PJM issued a market notice stating, "PJM has identified a potential credit risk associated with the upcoming Third Incremental Auction for the 2020/2021 Delivery Year which is scheduled to begin on Feb. 24, 2020."

PJM said in the notice that, "Even though the risk is expected to apply to only a small number of bids, PJM seeks to put capacity market participants on notice that should a capacity market participant submit Buy Bids in an Incremental Auction that could result in a position that is in excess of the committed Unforced Capacity in such delivery year in the same account, PJM will require the participant to post collateral to secure any uncovered Buy Bid position in accordance with the Peak Market Activity provisions of the Tariff, Attachments Q and DD. Should the market participant not satisfy the collateral requirement, PJM may not clear such participant’s Buy Bid(s). Such market participants must have valid business purpose to utilize the Buy Bid(s) to replace a capacity commitment as required by the Tariff, Attachment DD."

PJM said in the notice that, "While PJM has the ability to collect collateral under such circumstance and will do so, PJM also has determined that additional clarity and protections with respect to certain capacity market scenarios should be considered by stakeholders. Accordingly, PJM plans to discuss this at the upcoming MC Webinar on Feb. 18, 2020, and will introduce a new problem statement and issue charge in the near term."