PJM deferred a vote until December on packages dealing with the contentious black start unit testing and compensation issue as stakeholders also delayed a vote on a proposed change of the issue charge approved earlier this year.

Paul Sotkiewicz of E-Cube Policy Associates made a motion for stakeholders to adopt proposed amendments to the black start unit issue charge during its first read at last week’s Operating Committee meeting. The black start issue has been lingering for months, leading to heated discussions. (See Gen Owners Balk at Change to PJM Black Start Rates.)

The proposed issue charge language said, “Current black start units receiving the capital cost recovery rate (Schedule 6A) and units already awarded in recent black start [requests for proposals] will continue with the commitment period and capital recovery factor (CRF) rates as documented in the current Open Access Transmission Tariff.”

Sotkiewicz said the black start problem statement passed at the May OC meeting has identical language in a footnote added to the black start CRF section indicating that PJM will not retrospectively make changes in the CRF and compensation. (See “Black Start Issue Charge Endorsed,” PJM Operating Committee Briefs: May 14, 2020.) Sotkiewicz said the idea was to have the black start issue charge reflect the language in the problem statement.

“We would like to make this change to the issue charge and bring this up for a vote at the committee so that we can move forward with a rational discussion of black start,” Sotkiewicz said.

The issue over the language emerged when stakeholders discovered the issue statement, which is officially voted on for endorsement as codified in Manual 34, did not include the footnote, leaving the application of CRF rates up to interpretation in the proposed black start packages.

The Independent Market Monitor’s package calls for updated CRF rates to apply to new and existing black start units. Updated commitment periods would also apply to new and existing black start units.

Sharon Midgley of Exelon seconded Sotkiewicz’s motion to adopt the updated issue charge language. Midgley said black start service is critical to reliability, and proposals retroactively changing the outcomes of an RFP process that has already been conducted “should not be entertained by this committee.”

Midgley said the updated issue charge was meant to codify what Exelon believed was the initial intent of the black start work effort when it was endorsed in May.

Monitor Joe Bowring said the issue charge language presented by Sotkiewicz read as a proposed solution and not an issue. Bowring questioned whether the language fit under the definition of an issue charge and if it was appropriate to retroactively change an issue charge.

PJM’s Darlene Phillips, chair of the OC, said she did not consider the updated issue charge language to be a solution and that it deals with the scope of the issue charge. Phillips said stakeholders can make a motion to modify an issue charge and believed the status of the black start issue is “in good standing in accordance with the process” to officially update it.

Stakeholder Debate

Greg Poulos, executive director of the Consumer Advocates of the PJM States, said it seemed like the updated issue charge was “curtailing discussion” among stakeholders regarding the proposed black start packages. Poulos said a first read would be helpful so that he could discuss the implication of the language with the advocates instead of passing it on the same way.

“If Supply, which has the majority vote, decides that they’re going to ram this thing through, it’s hard to want to do a further discussion on this,” Poulos said.

Sotkiewicz said he took exception with Poulos’s characterization that the issue charge was being “rammed through” the stakeholder process. He said the problem statement was very clear that updated CRF rates would only apply to new black start units.

Sotkiewicz said the issue charge language was not taking off the table the idea that CRFs can be adjusted on a forward-looking basis in the black start packages. But he said that because the black start RFP has already been conducted and units are already in service, to make retroactive changes “flies in the face” of what is conducted in other PJM markets where changes have always been prospective and not retrospective.

“Now we have a reputational problem, and who’s going to want to put their resources forward in the next black start RFP?” Sotkiewicz said. “It’s only going to increase cost for load.”

David Mabry of the PJM Industrial Customer Coalition made a motion to defer the vote on the updated issue charge until December. Mabry said there have been some discussions with stakeholders in attempting to understand the issues from both sides, and by deferring the issue charge for a month could allow time to craft a compromise.

“Clearly there are two sides at this point, and both had a different understanding of what the scope of the initiative was,” Mabry said.

Phillips told stakeholders that a vote deferral on the issue charge would effectively push back the overall voting on the black start packages until the December OC meeting.

“We don’t want to vote on packages when the issue charge is still up in the air,” Phillips said.

Stakeholders ultimately voted to defer consideration of the amended issue charge until the December OC meeting, passing the measure with 58% in favor, including 132 “yes” votes.

Sotkiewicz said he has yet to have a stakeholder identify a retroactive action in PJM markets similar to what is being discussed with black start CRF.

“I think this sets a really bad precedent overall for PJM in terms of governance and people’s interests,” Sotkiewicz said.