Markets and Reliability Committee

Soak Time Rule Change Deferred Until May

The PJM Markets and Reliability Committee agreed to defer a vote on a proposed rule change that would implement “soak time” modeling of resources until May. Soak time refers to the minimum period a unit must run from the generator breaker closure until it is dispatchable. (See “Modeling Generation Senior Task Force Recommendations,” PJM MRC Briefs: Dec. 19, 2019.)

Stakeholders disputed some of the analysis that PJM used to set soak time operating reserve credit rules and also raised concerns with the way the concept was being woven into energy offers.

It’s the second time the MRC has deferred voting on the issue, after requesting a one-month delay in December. The committee instead endorsed two other recommendations from the Modeling Generation Senior Task Force that can be implemented in the near term while PJM focuses on completion of its next generation energy market (nGEM).

The Tariff and Operating Agreement revisions, which were also approved by the Members Committee, will increase the number of segments on the energy offer curve (effective in 2020) and introduce hourly differentiated segmented ramp rates (late 2020).

The task force, assembled in 2017, developed the solutions to improve resource modeling for “complex resources” in PJM’s market clearing engines, including combined cycle units, coal units with multiple mills and pumped hydro.

Primary Frequency Response Task Force Hiatus Extended

The committee agreed to keep the Primary Frequency Response Task Force on hiatus through the first half of 2020.

Primary frequency response (PFR) is the ability of generators to automatically change their output in five to 15 seconds when the grid’s frequency strays above or below 60 Hz. As more renewables enter the resource mix and coal plants retire, the grid can become more susceptible to these frequency swings, threatening system reliability.

The task force wrapped up its action last year and promised to update the Operating Committee on a quarterly basis of PJM’s performance. During the most recent update in October, PJM said 583 units with capacities of 50 MW or greater were evaluated for PFR across 10 events between March and September. The selected events for analysis met one of three qualifications: frequency goes outside the +/- 40-MHz deadband, frequency stays outside the +/- 40-MHz deadband for 60 continuous seconds or minimum/maximum frequency reaches +/- 53 MHz.

No more than 28 units provided PFR during any of the selected events. In some cases, no units responded. PJM said most critical load and black start units evaluated did not provide PFR because many were offline, operating at maximum capacity or had inconclusive results.

The task force will continue to update the OC on a quarterly basis of PFR results across the RTO.

Credit Risk Tariff Revisions on Hold

PJM Chief Risk Officer Nigeria Poole Bloczynski told the MRC that Tariff revisions that would update the RTO’s market participant risk profiles and expand updated credit rules to apply to all markets — not just the financial transmission rights market that was the subject of GreenHat Energy’s massive default — are on hold temporarily as stakeholders continuing reviewing the proposed language.

“We’ve made significant progress, but we also acknowledge that we are moving a little fast,” she said. “Feedback internally has suggested we take our time to get this right.”

PJM hired Bloczynski in July after an independent probe of the GreenHat default found the RTO’s executive team lacked credit expertise. She said last month she’s hiring four additional staff in her department, including a manager of credit risk and trading risk, and challenging current employees to automate as many processes as possible.

In the meantime, Bloczynski encouraged leaders of PJM member companies to attend meetings of the Financial Risk Mitigation Senior Task Force, from which many of the Tariff changes originate.

On Friday, the ISO/RTO Council asked FERC to reject financial traders’ request for a rulemaking to update and standardize RTO credit policies nationwide, saying it would upset stakeholder proceedings on the issue. (See related story, RTO Council Balks at Credit Rulemaking.)

Later, the Members Committee approved revisions to the OA endorsed by the task force and MRC to hold five long-term FTR auctions a year, instead of three, to increase visibility into portfolio conditions so that more collateral can be collected if necessary. The revisions also would alter the structure of Balancing of Planning Period auctions so that participants can buy and sell in any month of the year, rather than being limited to a specific quarter. (See “FTR Credit Rules Endorsed,” PJM MRC Briefs: Dec. 19, 2019.) There were three objections to the vote, including from the Consumer Advocates of the PJM States and the PJM Industrial Customer Coalition.

Members Committee

PJM Annual Meeting Scheduled in Chicago

PJM will host its annual meeting at the Drake Hotel in Chicago on May 4-6. Registration for the event opens on Feb. 5 and will close April 29.

Member companies, voting proxies, state and federal employees, and event sponsors can attend free of charge. Otherwise, attendees must pay a $400 guest fee for media, spouses, children and others that covers all meals and one leisure activity.

Manual Revisions, Tariff Changes Endorsed

The MRC endorsed revisions to Manual 38: Operations Planning that included updates from the periodic cover-to-cover review and updated procedures.

The Members Committee endorsed:

• revisions to the OA to changing the competitive transmission proposal fee structure. PJM will charge a $5,000 nonrefundable fee to all developers who submit competitive proposals. Itemized study costs will be added as necessary. RTO officials said the current tiered approach doesn’t account for the increased cost of the new comparison framework that involves an independent consultant’s review and legal and financial analyses. (See “Competitive Transmission Proposal Fee,” PJM MRC Briefs: Dec. 19, 2019.)
• revisions to the Tariff and OA to align them with PJM’s actual implementation of market-based parameter-limited schedules. (See “Parameter-limited Scheduling Fix,” PJM MRC Briefs: Dec. 19, 2019.)
• revisions to the OA clarifying the requirements for sharing forecasted unit commitment data to transmission owners for reliability studies, to ensure consistency with NERC standards and PJM manuals.
• revisions that clarify that market sellers can only change the format of maintenance adders ($/MMBtu, $/MWh or $/start) during the annual review period for energy offer components. (See “Manual 15 Clarifications on VOM Costs,” PJM MIC Briefs: Nov. 13, 2019 and “Manuals Endorsed,” PJM MRC/MC Briefs: Dec. 5, 2019.)

– Christen Smith