By Amanda Durish Cook

PJM has again moved to dismiss Potomac Economics’ complaint against its pseudo-tie construct, citing a recent court ruling that describes a limited role of RTO/ISO market monitors in legal proceedings.

MISO’s Independent Market Monitor filed a Section 206 complaint in April 2017 asking FERC to eliminate PJM’s existing pseudo-tie definition, claiming that the increasing use of pseudo-ties degrades reliability, hampers efficient dispatch and raises costs. (See Pseudo-Tie Feud Rises as Patton, NYISO Protest PJM Proposal.)

PJM is pointing to a June 15 D.C. Circuit Court of Appeals ruling that confirms FERC’s 2017 decision that Old Dominion Electric Cooperative cannot recover its operating costs incurred in excess of its filed rate during 2014’s polar vortex. The commission said such a move would constitute retroactive ratemaking (16-1111).

In its June 19 filing in the pseudo-tie complaint (EL17-62), PJM said the ODEC decision importantly included a denial of its own Independent Market Monitor’s motion to intervene. PJM said the court’s opinion shows that “a market monitor does not have standing to intervene in a proceeding on judicial review of commission orders” and that the case is “instructive” in its motion to dismiss the MISO Monitor’s complaint. PJM asked FERC to consider the precedent in its upcoming decision.

The court said that the PJM Monitor “has no legally cognizable interest” in the ODEC case and denied its motion to intervene.

The Monitor’s role, the court said, “is much in the nature of an auditor — it is largely confined to observing the market’s operations and then offering recommendations to PJM. The Monitor has no authority to enforce or to interpret the PJM [Operating] Agreement or Tariff, to direct changes in the market’s operations, to alter market rules or to police individual members’ compliance.”

The court added that “other than making some regulatory filings,” the Monitor is confined to informing FERC, other government agencies and RTO participating members “if it disagrees with PJM’s implementation of the market rules or operation of the PJM market.”

“Beyond its contractually assigned tasks, the Monitor has no independent legal interest of its own in the PJM markets,” the court determined. It characterized the PJM Monitor as “an outside observer hired to study and report objectively on the market’s operations … not a creature of statute, and operates under no affirmative duty imposed by public law.”

PJM originally asked FERC to dismiss the complaint last May on the grounds that Potomac “lacks the capacity by statute, order, contract or tariff to bring such a complaint in its role as an independent market monitor against PJM.”