The Federal Energy Regulatory Commission (FERC) has approved the PJM Interconnection’s plan for a price cap and floor.
For the next two base capacity auctions, PJM will have a $325/MW-day price cap and a $175/MW-day floor. This proposal has been approved despite opposition from the grid operator’s market monitor, LS Power and others.
This plan is an attempt to squash skyrocketing prices. Without it, the price cap for the next capacity auction would likely have been about $500/MW-day while the floor would have been zero dollars.
This decision largely stemmed from the recent settlement with Pennsylvania Governor Josh Shapiro. He recently filed a complaint with FERC trying to lower the auction’s price cap.
