PJM Interconnection Capacity Auction Reveals Power Shortfall in Pennsylvania
PJM Interconnection's recent capacity auction revealed a power shortfall of over 6,623 megawatts in Pennsylvania, sufficient for approximately 6.6 million homes, with only 774 megawatts of new generation clearing the auction. Capacity prices reached their cap, indicating a supply scarcity that may prompt a formal investigation and a Reliability Backstop Auction, potentially increasing costs without immediate infrastructure improvements. Policymakers are considering updates to the Local Resource Manufacturing Tax Credit to enhance baseload generation and leverage the state's natural gas resources.
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PJM Interconnection's recent capacity auction showed a shortfall of over 6,623 megawatts (MW) in Pennsylvania, which is approximately enough power for 6.6 million homes. Only 774 MW of new generation cleared the auction, indicating insufficient supply amid rising demand.
Capacity prices reached the price cap, signaling scarcity. This level of shortfall necessitates a formal investigation under PJM's tariff and could lead to a Reliability Backstop Auction, resulting in higher costs without immediate new infrastructure.
Pennsylvania's proposed new natural-gas capacity was only 342 MW, far less than Ohio's 3,363 MW, Virginia's 3,320 MW, and Kentucky's 786 MW. Policymakers are considering legislation to update the Local Resource Manufacturing Tax Credit to support baseload generation and enhance reliability. The state has an opportunity to leverage its natural gas resources if policy barriers are removed.
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