Incenting the Old, Preventing the New
American Public Power Association
Completed 2011
On behalf of the American Public Power Association's Electricity Markets Reform Initiative, Synapse reviewed the performance of capacity markets to date with a focus on PJM's Reliability Pricing Model. It was found that the high cost of these markets for consumers is not justified by the results: windfall profits for incumbent generators, and little gains in new generation where it is needed most. An important exception has been the development of clean, affordable demand-side resources, but at far too high a cost.