On May 23,2018 the Pennsylvania New Jersey Maryland (PJM) Interconnection, the US's largest market for grid capacity, released the results of its 2021/2022 Reliable Pricing Model (RPM) Base Residual Auction (BRA). . The purpose of the auction is to procure enough power resources to meet electricity demand in the PJM, which includes all or parts of 13 states and the District of Columbia, for the three-year period covered by the auction.

According to the results, generators that sell power into the PJM will receive $140 megawatt(MW)-day starting in 2021. This represents a significant increase from May 2017's prices which were between $76.53 and $86.04 (see Article, US Project Finance Round-Up: Mid-Year 2017). The price increase is due to several factors including an increase in coal and nuclear power plants in the region.

The auction cleared about 163,627.3 MW of unforced capacity which represents a 22% reserve margin. The auction also attracted a diverse mix of resources, including significant increases in demand response and energy efficiency resources and wind and solar resources. According to the results, about:

According to the PJM, the Unforced Capacity (UCAP) of Generation Capacity Resources offered into this auction, but not previously offered, was 1,098.5 MW comprised of 322.2 MW of new generation units and 776.3 MW of uprates to existing or planned generation units. The quantity of new Generation Capacity Resources cleared, regardless of whether they were previously offered, was 1,401.3 MW comprised of 893 MW from new generation units and 508.3 MW of uprates.

The BRA's auction clearing process commits capacity resources to procure target capacity reserve levels for the RTO in a least-cost manner, while simultaneously recognizing and enforcing the reliability-based constraints.

The clearing solution may be required to commit capacity resources out of merit order but again, in a least-cost manner to ensure all constraints are respected. In situations where one or more of the constraints results in the out-of-merit commitment, resource clearing prices will reflect the cost of resources selected out of merit order to meet the necessary requirements.

The higher prices may mean that projects that had been postponed or delayed because of the low 2017 prices may be restarted.