Prices in the PJM Interconnection's annual capacity auction fell sharply this year, with the exception of New Jersey, thanks to new generation, an increase in imports and weak load growth, PJM said Friday.
PJM's annual capacity auction, also known as the reliability pricing model's base residual auction, opened on May 13 and covered delivery year 2016/2017.
The regional transmission organization clearing price plunged to $59.37/MW-day, a roughly 56% decrease from its clearing price of $136/MW-day in la t year's auction for delivery year 2015/2016. The clearing price for the MAAC zone -- which includes Pennsylvania, New Jersey, Maryland and Delaware -- fell to $119.13/MW-day, a 28.9% decrease from last year's clearing price of $167.46/MW-day.
"Prices were generally lower than last year?s auction due to competition from new, gas-fired generation, low growth in demand because of the slow economy and increased imports from other regions, primarily to the west of PJM," Andrew Ott, PJM's senior vice president of markets, said in a statement. "These factors also contributed to a reduction in commitment of demand resources."
About 169,160 MW of resources cleared in this year's auction, including a record-breaking 5,463 MW of new generation. About 4,282 MW of the new generation came from new units while roughly 1,181 MW came from uprates to existing units, according to PJM.
Imports also jumped up this year, rising to about 7,484 MW in total, a roughly 90% increase over last year's import total of 3,935 MW. About 4,723 MW of those imports came from the Midcontinent Independent System Operator, which imported just 2,078 MW of resources in last year's auction.
Along with increased supply from new generation and imports, the demand growth modeled for this year's auction was also largely flat. The footprint-wide peak forecast load for 2016/2017 was 165,425 MW, up slightly more than 1% from 2015/2016's forecast load largely due to the integration of the East Kentucky Power Cooperative.