PJM supports delaying December auction to address complaints over higher pricing
Oct 11 (Reuters) -PJM Interconnection, the largest U.S. grid operator, said it supported the delay of the 2026/2027 Base Residual Auction for approximately six months.
In a letter to stakeholders after markets closed on Thursday, the grid operator said that it supported delaying the auction to answer an complaint brought to the Federal Energy Regulatory Commission about capacity price increases due to power plant exclusions in the most recent auction.
"PJM will be supporting a delay of the PJM 2026/2027 Base Residual Auction for approximately six months...Preparations for the December auction will continue in the event that FERC does not accept the request, in which case PJM will proceed with the December auction as scheduled," the letter said.
PJM's auction in July for 2025 to 2026 saw prices that were 833% higher than the previous year, citing dwindling supply and increased demand.
Several environmental groups, including the Sierra Club, Earthjustice, and the Natural Resources Defense Council, filed a complaint regarding Reliability Must-Run (RMR) units.
The plants not included in the auction have contracts, known as RMR agreements, to operate beyond their planned retirement dates. Including these plants would have reduced capacity costs by approximately $5 billion annually over the next three year, the complain reads.
The complaint and another letter sent by The Organization of PJM States, called for RMR agreements to be accounted for.
Potential changes to the market structure could negatively impact PJM-operating Independent Power Producers (IPP) while benefiting transmission and distribution utilities and may reduce tightness in the upcoming auction, Barclays analysts said.
IPPs Talen, Constellation, Vistra VST.N were down between 0.3% and 3.3%in the session.
Reporting by Seher Dareen in Bengaluru; Editing by Tasim Zahid
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