By Rory D. Sweeney

VALLEY FORGE, Pa. — PJM staff moved briskly through a dense agenda during Friday’s meeting of the Energy Price Formation Senior Task Force (EPFSTF) in hopes of wrapping up the wide-ranging, yearlong initiative by a Jan. 31 deadline set last week by the Board of Managers.

The dramatic debates that often attend PJM stakeholder meetings were largely kept in check, although several stakeholders shared their reactions to the deadline at the meeting, the task force’s first since the board published a letter issuing it.

The board said it saw need for six revisions to how the RTO sets prices in its energy market and that if stakeholders haven’t endorsed plans to address the six needs by Jan. 31, it will direct PJM staff to unilaterally file a plan for FERC approval. (See PJM Board Demands Action on Energy Price Formation.)

Susan Bruce, who represents the PJM Industrial Customer Coalition, said the board appeared to feel stakeholders weren’t making progress on the issues, even though the RTO had recently made large-scale revisions to its proposal and stakeholders made it clear a vote was coming soon.

“I was left with the impression [from the letter] that stakeholders couldn’t get their act together to get a vote,” she said. “I’m concerned about the perception of the board about what was happening, which has been good work at the EPFSTF. … I think it doesn’t fully appreciate the work that been done.”

PJM’s Dave Anders assured attendees that the board was apprised of all of the task force’s activity.

Other stakeholders expressed skepticism that the task force can comprehensively address the six revisions demanded, particularly because two of them have yet to receive any discussion.

Carl Johnson, who represents the PJM Public Power Coalition, said aligning market-based reserve products in day-ahead and real-time energy markets was “the one thing I said at the beginning that I wanted to come out of this process … so that’s great.”

But a “piecemeal” approach of endorsing solutions for any of the six that stakeholders can agree on — which the board indicated it would accept — “doesn’t work,” he added. “I do not see how we can pull all of this together. I think the time frame is pretty unrealistic.”

However, staff were confident that the timing is achievable. PJM’s Adam Keech said the other as-yet-unaddressed revision — increasing operating reserve demand curve (ORDC) penalty factors to ensure utilization of all supply prior to a reserve shortage — is a relatively “straightforward” extension of what’s already been discussed.

Catherine Tyler with PJM’s Independent Market Monitor questioned whether there is evidence for what the grid needs to respond to stress events like the polar vortex and bomb cyclone cold snaps.

Keech pointed to reports staff produced on the RTO’s performance during both of those events.

“I don’t agree with the statement that there’s been no analysis on stressed system events,” he said, adding that the board saw all the documentation it needed to see “to come to the conclusion they’ve come to.”

Anders added that he’s “absolutely sure” the board has reviewed those documents.

Gabel Associates’ Mike Borgatti and Erik Heinle with the D.C. Office of the People’s Counsel struck more upbeat tones with their comments. Heinle was optimistic that the differing sides were not too far apart. Borgatti called the deadline “a healthy step in the process” as the sides may never get to agreement.

Any FERC filing would come after the board’s next meeting, scheduled for Feb. 11.

PJM Proposal

Keech and PJM’s Lisa Morelli described staff’s proposal for the six revisions. Though stakeholders indicated concerns, staff continued to move through a presentation in an attempt to fully describe the plan, which was published on Dec. 11, six days after the board’s letter and three days before the task force meeting.

PJM’s Anthony Giacomoni also presented the results of an analysis that stakeholders requested at the task force’s previous meeting. The study simulated energy, reserve and uplift impacts of including the regulation requirement in the ORDC, first using the current two-step curve and then the proposed reserve-market revisions. The study, which covered June 1, 2017, through May 31, 2018, found that, at its most extreme, net costs would be reduced by $350 million, with a $1.92 billion increase in energy and reserve market revenues offset by a $1.5 billion cut in capacity market revenue and a $770 million drop in retail rate costs to load.