By Amanda Durish Cook

MISO and PJM this week challenged the contention by MISO’s Independent Market Monitor that PJM’s two long-term market-to-market errors have cost MISO millions, calling the financial impacts “minimal.”

In a document circulated this week, the RTOs said their analysis found the potential joint operating agreement settlement impacts associated with the flowgates amounted to less than $100,000, and that they considered the two issues resolved.

For more than a decade, PJM had been overstating its own transmission loading relief (TLR) because of a calculation error and since 2009 had failed to order mandated tests required to define M2M constraints between the two RTOs.

Late last year, MISO Monitor David Patton said that PJM had knowingly violated the JOA, likely costing MISO millions of dollars. (See MISO Board, Monitor Seek Response to PJM M2M Missteps.)

But the RTOs said a joint investigation of the errors found “there was minimal and/or undeterminable impact,” although PJM admitted that the TLR error did constitute a JOA violation.

Only 2 Flowgates

Based on after-the-fact analysis, the RTOs said “only two potential flowgates requested by MISO for testing” may have qualified for the neglected tests to define M2M constraints.

However, the RTOs acknowledged — as did the MISO Monitor late last year — that the actual impacts of the missed tests are difficult to quantify.

“System conditions that represent the two potential flowgates cannot be fully duplicated and, therefore, the actual impacts, if any, of these two flowgates cannot be confirmed. However, the estimated PJM impact was minimal. … Because of the minimal impact, PJM and MISO consider this investigation closed at this time,” the RTOs said.

PJM added that it does not believe that it committed any JOA violations by overlooking the test.

But Patton said PJM did not study a long enough period to accurately estimate impacts stemming from the neglected test.

“Whether the impacts are large or small is an empirical question,” Patton said in a statement to RTO Insider. “PJM studied only a little more than a year even though they had not performed [the test] ever since the JOA with MISO was implemented. The impacts may well have been small in the period PJM studied but could have been larger in other periods.”

Patton also said he and his staff continue to be “confident” that the failure to perform the test was a known violation of both PJM’s Tariff and the JOA.

“Regardless of the effects of the violation, this raises questions regarding the culture of compliance at PJM,” Patton said.

FERC Report over TLR Issue

PJM said that “an incorrect line of code” was to blame for its underreporting of available market flow during certain TLR events. In that case, PJM acknowledged that it violated the congestion management agreement section of the JOA. PJM said it self-reported to FERC over the issue.

“PJM is also conducting an internal apparent cause analysis for the event in order to determine root causes, develop recommendations and implement process updates designed to help avoid a reoccurrence,” the RTOs said.

Similar to the test error, PJM and MISO said the overstatement of TLR “cannot be retroactively determined” and that the JOA does not provide guidance on resettlement opportunities related to TLR activities.

“Importantly, system operations aligned with prices,” the RTOs said.

During a May 30 Joint and Common Markets meeting, executives from both RTOs said they considered the matter closed because of their minimal impacts.

“We’ve made sure the issues are corrected going forward,” said Ron Arness, MISO seams management expert.

But Patton again said MISO and PJM could not determine the size of the impacts with any certainty.

“We believe the second issue likely had sizable adverse effects over almost a decade on MISO, its customers, and others obligated to respond to TLRs. PJM does not suggest that these effects are small, just that they are indeterminable,” Patton said.

He added that it was “unfortunate” for those affected by the longstanding error that the JOA does not provide a remedy for such situations.