PJM Capacity Auction Scheduled

February 19, 2024

PJM will hold its next capacity auction in June.  The 2025/2026 Delivery Year auction can proceed following a January 30, 2024 FERC order.

The FERC order approved PJM Interconnection’s proposal to reform its capacity market rules, seeking to facilitate the energy transition while maintaining adequate generation resources to meet future electricity demand.

FERC accepted PJM’s proposed methodology to better evaluate the contribution of each generation resource to the reliability of the system. The enhanced ELCC methodology includes thermal generators and accounts for correlated generator outages that may occur in extreme operating conditions.

PJM capacity prices have fallen each year since the 2021-2022 auction.

Starting June 2025, all asset types, especially solar, will have fewer accredited MWs of capacity to sell except onshore and offshore wind.  PJM’s analysis shows that expected retirements and the forecasted increase in demand is likely to increase capacity clearing prices.  The new rules will apply to the next forward capacity auction scheduled in June.