Born from the 2014 Polar Vortex failure, "Capacity Performance" (CP) is PJM's strict enforcement mechanism. It ensures generators show up when needed—and penalizes those who don't. Here is what it means for your facility's bottom line.
In 2014, 22% of PJM generation failed during the Polar Vortex due to frozen equipment. PJM responded by creating a "Zero Tolerance" policy.
Generators who fail to perform during a "Performance Assessment Interval" (PAI) face massive fines, often exceeding their entire annual revenue.
Demand Response (DR) assets are treated as generators. If you cut load during a PAI, you get paid the same bonus rate as a power plant.
A PAI is triggered whenever PJM declares an Emergency Action. During these minutes, every resource with a capacity commitment MUST deliver energy.
Even if you don't participate in DR, Capacity Performance impacts your bill. Retail suppliers must procure capacity that includes this "insurance premium." Since 2018, capacity prices have included a risk premium to cover potential CP penalties.
1. Know your "PLC" (Peak Load Contribution):
Your share of the capacity cost is determined by your usage during the 5 highest peak hours of the previous summer (5CP). reducing usage during these hours lowers your capacity obligation for the entire next year.
2. Check your Supplier Contract:
Look for "Capacity Change in Law" clauses. After recent FERC orders increasing reserve requirements, many suppliers are passing through extra capacity costs mid-contract.
The 2025/2026 PJM Capacity Auction (BRA) cleared at record highs in several zones (especially Baltimore/BG&E and Dominion). Expect capacity line items to double on bills starting June 1, 2025.