Below is a summary of the issues scheduled to be brought to a vote at the PJM Markets and Reliability and Members committees on Thursday. Each item is listed by agenda number, description and projected time of discussion, followed by a summary of the issue and links to prior coverage in RTO Insider.

RTO Insider will be in Valley Forge, Pa., covering the discussions and votes. See next Tuesday’s newsletter for a full report.

Consent Agenda (9:10-9:20)

Members will be asked to endorse the following manual revisions:

B. Manual 11: Energy & Ancillary Services Market Operations: Reflects the addition of location fields in DR Hub.

C. Manual 11: Energy & Ancillary Services Market Operations: Part of the biennial review.

D. Manual 21: Rules & Procedures for Determination of Generating Capability: Related to generator testing, excluding PJM’s proposed effective load-carrying capability calculation deferred for endorsement until the May MRC meeting.

E. PJM Regional Business Practices: Document associated with the new OASIS application.

1. Must-offer Exception Process (9:20-9:35)

Stakeholders will decide whether to grant PJM authority to force capacity resources into energy-only status for failing to meet Capacity Performance requirements.

Members will first consider revised must-offer rules approved by a 79% vote of the Market Implementation Committee in November. They would require existing capacity resources not offered in three consecutive auctions to change to energy-only status. Capacity interconnection rights (CIRs) of such resources would be terminated one year from the switch to energy-only, unless the rights holder submits a new generation interconnection request within that year using those same CIRs.

If the first proposal fails to clear the two-thirds sector-weighted threshold, members will vote on an Exelon proposal that received a 61% MIC vote in March. It would allow capacity resources to voluntarily switch to energy-only status but would not allow PJM to force a switch. Eighty-five percent also said they preferred the Exelon rules over the November proposal. (See Showdown Set on PJM Must–Offer Exceptions.)

Both proposals, which would require changes to Manual 18 and the Tariff, received first reads at the March 21 MRC meeting.

4. Carbon Pricing Problem Statement/Issue Charge (10:00-10:20)

Stakeholders will vote on a problem statement and issue charge to consider carbon pricing in PJM’s 13-state territory, an initiative that received largely supportive statements from members at the March 25 MRC. (See PJM Members Welcome Carbon Pricing Talks.)

Michael Borgatti of Gabel Associates presented a first read of a problem statement and issue charge at the MRC last month that would task stakeholders with creating rules to address carbon leakage and help states meet greenhouse gas reduction policies. Borgatti made the presentation on behalf of the Independent Energy Producers of New Jersey, which includes NextEra Energy and PSEG Power.

5. Surety Bonds (10:35-10:50)

The MRC will consider two proposals to allow surety bonds as an additional form of collateral.

The first proposal members will vote on would allow surety bonds as collateral for all market purposes except financial transmission rights, with a $10 million cap per issuer for each member and a $50 million aggregate cap per issuer. It won 61% of stakeholder support at the Credit Subcommittee and the MIC.

If the first proposal fails to win a two-thirds weighted vote, members will consider Exelon’s alternative plan, which would allow surety bonds as collateral for FTRs and other market purposes, with a $20 million cap per issuer for each member and a $100 million aggregate cap per issuer. (See “Surety Bonds,” PJM MRC/MC Briefs: Dec. 6, 2018.)

Exelon’s proposal earned 53% support at the subcommittee and 58% support at the MIC. The company had asked to delay the vote on the issue until the Board of Managers’ report on the GreenHat Energy FTR default, which was released last month. (See Report: ‘Naive’ PJM Underestimated GreenHat Risks.)

6. Manual 14B Amendments

LS Power’s Sharon Segner is expected to seek another 60-day delay on a vote on her company’s proposal to amend Manual 14B: Regional Transmission Planning Process. The proposal would add language that a transmission owner’s supplemental project “will generally be removed from” the Regional Transmission Expansion Plan following a final order by a state siting agency rejecting the project. Supplemental projects are proposed by TOs and are not required for compliance with PJM’s reliability, operational performance or economic criteria.

Aaron Berner, PJM manager of transmission planning, told the Planning Committee on April 11 that stakeholders agreed to another deferral after conducting two educational sessions last month to discuss how projects are removed from the RTEP. (See “LS Power Will Seek 2nd Deferral on Transmission Replacement Language,” PJM PC/TEAC Briefs: April 11, 2019.)

7. Financial Risk Management Senior Task Force Charter (10:50-11:20)

Stakeholders will consider a charter to form a Financial Risk Management Senior Task Force in the wake of the GreenHat default.

PJM suggested assembling the task force as soon as May 2 to begin the overhaul of credit and risk management rules, market design, membership qualifications and processes, and the stakeholder process itself.

The task force is a response to a board-commissioned investigation that found RTO officials were slow to realize the risk posed by GreenHat and did not respond quickly to warnings by other market participants. PJM CEO Andy Ott said the default indicated a need to revise the RTO’s stakeholder process. He said he has developed “an action plan to strengthen the PJM organization and improve our processes and communication.” (See “Financial Risk Management Task Force Proposed After GreenHat Report,” PJM MIC Briefs: April 10, 2019.)

– Christen Smith