PJM will pay an Illinois wind farm at least $10 million under a FERC-ordered resettlement of incremental capacity transfer rights (ICTRs) to the Commonwealth Edison locational deliverability area (LDA), the RTO said Thursday.
On April 16, FERC ordered PJM to recalculate the ICTRs for Radford’s Run Wind Farm, agreeing with facility owner E.ON Climate & Renewables N.A. that the analysis should have used the base case for the 2015 Base Residual Auction, entitling it to 279 MW of ICTRs (EL18-183). (See PJM Ordered to Recalculate Wind Farm’s Capacity Rights.)
ICTRs — available to interconnection customers that are required to fund a transmission facility — are awarded based on how much the improvement increases the transmission import capability into an LDA. The rights are good for up to 30 years.
In 2018, the commission ordered a paper hearing after granting a complaint by Radford’s Run, which said PJM unfairly denied ICTRs for funding an upgrade identified in its system impact study to mitigate a thermal overload on the 345-kV Loretto-Wilton Center line. The 306-MW wind farm in Macon County, Ill., began operations in 2018. The commission ordered the hearing to determine whether the upgrade increased the capacity emergency transfer limit of the ComEd LDA, entitling it to ICTRs.
The commission’s April 16 order entitled Radford’s to receive payments for the capacity auctions held in 2016-2018 for delivery years 2019/20, 2020/21 and 2021/22. It also required PJM to resettle payments for the ICTRs and to rebill affected load-serving entities for the nearly complete 2019/20 delivery year.
On Wednesday, PJM canceled a presentation on the resettlement that was scheduled for the Market Implementation Committee. The presentation said the annual economic value of the 279-MW ComEd LDA ICTR was almost $10 million for 2019/20, $1.04 million for the upcoming 2020/21 delivery year and $5.6 million for 2021/22, as of the first Incremental Auction, which is subject to change based on results of the second and third IAs.
The $10 million payment for the nearly completed 2019/20 delivery year will be clawed back from other LSEs in the ComEd LDA. PJM said the final zonal credit rate for the ComEd zone was reduced to $2.34/MW-day from the initial rate of $3.43/MW-day per megawatt of unforced capacity obligation, a 32% cut. The resettlement will be included in the May invoices PJM expects to issue on June 5.
For the 2020/21 delivery year, the rate was reduced to $0/MW-day from 12 cents/MW-day. ICTR holders only receive revenues if the LDA in question is constrained in subsequent capacity auctions.
