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Market Monitor – PJM 2021/22 Base Residual Capacity Auction results in a more than doubling in Rest of RTO zone prices.

On May 23, the PJM Interconnection’s 2021/2022 Base Residual Auction results were released. The clearing price for the baseline “Rest of RTO” and many other zones increased significantly with the Rest of RTO price surging ~83% to $141/MW-day. ATSI saw the largest increase in capacity prices, rising over 100% to $158/MW-day. BGE saw an 87% increase rising to $162/MW-day.

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The decline in energy prices was a major contributor to the overall increase in clearing prices as generators sought increased revenues in the capacity market through higher offers to compensate for the drop. In addition, decreased total clearing capacity contributed to the increase in capacity prices. The auction cleared small incremental increases in energy efficiency, natural gas, and coal. However, only 19,900 MW’s of nuclear generation, or 7,400 MW’s less than last year, cleared. Overall, there were only 893 MW’s of new generation cleared in the auction.

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