FERC Grants PJM Waiver of MOPR Exemption Deadlines

Jan 25, 2018

Some PJM generators will have additional time to submit unit-specific exemptions to the MOPR before the RTO’s capacity auction next month.

By Robert Mullin

Some PJM generators will have additional time to submit unit-specific exemptions to the minimum offer price rule (MOPR) before the RTO’s capacity auction next month under a Tariff waiver approved by FERC on Monday.

The decision (ER18-489) comes a month after the commission for a second time again rejected PJM’s 2012 MOPR compromise, which would have permitted categorical exemptions to the price rule (ER13-535-004). FERC had ruled that it was unreasonable for PJM to remove unit-specific exemptions and also directed the RTO to eliminate the proposed categorical exemptions. (See On Remand, FERC Rejects PJM MOPR Compromise.)

The commission issued last month’s order on remand after the D.C. Circuit Court of Appeals last July found FERC had overstepped its “passive and reactive role” in undoing the compromise and suggesting the inclusion of unit-specific exemptions to the MOPR, which PJM had adopted in a compliance filing. (See PJM MOPR Order Reversed; FERC Overstepped, Court Says.)

In response to the December ruling, PJM asked for a one-time waiver of a Tariff provision that requires sellers to apply for unit-specific MOPR exemptions 135 days in advance of the third 2018/19 Incremental Auction slated for Feb. 26. Unsure of the outcome of FERC’s remand order, some sellers preparing for the auction opted last October to apply for the categorical exemptions — leaving them outside the deadline for seeking unit-specific exceptions once the commission had rejected PJM’s proposed rules.

The timing of the remand order also meant that Tariff-based deadlines had slipped for PJM and its Independent Market Monitor to provide a seller their respective determinations on the unit-specific request — and for the seller to commit to an offer price.

“As a result of these already-passed or plainly impracticable deadlines, parties that reasonably relied on the categorical exemptions, but that could also qualify for a unit-specific exception, would be barred by the current Tariff deadlines from submitting justifiably competitive offers in the auction,” PJM wrote in its Dec. 20 waiver request.

“Without waiver, resources that followed the then-effective Tariff language would be unfairly penalized for simply adhering to the Tariff,” the commission wrote in granting the request. “PJM’s waiver request remedies the timing conflict between the remand order and the effective Tariff rules, thus allowing these affected resources to submit unit-specific review requests.”

FERC rejected LS Power’s request to broaden the scope of the waiver to include generating resources that had not applied for categorical exemptions by the October 2017 deadline. The company contended that some of its affiliates had only recently acquired some new resources “or faced uncertainties regarding interconnection service for those resources,” the commission noted.

PJM FERC waiver LS Power MOPR exemption — FERC rejected LS Power’s bid to extend PJM’s original MOPR exemption waiver request to accommodate plants the company had acquired late last year, such as the Ironwood Plant above | *TransCanada*

“LS Power does not explain why expanding the scope to entities that were not affected by the timing of the remand order is justified. Accordingly, we grant PJM’s waiver request and reject LS Power’s request to expand it,” the commission said.

The waiver sets these one-time deadlines to remedy the issue:

Jan. 12: Deadline for markets sellers that had submitted categorical exemption requests to submit a unit-specific request;
Feb. 2 (Monitor) and Feb. 16 (PJM): Deadlines for proposed determinations on the exemption request; and
Feb. 22: Deadline for the seller to provide its commitment on a unit-specific offer price.

Capacity Market PJM