Capacity Rates Set to Fall in PJM

By August 29, 2011 News

Capacity rates in the PJM market are going to be falling for customers over the next few years. Capacity costs are an important cost component for retail customers in the PJM market area. Rates are set on an annual basis through auctions that generators participate in and apply to all customers in a utility territory on a June – May basis each year.

Customers in all areas of PJM are slated to see a roughly 34% decrease in capacity rates beginning with their June 2011 usage. Rates for 2012 – 2013 will be falling a further 86% over 2011 – 2012 rates beginning with June 2012 usage for customers of some utilities including ComEd in Illinois, Duquesne in Pennsylvania, and AEP in several states. Other customers will see capacity rates remain relatively unchanged, and customers of PSEG and Delmarva will see rates increase about 46% over 2011 – 2012 rates. Depending on how your contract is structured, this cost component may be included in your retail electricity price or may be passed through as a separate line item. Consult with Energy Edge on the specific impact to your electricity costs.