For Immediate Release: June 2, 2021
Contact: Christina Nyquist | cnyquist@epsa.org
Washington, D.C. – Todd Snitchler, president and CEO of the Electric Power Supply Association (EPSA) released the following statement following the release of results for the 2022/2023 PJM Interconnection Base Residual Auction (BRA).
“The long-delayed BRA yielded lower costs for capacity that consumers will pay for reliability starting next June. EPSA members – America’s competitive power suppliers – and others compete vigorously to serve demand and are constantly pursuing opportunities to reduce costs, increase efficiency and maintain reliability. With that in mind, today’s results reveal several additional takeaways.
First, there is no urgency to rush additional reform following the implementation of the Minimum Offer Price Rule (MOPR). EPSA has consistently pushed for an auction to run under the current MOPR rules before rushing to significantly change the market. Now, as PJM continues to proceed quickly down a path to eliminate MOPR, today’s results confirm there is no need to rush. PJM and its stakeholders have time to holistically address market reforms, including the MOPR, without subjecting consumers to claims of MOPR-driven cost increases.
The application of the MOPR did not raise prices for PJM consumers. Nor did the application of the MOPR provide a financial windfall to fossil generators. Today’s results can, at long last, put an end to speculation—from all sides—about market outcomes.
Second, the increasing amount of competitive renewable resources clearing the auction—over 3,000 MW—shows that PJM’s markets are enabling renewable development and penetration, not hindering it. While the MOPR may pose a challenge for subsidized renewable resources, it has clearly not stopped the development of competitive ones. Quite the opposite. Additionally, more than 4,464 MW of nuclear power cleared in this auction compared to the last showing that other zero emission resources are also able to clear the PJM auction under current MOPR rules.
Third, while low prices benefit consumers, capacity revenues are critical to ensuring timely resource maintenance and investments in a competitive market—for both conventional and renewable resources. As we integrate more zero marginal cost and intermittent resources on the system, timely and competitive forward capacity auctions will be essential for sending the price signals necessary to maintain reliability. While PJM may have abundant supply today, it is critical that PJM retains the most efficient supply to provide the services necessary for reliability tomorrow.
It is our hope that policymakers and regulators will continue to focus on market-based reforms that continue to ensure reliability at a competitive price, which is job number one. FERC, PJM and its stakeholders should avoid a hasty market re-design. EPSA reiterates its desire to work closely with PJM and other stakeholders to help achieve that goal.”
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The Electric Power Supply Association (EPSA) is the national trade association representing America’s competitive power suppliers. EPSA members provide about 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.
