EAGLEVILLE, Pa., May 16, 2013 /PRNewswire/ -- PJM Interconnection's wholesale electric energy and capacity markets produced competitive results in the first three months of 2013, according to the 2013 State of the Market Report for PJM: January through March, released today by Monitoring Analytics, LLC, the Independent Market Monitor for PJM.
The Independent Market Monitor, Joseph Bowring, announced findings of the report today. The report is the Independent Market Monitor's quarterly assessment of the competitiveness of the wholesale electricity markets managed by PJM in 13 states and the District of Columbia. It analyzes market structure, participant behavior and market performance for each of the PJM markets.
"Our analysis concludes that the results of the PJM Energy and Capacity Markets in the first three months of 2013 were competitive," Bowring said.
Bowring also stated that "the MMU continues to recommend improvements to PJM's market design in order to enhance the competitiveness and efficiency of PJM markets."The market dynamics changed in the first quarter of 2013. A combination of increased, weather related, demand, and higher fuel costs led to a reversal of the downward trend in LMP. The hourly average load increased 5.8 percent in the first three month of 2013 compared to the first three months of 2012. The load-weighted average LMP was $37.41 per MWh, 19.9 percent higher in the first quarter of 2013 than in the first quarter of 2012. The price of natural gas, especially in the eastern part of PJM, increased in the first three months of 2013, and coal prices were mixed in the first three months of 2013 compared to the first three months of 2012. As a result of the relative changes in fuel costs, coal-fired units were more competitive with gas-fired units, coal output increased in the first quarter and gas output decreased in the first quarter, also reversing the trend towards reduced coal output.