Peak Demand Falling, PJM Cancels July Capacity Auction

Big PJM news on Maryland Energy Report:

PJM Interconnection, the private corporation that manages the regional transmission system including Maryland, has canceled one of their regular capacity auctions.

These auctions are based on forecast of peak demand during the hottest summer months. Local utilities must purchase contracts for generation capacity to ensure that they will have sufficient power to meet peak demand.

Even before the current recession, demand forecasts were falling because of increasing energy efficiency.

Here is a link to the rest of the post.

Here is what PJM said about the cancellation:

This is to inform PJM Market Participants that the RPM Second Incremental Auction for the 2011/2012 Delivery Year originally scheduled for July 12, 2010 has been canceled. Through the 2011/2012 Delivery Year, Second Incremental Auctions are conducted only when there is an increase in the RTO’s unforced capacity obligation due to a load forecast increase. As the 2010 RTO peak load forecast for the 2011/2012 Delivery Year is lower than the peak load forecast used in the 2011/2012 Base Residual Auction, the 2011/2012 Second Incremental Auction is canceled.

I wonder what the WV Reliability guys will say about this one.  Does this look like “increasing demand for electricity” to you?  Mike Morris is CEO of AEP, the largest company in PJM and a partner in PATH.  He knows.  Last fall he said, about future demand, “I don’t know if we’ll ever get all of it back.”

Remember, it is “load forecast increase” that PJM uses to create their argument for PATH.  Now PJM says there is no increase.  No increase, no PATH.