On Friday, PJM, the regional transmission organization (RTO) that coordinates the wholesale power market for 13 states (all or parts of Delaware, District of Columbia, Maryland, New Jersey, Ohio, Pennsylvania, Virginia, West Virginia, Indiana, Illinois, Kentucky, Michigan, North Carolina, and Tennessee, all of which EarlyBird Power is licensed in), reported the results of its annual capacity auction. Their Reliability Pricing Model auction, PJM said, has attracted a record amount of new generation (due to an increase in new natural gas-fired electricity facilities) and record imports. The auction also confirms enough electricity from June 1, 2016 through May 31, 2017, and power suppliers will meet the needs of the region served by PJM three years from now.
In the RPM auction, suppliers make their plants available to provide electricity for the PJM system for a year. Demand response and energy efficiency firms also participate in the yearly auction. New generation from the auction totaled 5,462.9 MW, a record amount that is up 2.18 percent from last year’s 5,346.3 MW figure. Capacity imports rose greatly, nearly doubling to 7,482.7 MW. The capacity auction also procured high amounts of energy efficiency and demand response (1,117.3 and 12,408.1 MW respectively). In the wake of this record generation news, capacity prices throughout the PJM region dropped significantly, from a 2015/2016 price last year of $136 to a 2016/2017 price this year of $59.37. The huge decrease in capacity prices also means a substantial drop in PJM region forward electricity prices, which are down as much as 15 percent since the auction results were published.