PJM Capacity Auction Must Be Held As Soon as Possible, EPSA Tells FERC in Comments on March “MOPR Order” Compliance Filing
Washington, D.C. – After a year of delay, holding the auction that determines electric power costs and reliability for 65 million homes and businesses should be a top priority for federal energy regulators and Mid-Atlantic grid operator PJM Interconnection, the Electric Power Supply Association (EPSA) said Friday. EPSA represents competitive power suppliers with more than 50,000 MW of generation capacity in the PJM region.
EPSA filed comments before the Federal Energy Regulatory Commission (FERC) on a recent decision on rules governing the grid operator’s capacity market. By running an annual Base Residual Auction (BRA), the capacity market secures future power commitments from generators to ensure reliable, least cost electricity for 13 states and the District of Columbia. FERC’s next steps will impact the timing of PJM’s next BRA, which should have been held in May 2019.
“With budgets at a breaking point, Americans need reliable and affordable electricity,” said EPSA president and CEO Todd Snitchler. “There is no question that competitive power markets and timely auctions are the surest way to keep power prices affordable while encouraging generators to innovate, reduce emissions, and improve performance. Any delay or disruption to competition harms customers, reliability and progress.”
Snitchler added, “As stakeholders debate the impact and costs of FERC’s MOPR ruling, PJM’s capacity auction is the only way to get the data states need to make critical energy policy decisions.”
In its comments, EPSA also notes that any state’s decision to exit the capacity market to pursue a Fixed Resource Requirement (FRR) should not further delay the BRA. “EPSA strongly objects to the notion that PJM should be free to delay the 2022/2023 BRA until as late as March 31, 2021 based upon a single state’s decision to use the FRR,” the group writes. Experts say the FRR, which allows states to purchase electricity from individual power providers outside of the competitive market, is likely to raise power generation costs and chill competition and innovation by opening the door to monopolistic practices.
Meanwhile, the capacity auction provides certainty around power costs and tells power generation owners where to retire and/or invest in new plants and technologies—often bringing more efficient, affordable and cleaner energy resources, including low cost wind and solar, to the grid.
The regularly scheduled BRA secures generation commitments up to three years in advance, a window that has now been reduced to at most 16 months. EPSA notes that the auction could be held even sooner than proposed by PJM, writing, “It is not clear to EPSA why PJM requires six and a half months to conduct the 2022/2023 BRA and why four and a half months, as PJM proposes for the three succeeding BRAs, is not sufficient.”
The Electric Power Supply Association (EPSA) is the national trade association representing America’s competitive power suppliers. EPSA members provide nearly 150,000 MW of reliable and competitively priced electricity from environmentally responsible facilities using a diverse mix of fuels and technologies including natural gas, wind, solar, hydropower, geothermal, storage, biomass, and coal. EPSA seeks to bring the benefits of competition to all power customers. Learn more at www.epsa.org and connect with us on LinkedIn and Twitter @EPSAnews.