KBRA Publishes Project Finance Research: Takeaways from Recent PJM Capacity Auctions

Kroll Bond Rating Agency’s (KBRA) Project Finance Group has seen
significant volatility in Pennsylvania, New Jersey, and Maryland
Interconnection LLC (“PJM”) capacity prices during the last five
auctions. Capacity prices in the PJM regional transmission organization
(“RTO”) have declined from a high of $164.8/MW-day in the 2018/19
auction to $76.5/MW-day in the 2020/21 auction. The most recent auction
for the period of June 1, 2021 to May 31, 2022 saw a nearly 83% increase
in capacity prices in the RTO region to $140/MW-day. KBRA believes the
increase was mainly driven by lower energy prices and higher development
costs for new power facilities. While the increase was viewed as a
positive for merchant power projects, the question remains whether
prices will hold in future auctions.

In this article, KBRA discusses the major factors contributing to this
volatility and its impact on future capacity prices.

To view the report, please click here.

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About KBRA and KBRA Europe

KBRA is a full service credit rating agency registered with the U.S.
Securities and Exchange Commission as an NRSRO. In addition, KBRA is
recognized by the National Association of Insurance Commissioners as a
Credit Rating Provider and a certified Credit Rating Agency (CRA) by the
European Securities and Markets Authority (ESMA). Kroll Bond Rating
Agency Europe Limited is registered with ESMA as a CRA.

View source version on businesswire.com: https://www.businesswire.com/news/home/20180712005807/en/

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