/MW-day
- In Duke Energy’s Ohio and Kentucky region, the price is $130/MW-day
This is the first auction in which all resources had to meet capacity performance requirements – which were phased in – and it was the first to have participation by price responsive demand resources, demand response-like resources that react to market signals, PJM said.
PJM noted that it procures resources three years in advance to ensure adequate power supplies will be available during extreme weather or other system emergencies to meet consumers’ electricity demand. All of the resources must meet capacity performance standards, committing to perform when needed or face steep non-performance payments, PJM said.
The auction attracted 2,350 MW of new gas-fired generation, and procured about 7,532 MW of demand response resources that committed to year-round availability, as well as the higher performance requirements, PJM said. There were 119 MW of solar resources, 504.3 MW of wind resources, and 1,710 MW of energy efficiency resources that cleared the auction, PJM said.
In addition, under new rules approved by FERC in March, 398 MW of seasonal capacity – resources that are available in one season only – cleared in an aggregated manner to form a year-round resource, PJM said. Wind generators, whose capacity is greater in the winter, combined through the auction clearing mechanism with demand response and solar resources, whose capacity is greater in the summer, PJM said.
Exelon (NYSE:EXC), in a May 24 statement, noted that its Three Mile Island (TMI) and Quad Cities nuclear plants did not clear in the latest PJM capacity auction.
TMI did not clear in the past three PJM base residual auctions, Exelon said, adding that it has been working with stakeholders on options for the continued operation of that plant, which has not been profitable in five years.
Joe Dominguez, Exelon’s executive vice president of Government and Regulatory Affairs and Public Policy, said in the statement: “Exelon remains fully committed to keeping the Quad Cities plant open, provided that [the Future Energy Jobs Act’s, or] FEJA’s Zero Emissions Credit [(ZEC)] program is implemented as expected and provided that Quad Cities is selected to participate. However, Quad has not been selected to receive ZECs under the FEJA program to date.”
Exelon said that its other nuclear plants in PJM cleared in the auction for the 2020-2021 planning year, and that the Oyster Creek plant did not participate in the auction as it is scheduled to retire in 2019.
Public Service Enterprise Group (NYSE:PEG), in a separate May 24 statement, said that its subsidiary PSEG Power cleared about 7,800 MW at a weighted average clearing price of $174/MW-day.
According to another May 24 statement, PSEG President, Chairman, and CEO Ralph Izzo has called for a set of statewide regulatory reforms that would create financial incentives for utilities to help their customers reduce at-home energy use, as well as expand access to renewable energy and new energy-saving technologies.
Izzo, in his remarks delivered at a state energy forum sponsored by the Chamber of Commerce Southern New Jersey, also encouraged New Jersey utility regulators to consider longer-term approval of energy infrastructure projects, according to the statement.
“Customers’ demands are changing,” Izzo said in the statement. “They want more reliability, they want more resilient power, they want cleaner energy and they want access to smart technology to better understand their energy usage – all while keeping bills affordable.”
According to the statement, Izzo said that in order to meet those competing demands, utilities and the regulatory framework that governs them must adapt from a system that encourages utilities to sell as much energy as possible to a new system that provides incentives for the utility to promote greater energy efficiency.
“Energy efficiency is the critical component that will drive the utility of the future,” Izzo said. “The cheapest kilowatt remains the one that is not needed.”
He said, “While New Jersey has set aggressive goals for renewables, we have only taken baby steps in the area of energy efficiency.”
The universal reach of utilities, touching every home and business in their service territory, means that investment in energy efficiency at the utility level would ensure that all customers, at every income level, would reap the benefits of those programs, according to the statement.