The blame for this situation falls squarely on the capacity market designs that are driving generator revenues down, so low, that they cannot fund the work and investments required to ensure their availability under stressed conditions, which these statements clearly show.
Before the penalties, the plants were facing a liquidity crunch driven by low clearing prices in PJM’s recent capacity auctions, Justin Pugh, chief restructuring officer for the debtors, said in a court statement.
Power plant owners in PJM may owe up to $2 billion for failing to provide electricity during Winter Storm Elliott in late December, according to initial estimates by the grid operator in 13 Mid-Atlantic and Midwestern states and the District of Columbia.
One would think that electricity generator associations would be working aggressively, with a sense of urgency, to address this problem that all generators are facing today. But, that's not happening - it's like waiting for Godot. Solutions to reform capacity market designs to address this problem are available, AOCE, but there does not seem to be an urgency to solve this problem, based on generator behavior. Maybe a few more generator bankruptcies and shareholder lawsuits holding BoD members and C-Suite Exec personally liable will provide the "smelling salts" that generators need to get serious about solving these problems.