A coalition of state officials, industrial power buyers and municipal and cooperative utilities has asked the Federal Energy Regulatory Commission to cut by possibly 54% the capacity payments established through auctions run by the PJM Interconnection. The coalition, calling itself the RPM Buyers, targeted transitional auctions for forward capacity under what PJM calls its Reliability Pricing Model, or RPM. The challenged auctions, held from July 2007 through January, were transitional because they did not allow for a full three years between auction and delivery period. At a gross cost of $26.2 billion, the transitional auctions "were no more than an enormous and unwarranted wealth transfer from customers in the PJM region to existing capacity resources," said the filing, made through law firm Kaye Scholer. The payments are made to generators and demand response providers.
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