The PJM Board of Managers is pursuing an approach that would spread the cost of continuing to operate Constellation Energy’s Eddystone Generating Station to all PJM consumers. (See PJM Stakeholders Propose Cost Allocation Models for DOE Emergency Orders.)
In a June 26 letter to stakeholders, Chair David Mills said the board selected a proposal sponsored by Gabel Associates through the Critical Issue Fast Path (CIFP) process initiated to determine how Constellation should be paid for keeping Eddystone online under a Department of Energy emergency order.
Mills noted that the package was the only one to receive a supermajority of sector-weighted support during a June 18 Members Committee (MC) meeting. The board has directed PJM staff to file the proposal at FERC by the end of June.
Gabel’s proposal was set apart from five other packages sponsored by PJM and the East Kentucky Power Cooperative (EKPC) by its RTO-wide allocation and focus on the current DOE order. Some of the alternatives contemplated how PJM should proceed if more generators are ordered to remain online by the federal government. The cost allocation would expire Aug. 28 along with the conclusion of the emergency order.
The proposal would determine the charges for each entity by multiplying its share of the RTO monthly unforced capacity (UCAP) obligation by the monthly credit paid to Constellation. The costs to be included in that credit are subject to review by the Independent Market Monitor (IMM).
A new line item will be included on billing statements showing the cost of that credit, and PJM will post information on its website about the credits and guidance on how they are settled. The proposal carries a June 1 implementation date to capture costs Constellation may have incurred since the DOE order took effect.
During the MC meeting, Constellation Vice President of Wholesale Market Development Adrien Ford said the company did not vote for the proposal out of concern it would allow cost allocation to lapse if DOE issues subsequent orders to keep Eddystone operational. Some speakers encouraged the board to modify the Gabel proposal to apply to either additional orders on Eddystone or orders that may be announced in coming weeks.
Carl Johnson, representing the PJM Public Power Coalition, said some of the proposal’s support came from a belief that more orders should be addressed as they arise.
Mills wrote that the board deliberated on modifying the proposal but opted against making any changes due to mixed feedback it received. He also noted that the Markets and Reliability Committee endorsed a PJM issue charge to consider a long-term cost allocation framework for deactivations delayed under the Federal Power Act (FPA) Section 202(c) orders.
“Recognizing there may be further DOE 202(c) orders related to generating units in the PJM region in the foreseeable future, the board is encouraged by the fact that the stakeholders have endorsed an issue charge to work on a cost allocation methodology for future DOE 202(c) orders that may require resources to remain operationally available beyond previously anticipated deactivation dates. PJM will announce the commencement of that stakeholder discussion in the near term,” he wrote.
PJM reported that it has dispatched Eddystone during a heat wave affecting the PJM region on June 23, 24 and 25. Unit 3 ran for 16 hours on June 23 and all day on the 24th, while Unit 4 operated 14 hours on the 23rd and 20 hours the following day. Both units ran all day on June 25.
