Charts & Industry Knowledge | United States | TPI Efficiency
About Energy Deregulation

Under deregulation, suppliers purchase electricity or natural gas at wholesale and may be able to sell it at a lower price. The consumer continues to have delivery provided by their current local utility. 

Benefits to the consumer:

  • Price protection (with a wider variety of pricing options)

  • Competitive prices may now be available to the consumer

  • More product plans are available for customers

  • Prices may be stabilized for the consumer

  • Larger selection of products that support customer needs

  • Freedom of choice

Regional Transmission Organizations (RTO) are responsible for maintaining adequate capacity between utility companies

  • The RTO serving the Northeastern United States is PJM Interconnection, L.L.C. (servicing all or parts of 13 states plus District of Columbia)

 

PJM uses a Reliability Price Model (RPM) - Determines Capacity

  • Auction process gains commitments from resources 

  • Sets price for capacity

  • Sends price signal to potential developers of generation, demand response and/or transmission.

Capacity represents the need for adequate generating resources

  • Capacity ensures there is enough electric supply to meet peak demand at all times.

PJM Determines Capacity
Components of Your Electricity Price

Bypassable Generation and Transmission Related Elements 

Capacity Charges in the Midwest

OHIO - Base Residual Auction Results - '21-'22

2X Increase to Capacity Cost in PJM

The results for the 2021/2022 Base Residual Auction (BRA)-effectively determining what you will pay in capacity costs from June 1, 2021 through May 31, 2022-were announced on May 23, 2018.

  • The 2021/2022 BRA cleared at $141 per-Megawatt-Day (MW-Day) for most of PJM (the Regional Transmission Organization (RTO) that manages the movement of wholesale electricity for much of the Northeastern US.)

  • This price includes American Electric Power-Ohio (AEP)which is significantly higher than the 2020/2021 clearing price of $76.53 per MW-Day.

  • FirstEnergy Ohio (FE) cleared at $158 per MW-Day. This is about $17 per MW-Day higher than the rest of the RTO.

Table 1: Capacity Charges in Ohio Base Residual Auction (BRA) / BRA & Capacity Performance (CP) Blend ($/MW-day)

Table 2: Current Capacity Prices for the 2016/2017 through 2021/2022 Delivery Years for Ohio customers in FE, AEP, Dayton Power & Light (DP&L), and Duke territories.

Capacity Charges in the Mid-Atlantic

MARYLAND - Base Residual Auction Results - '21-'22

2X Increase to Capacity Cost in PJM

The results for the 2021/2022 Base Residual Auction (BRA)-effectively determining what you will pay in capacity costs from June 1, 2021 through May 31, 2022-were announced on May 23, 2018.

  • The 2021/2022 BRA cleared at $141 per-Megawatt-Day (MW-Day) for most of PJM (the Regional Transmission Organization (RTO) that manages the movement of wholesale electricity for much of the Northeastern US.)

  • Baltimore Gas & Electric (BG&E) cleared at $162 per MW-Day. This is about $21 per MW-Day higher than the rest of the RTO.

Table 1: Capacity Charges in Maryland Base Residual Auction (BRA) / BRA & Capacity Performance (CP) Blend ($/MW-day)

Table 2: Current Capacity Prices for the 2016/2017 through 2021/2022 Delivery Years for Maryland customers in Baltimore Gas & Electric (BG&E), Delmarva Power and Light Company, Potomac Edison and Potomac Electric Power Company (PEPCO)

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