None of the 10,017 MW of additional capacity committed in the 2017/18 transition auction will be calculated in this week’s incremental auction for the delivery year, PJM said.
“Originally, we said yes, the new commitments — the incrementally additional committed megawatts — would be rolled into capacity,” Stu Bresler, PJM senior vice president for markets, told the Market Implementation Committee. However, he said, “The Tariff will not allow us to do that. It’s very specific in the calculation of how many megawatts we procure or release.”
But, he said, PJM believes that incorporating new capacity into the incremental auctions is “the right thing to do” and will be introducing a Tariff change at the Oct. 1 meeting of the Markets and Reliability Committee.
If a load forecast changes between a Base Residual Auction and the corresponding delivery year’s incremental auction, PJM adjusts its reliability requirements, Bresler said.
“Conceptually, if the reliability requirement goes up, PJM could buy more capacity. If it goes down, which has been the trend, the requirement drops, and PJM could sell off previously committed capacity in the incremental auction,” he said. “Participants could buy that as replacement.”
Bresler said that if the Tariff change is approved, PJM expects to include additionally committed capacity in the third incremental auction for the 2016/17 year, to be held in February. The transition auction for that year procured 4,246 MW of additional capacity.
— Suzanne Herel