PJM presented a draft proposal to delay the next four Base Residual Auctions (BRAs) to the Members Committee during a special meeting on Tuesday.

The alternative schedule would move the 2025/26 auction, currently scheduled for this June, to June 2024; the following three auctions would be held every sixth months thereafter. Auctions would return to their regular timing of being held three years in advance of the 2029/30 BRA, which would be held in May 2026. (See PJM Board of Managers to Seek Capacity Auction Delays.)

The tightened schedule would also continue the current practice of canceling incremental auctions (IAs) when they take place within 10 months of the BRA or would be within the same year as the corresponding delivery year. The first two IAs for the 2025/26 auction and following year’s would be canceled, leaving only the third IA in place. Two IAs would be held in the 2027/28 and 2028/29 delivery years, before going back to the normal three per year.

PJM’s tariff requires that it consult with the MC and Transmission Owners Agreement-Administrative Committee (TOA-AC) at least seven days prior to making a Federal Power Act Section 205 filing with FERC. The TOA-AC, whose meetings are closed to the public, met on Tuesday after the MC.

Pre-auction activities will continue until PJM has received an order from FERC to ensure that the 2025/26 BRA can still be held in June should the commission reject the filing. Should the commission approve the filing, PJM’s Tim Horger said those activities will be rerun leading up to the auction’s new date.

Horger said the filing is based on the premise that FERC will approve the capacity market overhaul that the Board of Managers plans to approve and have filed by Oct. 1 within 60 days. If the commission were to take longer and reach a decision as late as March, Horger presented a potential alternative that would delay the 2025/26 BRA to October 2024 and delay the following four auctions. The schedule would go back to normal with the 2030/31 auction in May 2027.

The draft filing shown to the MC only seeks the capability to change the timing of auctions through the 2028/29 delivery year, necessitating an additional FERC filing for the alternative Horger presented.

Greg Poulos, Consumer Advocates of the PJM States (CAPS) | © RTO Insider LLC

Greg Poulos, executive director of the Consumer Advocates of the PJM States (CAPS), said requiring a filing by Oct. 1 and setting June 2024 in stone for the 2025/26 BRA would limit stakeholders’ ability to extend discussions on capacity market changes through the Critical Issue Fast Path (CIFP) process. He noted that PJM has delayed the release of its report on the December 2022 winter storm to July, which he argued also leaves little time for review and to incorporate findings into proposals. (See PJM Presents More Detail on CIFP Proposal.)

The report will be especially important for state consumer advocates, Poulos said, as they are not market participants and lack the insight into the storm’s impact that those directly affected by it possess. A short timeline for making these decisions could put advocates in the position of voting on proposals to recommend to the board without having all the necessary information, he said.

Poulos also questioned whether there is a plan for how PJM would act if FERC approves the auction delay but ultimately rejects the eventual capacity market proposal.

Horger responded that PJM is aware of that possibility and that the risk will have to be addressed should it manifest.

Vistra’s Erik Heinle asked if PJM will request expedited consideration of the filing to reduce the amount of pre-auction activities that market participants must engage in.

PJM Senior Counsel Chen Lu said the decision to make the filing under Section 205 was intended to reduce the amount of time to receive a determination, but PJM will consider asking for expedition.

Ian Oxenham, legal specialist for the New Jersey Board of Public Utilities, urged PJM to not seek expedited consideration, saying that it could deprive commenters of the time needed to evaluate the filing.

“PJM should be very hesitant to shorten that comment period,” he said.