The PJM Interconnection, an interstate electricity grid operator, has announced it is delaying its next set of electricity capacity auctions for six months in order to craft reforms for its capacity market.

On Aug. 1, Exelon, the parent company of Atlantic City Electric, said that the most recent PJM Interconnection capacity auction for 2025 electricity generation will likely lead to double-digit rate increases that could be much more significant than any one-year increase experienced to date.

PJM’s delay, announced Oct. 10, will affect at least three upcoming auctions set to be held in the six-month period, the nearest one being a planned auction in December to buy capacity for the 2026-2027 delivery year.

PJM is the grid operator for a 13-state region that includes New Jersey. It uses the capacity auctions to ensure that it has enough power supplies to meet its projected needs for a given future time period. It is a wholesale, not a retail, market.

In September a number of organizations, including the Sierra Club and the Union of Concerned Scientists, wrote to the Federal Energy Regulatory Commission arguing that PJM had failed to reflect “reliability must-run power plants” in its capacity auctions. These are power plants that are kept open past their expected retirement dates in order ensure grid reliability.

The complaint filed with Energy regulatory Commission says that by allowing the “must-run” units to choose whether to participate in the capacity market auctions, PJM introduces an overall supply constraint that increases prices for consumers. The complaint seeks to force PJM to reform its rules to consistently account for “must-run” arrangements.

The groups that filed the complaint are aiming for a more inclusive capacity market that may have a calming effect on soaring retail electricity prices.

The picture painted in the complaint is one in which consumers are currently required to pay to keep retiring plants online, only to then have the contributions of those plants unaccounted for in the capacity market auctions.

PJM is expected to file a response to the complaint later this month.

Contact the reporter, Vince Conti, at vconti@cmcherald.com.