Capacity Auction Produces Mixed Results

Capacity Auction Produces Mixed Results

PJM Interconnection, recently held its annual capacity auction that directly impacts the bottom-line utility prices paid by consumers.

Whether it was good news or bad news depends on where you operate your business.

PJM uses a Reliability Pricing Model to auction the value of capacity within each of the utilities. The purpose of this mechanism is to quantify the value of adding capacity and to incentivize investments for increased power generation on the open market. Capacity rates are set years in advance, and the results can shape the energy decisions you should make.

These capacity rates are included in the electric bills that we all pay. Suppliers can include the capacity charges in their rates and can sometimes pass it though separately if the rates don’t cover this component.

For more information about how the latest results impact you, speak to your local Muirfield Energy Consultant.


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