The nation’s largest power market proposed to delay its planned December capacity market auction as it faces rising turmoil over the dramatic price spikes recorded at its last auction that critics contended were caused by skewed market rules.
In a notice sent to members of the 13-state PJM Interconnection on Thursday, the grid operator said it “will be supporting a delay” of its next capacity auction as it waits for FERC’s response to a complaint filed by environmental groups arguing PJM could have avoided a surge in prices at its previous auction that pushed up prices billions of dollars. The groups further allege that by not fixing its rules, market prices could rise as much as $15 billion in costs over the next three auctions.
“All signs indicate that if the December auction were to go forward as scheduled, ratepayers would pay astronomic prices for no benefit,” Clara Summers, who manages the Consumers for a Better Grid Campaign for the Citizens Utility Board of Illinois, said in an email. “We want to get back on schedule as soon as possible, but the market rules need to make sense first. PJM needs to fast-track reforms so price signals can reconnect with reality.”
In an email, Todd Snitchler, CEO of the Electric Power Supply Association, which represents some of the largest power plant owners in the country, said that although generators have been opposed to auction delays “the very difficult issues raised” in the complaints and the importance of accurate price signals “cannot be understated.”
