PJM Capacity Performance Reform

There is a regulatory change currently underway for those in the PJM region that will affect the capacity market beginning in June 2016. This market reform is called Capacity Performance, and intended to strengthen reliability of the region’s power supply. Capacity markets are designed to ensure enough supply is available to meet demand during peak summer hours and severe winter weather. The new program will result in higher capacity prices; however customers will benefit from fewer expected outages and price spikes.

In PJM, capacity prices are established through an auction three years in advances. The new rules will impact the time period from June 2016- May 2019, the final results of which will be shared on September 9, 2015.

Please note that regardless of supplier, customers with existing contracts that run past June 2016 will have an additional cost that is “passed through” on their bill as this reform is a formal change in law/regulation. Please also be aware when evaluating new contracts in this transition period, some suppliers may not include the impact of this increased charge as part of their all in price. Here at Power Management, we will work to provide our customers with an apples-to-apples comparison of all contract options to ensure customers are fairly evaluating supply options moving forward.

For more information please view the document released by PJM or contact Power Management!

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