PA Environment Digest Blog: Latest PJM Interconnection Electricity Capacity Auction Shows Price Decrease, But Mixed Results In PA

On February 27, the PJM Interconnection announced the results of its latest electricity capacity auction. Prices in most areas were down, but up in areas with local constraints that indicate tightening conditions in certain areas.

PJM said the auction secured adequate resources to meet demand for the 2024/2025 Delivery Year.

The auction produced a price of $28.92 MW-day for much of the PJM footprint, compared to $34.13/MW-day for the 2023/2024 auction in May 2022, at a total cost of $2.2 billion, consistent with the $2.2 billion from the previous auction.

However, in specific areas of the region, like Pennsylvania where there are local transmission constraints, the results were mixed--

-- $49.49- Med-Ed, Penelec, PPL-- the same as in 2022- $49.49

-- $54.95- PECO-- up from 2022- $49.49

-- $28.92- Remainder Of PA-- down from 2022- $34.13

Click Here for the results of the June 2022 auction.

The greatest changes among resources clearing [including Fixed Resource Requirement (FRR) capacity plans] were increases in natural gas (+1,615 MW) along with solar (+1,297 MW), as the capacity market continues to facilitate the overall transition to lower-carbon generation resources.

Energy Efficiency cleared in the auction or committed in an FRR plan was up by 2,198 MW.

The greatest decreases in resources cleared (including FRR capacity plans) were demand response (-451 MW), nuclear (-331 MW), coal (-278 MW), hydro (-237 MW) and oil (- 230 MW).

PJM retains a healthy reserve margin today, though a number of areas are becoming constrained with higher prices. This auction had approximately 2,000 fewer megawatts offered than the previous auction, continuing a three-year trend of decreasing amounts of megawatts offered.

If this trend continues, it represents a potential concern for long- term resource adequacy, depending on the rate of replacement of these resources.

“The capacity auction continues to be our best tool to ensure reliability at competitive prices in PJM,” said President and CEO Manu Asthana. “The prices we see in certain areas also suggest that supply and demand conditions are tightening in these areas.”

Click Here for the complete announcement.

NewsClip:

-- Utility Dive: PJM Launches Fast-Track Capacity Market Reform Process In Face Of Shrinking Generation Reserve Margins

PA DEP Public Notice Dashboards:

-- Pennsylvania Oil & Gas Weekly Compliance Dashboard - Feb. 25 to March 3; More Well Plugging Sites Inspected [PaEN]

-- PA Oil & Gas Industrial Facilities: Permit Notices/Opportunities To Comment - March 4 [PaEN]

-- DEP Posts 63 Pages Of Permit-Related Notices In March 4 PA Bulletin [PaEN]

PA Oil & Gas Compliance Reports

-- Feature: 60 Years Of Fracking, 20 Years Of Shale Gas: Pennsylvania’s Oil & Gas Industrial Infrastructure Is Hiding In Plain Sight [PaEN]

-- Conventional Oil & Gas Well Owners Failed To File Annual Production/Waste Generation Reports For 61,655 Wells; Attorney General Continues Investigation Of Road Dumping Wastewater [PaEN]

-- DEP Issued 754 Notices Of Violation For Defective Oil & Gas Well Casing, Cementing, The Fundamental Protection Needed To Prevent Gas Migration, Groundwater & Air Contamination, Explosions [PaEN]

-- DEP Report Finds: Conventional Oil & Gas Drillers Routinely Abandon Wells; Fail To Report How Millions Of Gallons Of Waste Is Disposed; And Non-Compliance Is An ‘Acceptable Norm’ [PaEN]