PJM BRA Hits the Cap Again Ahead of RBP Capacity Procurement Processes

Research evidence excerpt

PJM BRA Hits the Cap Again Ahead of RBP Capacity Procurement Processes

Outlining Uplift From the Updated Auction

In light of the 2028/2029 PJM BRA results and subsequent company disclosures from CEG, VST, and TLN,

we provide an overview of the "gross, auction-over-auction" expected capacity revenue impact on

calendar basis simplistically using the lower cleared cap price along with the additional ELCC-adjusted

acquired capacity. Importantly, this does not reflect our current forecast assumptions for pricing

and adjusted capacity for the forward planning windows including Talen Energy, where the actual

gross impact will likely also reflect the ramp of its contract at the Susquehanna Nuclear Facility

(both energy & capacity)

Exhibit 1 - 2028/2029 PJM BRA Capacity Revenue Change vs. 2027/2028 Results

2027/2028 Auction Results 2028/2029 Auction Results 2028/2029 vs. 2027/2028 Deltas

Company Cleared Capacity (MW) Capacity Revenue ($MM) Cleared Capacity (MW) Capacity Revenue ($MM) Cleared Capacity (MW) Capacity Revenue ($MM)

CEG 17,950 2,191 18,875 2,239 925 48

VST 10,566 1,289 10,924 1,296 358 6

TLN 8,745 1,067 10,180 1,208 1,435 140

The 2027/2028 Auction Results utilize the $333.44/MW-day cap and account for the included Leap Day, and the 2028/2029 Auction Results utilize the $325.00/

MW-day cap.

Source: BMO Capital Markets, Company Reports

With the FERC ordered PJM price collar extended through the 2029/2030 auction we would not expect any

meaningful revenue uplift to capacity revenue projections absent additions/removals of cleared capacity,

as the $325/MW-day cap will only be adjusted for accredited capacity changes. Importantly, we would

note that we do not believe that even at the uncapped, simulated clearing capacity prices of