Grid operator PJM pushes for electricity auction change as concerns grow over peak winter demand


Citing the need for reforms, Delaware operator PJM will seek a delay in upcoming power supply auctions.

The action followed PJM Board consideration of stakeholder comments sought in its Feb. 24 letter announcing a launch of an accelerated process to ensure adequate year-round reserves.

The Utility Dive website wrote that the push came after bitterly cold conditions around Christmas led to some power plants struggling to generate enough electricity. It led to a short-lived advisory from PJM, calling on utility customers to reduce power consumption.

Click here for an explantion of the power supply crunch. (Registraton may be required)

PJM has focused on peak production during the summer months when consumption is highest but is now looking at year-round reliability as well as ensuring that generating plants are “winter-proofing” operations.


The power mix has become more diverse at PJM and issues can crop up regarding natural gas supplies and extending to conveyer belts not operating in extreme conditions. Similar issues emerged in the Texas “go it alone” power grid when infrastructure was not wintre-proofed.

The PJM board requested stakeholder feedback on a possible delay could aid in design rule changes that apply to future options.

“In arriving at this decision, the board recognized that, despite the implications of auction delay, reforms are necessary to the capacity market design in order to conduct an effective Base Residual Auction,” PJM stated in an email to stakeholders on March 27. “The Board therefore determined that PJM should postpone executing any further auctions under the current rules until we go through the stakeholder process and file resulting rule change proposals with FERC,” the PJM letter stated.

PJM is preparing a filing with the Federal Energy Regulatory Commission, which must approve any schedule changes. PJM is also scheduling a special Members Committee and Transmission Owners Agreement – Administrative Committee to consult with the Members prior to filing.

According to Utility Dive, PJM wants to ensure that power plants that offer power at auctions are capable of operating in tough winter conditions.

Preparations for the June auction will continue in the event that FERC does not accept the request, in which case PJM will proceed with the June auction as scheduled.

The PJM capacity auction, called the Base Residual Auction, procures power supply resources before the delivery year to meet electricity needs in the PJM service area, including Delaware and a dozen other states in the Mid-Atlantic and into the Midwest.

The letter did not mention other challenges including more electric vehicles tapping into the grid and the wider use of heat pumps that use electricity.