PJM proposes cut to Capacity Market

PJM, the Midwestern US transmission company serving 65 million US electricity customers, has proposed a reform to its capacity market which would see it reduce capacity procurements. Specifically, the “variable resource requirement” (VRR) curve is to be revised – the VRR curve has necessary reserve capacity and cost of new capacity as feed-in elements, with both factors being reduced in the proposals. This curve is part of the formula used to determine the scale of the annual capacity auction, and is not the only element to be revised. PJM has requested that the Federal Energy Regulatory Commission (FERC) allow the adjustments to be enacted by December 1st, in time for the base Residual Auction to be held November 2023, which…