Global Credit Research – 11 Aug 2015
New York, August 11, 2015 — PJM Interconnection LLC’s (Aa3 stable) capacity auction that began on August 10 is expected to be credit positive for the merchant power industry but will see new power plants competing against the old, Moody’s Investors Service says in “PJM Capacity Auction Pits New Plants Against Old, with Higher Prices Likely”.
“We expect that this auction will pit existing coal and nuclear plants, which suffer from weak margins in the energy market, but have a new ability to bid high in the capacity market, against new gas-fired power plants, which can afford to bid low in the capacity market given their stronger margins in the energy market,” says Moody’s Vice President — Senior Credit Officer Swami Venkataraman.
