By Rich Heidorn Jr.

FERC on Thursday rejected a complaint by MISO’s Independent Market Monitor that PJM’s pseudo-tie requirement for external capacity resources is unjust and unreasonable (EL17-62).

Before instituting the pseudo-tie requirement in 2014, PJM required only that external capacity resources maintain firm transportation to its border. But that left PJM vulnerable to having such resources curtailed under NERC’s Level 5 transmission loading relief (TLR-5) procedures, spelled out in reliability standard IRO-006-5.

A pseudo-tied resource is physically located in one balancing authority area (BAA) but treated electrically as if it were in another BAA. Such resources are not subject to TLR-5 curtailments because they are not tagged as interchange transactions.

MISO’s IMM, Potomac Economics, complained that PJM’s pseudo-tie requirement imposes economic costs on MISO, threatens reliability and unnecessarily restricts the ability of external resources to participate in the PJM capacity market.

But the commission said Potomac’s “dispatch inefficiency analysis” did not prove its case. “Not only does Potomac’s analysis suffer from analytic flaws … but its underlying premise merely presents an alternative way to accommodate external resources,” the commission said. “Potomac’s arguments here fail to recognize that, under PJM’s approach, MISO must consent to a pseudo-tie, so MISO could refuse to provide consent in circumstances where it believes the pseudo-tie would be too detrimental to the MISO system.”

FERC also said Potomac’s congestion cost analysis was deficient because it included only total congestion cost numbers between PJM and MISO and did not identify how much congestion is attributable to pseudo-ties versus normal system operations.

Potomac also failed to prove that instances it described where constraint limits were exceeded by 40% were attributable to pseudo-tied resources because it did not include any details of these incidents in its complaint, the commission said.

FERC also noted that it has approved several enhancements filed by PJM and MISO to address modeling and coordination issues since Potomac filed the complaint in 2017. “These solutions address the very issues raised by Potomac in this complaint,” it said.

“To the extent a pseudo-tied resource from MISO into PJM compromises reliability in MISO, MISO can — and should — modify its rules or take other steps to address those concerns, e.g., suspending or terminating the pseudo-tie consistent with the PJM-MISO” Joint Operating Agreement, FERC said.

NYISO

The commission also dismissed as speculative Potomac’s similar complaints about the impact of pseudo-ties on NYISO, where it also serves as Monitor.

Potomac said the policy could be worse for NYISO, whose system is more congested than MISO’s. But while MISO’s pseudo-tied resources into PJM increased from about 155 MW in June 2015 to 2,160 MW in June 2017, NYISO does not have any resources pseudo-tied with PJM.

“Moreover, under PJM’s Tariff, NYISO must agree to any pseudo-tie, at which point NYISO can address any issues with particular generation units that seek to pseudo-tie to PJM,” it said. “If in the future, an external generator seeks to pseudo-tie from NYISO into PJM, we expect that the two regions could develop a mutual agreement for the NYISO-PJM JOA, similar to what MISO and PJM have done, and file it with the commission.”

Standing

FERC did rule in Potomac’s favor on one point, rejecting PJM’s claim that the Monitor lacked standing to demand market design changes in a market it does not monitor. (See PJM: MISO Monitor Lacks Standing in Pseudo-tie Complaint.)

The commission said the Federal Power Act allows “any person” to file a complaint under Section 206 if it makes “a good faith effort to quantify the financial impact or burden” from the rule it seeks to change.

“Our holding in this regard is based on the specific facts of this proceeding, i.e. that Potomac’s complaint is directed to a PJM requirement that Potomac asserts has a direct adverse effect on the operation and efficiency of the markets where Potomac serves as the Market Monitor,” FERC said. “We do not make any holding here as to whether a Market Monitor would satisfy the [financial impact] requirements … if it does not allege such direct effects when filing a complaint regarding markets where it does not serve as the Market Monitor.”