Markets and Reliability Committee
Emerging Technologies Forum
Stakeholders unanimously endorsed the charter for the new PJM Emerging Technologies Forum at Thursday’s Markets and Reliability Committee meeting.
Eric Hsia of PJM reviewed the charter, saying significant changes were made after some stakeholders expressed concerns with adding another subcommittee to the schedule. The subcommittee was instead changed to a forum with no formal decision-making role. (See “Emerging Technologies Subcommittee Proposed,” PJM MRC Briefs: April 30, 2020.)
Hsia said the forum is designed to keep stakeholders abreast of technology pilot programs PJM is seeking to implement and to facilitate discussions with technology providers. It will work to ensure transparency through a periodic review of the advanced technology pilot program, Hsia said, and continue fostering collaboration with technology providers and stakeholders.
The forum will not make selections of pilot projects and programs, Hsia said, with PJM maintaining management over the selection. Hsia said no official votes on issues will be made at the forum, but members will be able to conduct nonbinding votes and make recommendations that stop short of creating and voting on solution packages.
The group is currently targeted to meet monthly, with the first forum expected in August.
Greg Poulos, executive director of the Consumer Advocates of the PJM States, expressed support for the forum and urged PJM staff to consider cost-benefit analyses in discussing projects. He said costs are one of the primary concerns of consumer advocates when discussing new initiatives.
Adrien Ford of Old Dominion Electric Cooperative said the changes made to the charter by PJM after stakeholder feedback have made it a stronger and more focused group.
Stakeholder Group Sunsets
Members unanimously endorsed sunsetting seven stakeholder groups that PJM staff said had achieved their original goals.
Dave Anders of PJM said stakeholder feedback resulted in modifications to the original list introduced at the May MRC meeting. (See “Task Force Sunset,” PJM MRC Briefs: May 28, 2020.)
Anders said the Modeling Generation Senior Task Force was struck from the sunset list. The task force met on June 10, Anders said, and members at the meeting expressed support for continuing to meet as needed to provide guidance and feedback.
The other suggested change based on feedback was to keep the Energy Price Formation Senior Task Force, Anders said. Although FERC last month approved PJM’s proposed energy price formation revisions, several members thought additional commission guidance could be received that will require more work related to the task force’s charter, he said.
FERC ordered PJM to submit a compliance filing in 45 days modifying the capacity market’s energy and ancillary services offset to reflect the additional revenues resources will receive under the new rules. (See FERC Approves PJM Reserve Market Overhaul.)
The groups being sunset are the:
- Generator Offer Flexibility Senior Task Force, which last met November 2015;
- Energy Market Uplift Senior Task Force, which last met March 2017;
- Incremental Auction Senior Task Force, which last met January 2018;
- Summer Only Demand Response Senior Task Force, which last met September 2018;
- Primary Frequency Response Senior Task Force, which last met December 2018 (PJM provided a separate presentation on the work of the task force.);
- Distributed Energy Resources Subcommittee (DERS), which last met in May; and
- Intermittent Resources Subcommittee (IRS), which last met in March.
Erik Heinle, of the D.C. Office of the People’s Counsel, asked for clarification regarding the two subcommittees on the list, the DERS and IRS.
Anders said the intention is to form a new subcommittee, the Distributed Energy Resource and Inverter-based Resources Subcommittee (DIRS), combining the scope of work of the two groups. Anders said DIRS will report to the Market Implementation Committee, which is set to approve its charter at the July 8 meeting.
5-Minute Dispatch and Pricing
Debate continued on PJM’s proposal to improve coordination of its five-minute dispatch and pricing during a first read of the Operating Agreement and manual language changes.
Adam Keech of PJM presented the highlights of the package, which calls for “work streams”: short-term market changes to address pricing alignment; “enhancements and clarifications” to LMP verification; intermediate operational changes to implement more “regimented” real-time security-constrained economic dispatch (RT SCED) case approvals; and long-term operational changes to investigate changing SCED timing and consider previous dispatch instructions.
The RTO’s proposal will be voted on at the July MRC and Members Committee meetings. Pending FERC approval, implementation is tentatively slated for October.
The measure was endorsed nearly unanimously at the MIC meeting. (See PJM 5-Minute Dispatch Proposal Endorsed.)
Keech said PJM decided to break the process up into short-term, intermediate and long-term efforts based on how quickly they could be implemented.
PJM’s proposed short-term fixes would align the locational price calculator (LPC) to use the reference RT SCED case for the same target time. The LPC would calculate prices for the interval from 11:55 a.m. to 12 p.m. ET using the RT SCED solution for a 12 p.m. target time.
Much of the debate has centered on stakeholders’ desire to implement long-term dispatch changes along with the short-term and intermediate changes.
Keech said PJM is dedicated to working with stakeholders on the long-term changes and determining if there are formulation changes needed for dispatch by doing side-by-side comparisons with the different dispatch methods used at MISO, SPP, CAISO and ERCOT. PJM is proposing holding the long-term discussion as a working issue at the MIC with reports provided to the Operating Committee, Keech said. Detailed discussions could start at the MIC by September.
Ford said she was glad PJM is committing to look at long-term solutions and suggested making the discussions a special session of the MIC because of the education needed to understand the concepts.
“September sounds as good a time as any to start so that we’re not waiting too long,” Ford said.
Paul Sotkiewicz of E-Cubed Policy Associates said PJM’s short-term proposal and the process moving forward on long-term issues are “eminently reasonable.” He said the point of stakeholder discussions are to get to a place where PJM is using the most up-to-date information possible, making dispatch and pricing more reflective of conditions.
Keech said PJM is looking forward to engaging with stakeholders on the discussions and solutions.
“I can assure you and the entire stakeholder community that we are committed to continuously getting better,” Keech said.
Members Committee
PMA Credit Requirements
Stakeholders unanimously endorsed Tariff revisions related to peak market activity (PMA) credit requirements to address a regulatory change in Ohio concerning the billing of network integration transmission service (NITS). The change was endorsed through acclamation, with one abstention.
Bridgid Cummings of PJM reviewed the revisions.
In 2015, the Public Utilities Commission of Ohio moved NITS and other related charges to a non-bypassable rider that is the responsibility of the electric distribution company. The change means competitive retail electric suppliers serving load in Ohio are no longer allowed to collect NITS or any other transmission-related charges from end-use customers.
PJM requires load-serving entities to sign NITS agreements and post collateral based on their PMA and gives itself the ability to make changes to a participant’s PMA requirement when the RTO determines the PMA is not representative of expected activity. (See “‘Quick Fix’ on PMA Credit Requirements,” PJM MIC Briefs: April 15, 2020.)
Surety Bonds as Collateral
Members endorsed Tariff revisions to approve surety bonds as a form of collateral. The revisions passed with three objections and three abstentions in the consent agenda portion of the meeting.
The proposal allows the use of surety bonds as collateral for all market purposes except financial transmission rights, with a $10 million cap per issuer for each member and a $50 million aggregate cap per issuer.
PJM said it will require the use of bond companies on the U.S. Treasury Department’s certified list and a minimum credit rating of A with S&P Global Ratings, Fitch Ratings and AM Best, or A2 with Moody’s Investors Service. PJM also will require one-day payment demand terms.