By Christen Smith

FERC said Thursday it will hold PJM’s fast-start pricing compliance filing in abeyance until July 31 in order to give the RTO enough time to resolve pricing and dispatch misalignment issues currently under review by stakeholders (ER19-2722).

In April, the commission ordered PJM and NYISO to revise their tariffs to allow fast-start resources to set clearing prices, saying their current rules are not just and reasonable. (See FERC Orders Fast-start Rules for NYISO, PJM.) PJM submitted a compliance filing in July that the Independent Market Monitor, state commissions and consumer advocates argued didn’t provide clear evidence that it would implement fast-start pricing correctly.

Specifically, the groups said that PJM uses different market intervals to calculate prices and dispatch instructions, suggesting that resources’ compensation doesn’t correspond to their dispatch instructions.

As part of its April order, FERC directed PJM to alter its real-time energy market clearing process to consider fast-start resources “in a way that is consistent with minimizing production costs.” The process requires PJM to first execute a cost-minimizing dispatch run, followed “by a pricing run where integer relaxation for fast-start resources allows them to set price.” The use of integer relaxation is intended to pinpoint a unit’s commitment costs in the pricing run and allow for their recovery through a market process rather than administrative methods.

“However, PJM may not be able to implement these separate dispatch and pricing runs in a way that is just and reasonable without first resolving the pricing and dispatch misalignment problem,” FERC said Thursday. “If fast-start resources dispatched in a given market interval could be compensated with a price from a different market interval, prices may not accurately reflect the marginal cost of serving load.

“Moreover, implementing fast-start pricing as directed … could exacerbate the pricing and dispatch misalignment issue because the lost opportunity cost payments … may be calculated based on inaccurate prices and, therefore, may not correctly compensate opportunity costs.”

FERC said implementing fast-start pricing now could also render lost opportunity cost payments ineffective “because they may not provide correct incentives to follow dispatch.”

PJM’s stakeholder process to fix the issue remains ongoing, with plans to conclude the effort by May.