The clearing prices for both auctions were lower than all market participants seemed to be expecting. The MISO auctions were significantly lower than expected. MISO has ten capacity zones, and they all cleared at $1.50 per MW Day. As a point of reference, zones 2-7 all cleared at $72.00 per MW Day for the 2016 capacity period. A review of the MISO/Ameren capacity chart above shows the volatility of capacity prices in the Ameren service territory over the last few years. The upside to this current auction is that electricity pricing for the next year starting in June is quite attractive from both an energy and capacity point of view. While the low capacity price is only for one year, this low price does impact longer-term pricing from the perspective that future capacity prices will be valued lower by suppliers.
The auction results in PJM revealed generally lower capacity prices throughout the pool though there were exceptions. PJM is the largest Power Pool in the world, and it does have pockets of transmission congestion/limits in certain areas, which is reflected in the 2020-21 pricing. The PJM/ComEd area was one of the places penalized for congestion. While the $188.12 per MW Day clearing price was slightly lower than the PJM/ComEd prices for 2018-19 and 2019-20, it was significantly higher than the $76.53 per MW Day price in most of the PJM footprint (though there were other exceptions). It is important to note that this was the first PJM Capacity Auction where all resources needed to meet PJM’s enhanced Capacity Performance standards or face steep non-performance payments.