The Federal Energy Regulatory Commission on Friday unanimously upheld its decision to approve the PJM Interconnection’s plan to revert to the original results of its last base capacity auction, in the wake of a federal appeals court ruling.
FERC also declined to stay its May 6 decision, which will more than double the capacity costs for the Delmarva Power South zone for the 2024/2025 capacity year that starts on Saturday. Under that ruling, customers in the zone covering parts of Delaware, Maryland and Virginia will pay $288.4 million for capacity in the coming 12 months, according to a coalition opposing the increase.
The coalition, PJM Load Parties, comprises American Municipal Power, Delaware Division of the Public Advocate, Delaware Energy Users Group, Delaware Municipal Electric, Delaware Public Service Commission, Maryland Office of People’s Counsel, Maryland Public Service Commission and Old Dominion Electric Cooperative.
FERC’s rehearing decision also upholds the agency’s approval of PJM’s request to re-run a recently completed “incremental” auction.
After PJM ran a base capacity auction in December 2022, the grid operator found that the original results for the DPL South zone were “anomalous” and failed to match actual supply and demand conditions because of a flawed planning parameter.
FERC approved PJM’s plan to revise its rules before the results were released, leading to lower capacity prices in the zone compared with the original results. But the U.S. Court of Appeals for the Third Circuit overturned FERC’s decision in mid-March.
In its rehearing order, FERC said approving PJM’s petition reflects the appeals court’s “unequivocal direction” that PJM use the original reliability planning parameter for the Delmarva region.
“We continue to acknowledge PJM Load Parties’ concerns about rerunning auctions and the equities implicated by this proceeding, but continue to find that they do not authorize the Commission to change the outcome under the circumstances of this proceeding,” FERC said.
FERC said it will address a pending complaint over the agency’s decision to revert to the original auction results by the PJM Load Parties in a separate order.
The PJM Power Providers Group and the Electric Power Supply Association — trade groups for power plant owners — as well as companies such as Constellation Energy, NRG Energy and Vistra support using the original Delmarva auction results.
