US PJM proposes raising minimum capitalization to $2 million for market participants
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A man walks by power lines in Mountain View, California, U.S., August 17, 2022. REUTERS/Carlos Barria
June 1 (Reuters) - U.S. grid operator PJM Interconnection on Monday said it has proposed raising its minimum capitalization threshold to $2 million for wholesale electricity market participants to keep up with inflation, better manage risk, and protect market participants from default.
PJM said the proposed changes would be the first since 2011 and would take effect over time, with a phased approach to give participants time to adjust.
The proposal includes a 3% annual increase to the threshold to account for inflation, beginning five years after implementation.
The PJM Tariff provides alternative means for new or emerging market participants to gain market access, including posting collateral, letters of credit or surety bonds to a corporate guaranty.
The proposed changes received near-unanimous support from the January Members Committee, with implementation to take effect on April 30, 2027.
(Reporting by Pooja Menon in Bengaluru; Editing by Chris Reese)
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