PJM Capacity prices cleared higher than expected in the 2021/2022 auction. A notable drop in cleared nuclear generation was observed and believed to contribute to higher pricing, though this was partially offset by an increase in demand response, energy efficiency, renewable, and other thermal resources. Low energy prices are believed to be the key driver for the higher capacity prices as power plants increase their capacity offers to compensate for the lower energy prices and maintain profitability.

Prices continued to drop in ERCOT’s Houston zone. The 12-month ATC strip fell $4.50 (10%) to close at $41.45/MWh. The 24-month curve dropped $2.40 (5.5%) to $40.63/MWh, while the calendar 2019 strip slipped $0.10 (<0.5%) to $40.22/MWh.

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