The results of the energy market dynamics in the first quarter of 2013 were generally positive for new coal units. In a continuation from the fourth quarter of 2012, new coal units ran at a lower fuel-only marginal cost than new combined cycle units. The combination of higher energy prices and higher gas prices relative to coal prices resulted in significantly higher energy market net revenues for a new entrant coal plant in the first three months of 2013. Energy market net revenues for a coal plant in seven zones in the first three months of 2013 exceeded fifty percent of the energy market net revenues for the full year of 2012.
Operating reserve charges increased by 111.8 percent to $260.2 million in the first three months of 2013 compared to the first three months of 2012. Day-ahead operating reserve charges increased by $5.3 million, or 29.6 percent, balancing operating reserve charges for reliability decreased by $4.1 million, or 18.4 percent, balancing operating reserve charges for deviations increased by $83.4 million, or 145.8 percent and reactive services charges increased by $32.8 million, or 144.0 percent. PJM began categorizing the costs of operating reserves paid to black start units as black start charges in December, 2012 and these black start charges were $22.2 million in the first three months of 2012.
Congestion costs increased in PJM by $63.5 million or 51.9 percent in the first three months of 2013 compared to the first three months of 2012. Congestion reflects the underlying characteristics of the power system, including the nature and capability of transmission facilities, the fuel cost and geographic distribution of generation facilities and the geographic distribution of load.
The Independent Market Monitor (also known as the Market Monitoring Unit or MMU) evaluates the operation of PJM's wholesale markets to identify ineffective market rules and tariff provisions, proposes improvements to market rules and tariff provisions when needed, monitors compliance with and implementation of the market rules, identifies potential anticompetitive behavior by market participants and provides comprehensive market analysis critical for informed policy and decision making. Joseph Bowring, the Market Monitor, ensures the independence and objectivity of the monitoring program.For a copy of the State of the Market Report, visit Monitoring Analytics at: http://www.monitoringanalytics.com/reports/PJM_State_of_the_Market/2013.shtml SOURCE Monitoring Analytics, LLC