PJM capacity restructuring plan approved by feds

The Federal Energy Regulatory Commission (FERC) recently approved a proposal from PJM Interconnection to restructure its capacity market in order to avoid power outages.

During winter storms in early 2014, many of the company's electricity facilities were unable to function due to lacking fuel sources or the generators not being able to cope with the abnormally cold temperatures. As a result, 22 percent of its generating output was offline.

“That capacity must carry with it meaningful performance obligations, and corresponding incentives and penalties, to ensure that those resources actually deliver when needed," Nuclear Energy Institute (NEI) Vice President for Policy Development and Planning Richard Myers said. "In order to avoid those penalties, generators will take steps to ensure reliability by investing in such things as additional operations and maintenance, firm transmission for gas-fired plants, etc. This will tend to increase capacity prices.”

New incentives will be rolled out in August as the company begins its three-year forward capacity market auction for 2018 and 2019 electricity delivery. The NEI said the company will phase in changes in order to be made applicable in the delivery of electricity between 2016 and 2018.

The NEI said that comprehensive energy market reforms are necessary in order to preserve economic and environmental benefits to nuclear power.
The Federal Energy Regulatory Commission (FERC) recently approved a proposal from PJM Interconnection to restructure its capacity market in order to avoid power outages.

During winter storms in early 2014, many of the company's electricity facilities were unable to function due to lacking fuel sources or the generators not being able to cope with the abnormally cold temperatures. As a result, 22 percent of its generating output was offline.

“That capacity must carry with it meaningful performance obligations, and corresponding incentives and penalties, to ensure that those resources actually deliver when needed," Nuclear Energy Institute (NEI) Vice President for Policy Development and Planning Richard Myers said. "In order to avoid those penalties, generators will take steps to ensure reliability by investing in such things as additional operations and maintenance, firm transmission for gas-fired plants, etc. This will tend to increase capacity prices.”

New incentives will be rolled out in August as the company begins its three-year forward capacity market auction for 2018 and 2019 electricity delivery. The NEI said the company will phase in changes in order to be made applicable in the delivery of electricity between 2016 and 2018.

The NEI said that comprehensive energy market reforms are necessary in order to preserve economic and environmental benefits to nuclear power.

Organizations in this story

Nuclear Energy Institute 1201 F St NW D.C., DC - 20004

U.S. Federal Energy Regulatory Commission 888 First St NE Washington, DC - 20426

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