Brattle Experts’ Coauthored Report Assesses Avoidable Fixed Costs for Existing Generation in PJM

Brattle and Sargent & Lundy have prepared an analysis of avoidable fixed costs for existing generation in PJM. These avoidable cost estimates are an input to PJM’s gross Avoidable Cost Rates (ACRs), which are used to determine default offer thresholds for mitigating market power in the capacity market.

PJM’s Open Access Transmission Tariff requires it to review and update gross ACRs every four years. For this review, Brattle and Sargent & Lundy were retained to develop estimates through bottom-up cost analyses of representative existing plants. The proposed updated values would apply beginning with the Base Residual Auction for the 2030/31 delivery year and continue for the following three delivery years.

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