Historically, PJM has released a large amount of capacity in RPM Incremental Auctions due to declining peak load forecasts, and more recently due to excess capacity created by Capacity Performance transition auctions. PJM affects these capacity releases using sell offers in the Incremental Auctions that are combined with market participants’ submitted buy bids and selloffers to set cleared capacity quantities and prices.
A review be conducted of PJM’s policies governing its Incremental Auctions and whether they yield reasonable results that correctly value capacity in circumstances where PJM is a capacity seller, and to revise those policies if they are deemed deficient. The general structure of the RPM Incremental Auctions including, but not limited to the number of incremental auctions, timing of incremental auctions, PJM participation in incremental auctions, etc. will also be evaluated.