The PJM Board of Managers on Monday announced that it will seek a delay in the 2025/26 Base Residual Auction (BRA), scheduled for this June, as well as future auctions to allow the RTO and stakeholders to draft market changes to address reliability concerns.

“In arriving at this decision, the board recognized that, despite the implications of auction delay, reforms are necessary to the capacity market design in order to conduct an effective Base Residual Auction,” the board stated in a communication to stakeholders. “The board therefore determined that PJM should postpone executing any further auctions under the current rules until we go through the stakeholder process and file resulting rule change proposals with FERC.”

A special meeting of the Members Committee has been scheduled for April 4, during which PJM is set to provide an update on the delay and consult with stakeholders. PJM’s tariff requires that it consult with stakeholders at least seven days prior to making any Federal Power Act Section 205 filing. The board said that PJM will continue pre-auction activities if the filing is rejected by FERC.

Adam Keech, PJM | © RTO Insider LLC

The board did not specify an alternative date for the 2025/26 BRA, nor which subsequent auctions PJM will seek to postpone in an upcoming filing with FERC. But the RTO had presented three options for delaying future BRAs during past stakeholder meetings, including postponing the 2025/26 auction to May 2024. The following three auctions would also be delayed by sixth months under that alternative, bringing the auction schedule back to its normal cadence of three years in advance of the corresponding delivery year in May 2026 for the 2029/30 DY.

During a March 15 meeting of the Resource Adequacy Senior Task Force (RASTF), several stakeholders questioned whether it was too ambitious to expect an order from FERC and implement the changes, particularly if the commission issues a deficiency notice, before May 2024. PJM’s Adam Keech told the task force he heard stakeholder’s concerns that May could prove too optimistic and would share that with the board. (See PJM, Stakeholders Present Initial Capacity Market Proposals to RASTF.)

PJM spokesperson Jeff Shields told RTO Insider the RTO has no comment beyond the scenarios presented to stakeholders.

In a letter initiating the Critical Issue Fast Path (CIFP) process on revising the capacity market, the board asked stakeholders to provide feedback on whether any changes should be made effective prior to the 2027/28 BRA and whether that should include delays to the auctions. The letter lays out a series of concerns the board has with reliability in future years and requested that PJM and stakeholders draft proposals for a capacity market overhaul. The board aims to evaluate the recommendations and vote on a proposal to file with FERC on Oct. 1, 2023. (See PJM Board Initiates Fast-track Process to Address Reliability.)

Stakeholders provided mixed feedback over a handful of meetings, with supporters believing a delay would provide time to change the auction parameters to yield more accurate price signals, while opponents worried about the impact to state auction timelines and the possibility that the market change proposal could be delayed or rejected by the commission.