By Christen Smith
VALLEY FORGE, Pa. — Load interests last week backed a joint proposal from PJM and the Independent Market Monitor that would strip capacity interconnection rights (CIRs) from generators seeking must-offer exceptions without a plan to become capable of meeting Capacity Performance requirements.
The Markets and Reliability Committee approved the proposal in a sector-weighted vote of 3.74 to 1.26 on Thursday, with unanimous support from both electric distributors and end-use customers. The two sectors shot down PJM’s original plan to take CIRs from resources after a three-year period of lost CP capability that was approved by 79% of the Market Implementation Committee in November, as well as an alternative from Exelon that would have allowed capacity resources to switch voluntarily to energy-only status and disallowed PJM to force such a switch.
The PJM-Monitor proposal requires existing capacity resources not offered in three consecutive auctions to change to energy-only status. A resource receiving a must-offer exception must also file a plan showing how it will become able to satisfy CP requirements in order to retain capacity status or else forfeit its CIRs. The requirement would be effective with the 2023/24 delivery year. Resources would be granted exceptions for no more than two auctions.
“The main motion would permit hoarding of CIRs inappropriately,” Monitor Joe Bowring said. “We continue to believe the compromise we worked out with PJM makes the most sense.”
The votes represent an about-face for stakeholders, who threw 61% support behind Exelon’s plan at the March 6 MIC meeting. Only 35% preferred the PJM-Monitor plan at the time. (See Showdown Set on PJM Must-offer Exceptions.)
“We realize the CIR issue has been very charged, but the conversation has lacked data and facts,” said Sharon Midgley, Exelon’s director of wholesale development. “The PJM-IMM proposal would create an unlevel playing field.”
Traditional generation owners balked at the notion that resources exempted from the must-offer requirement, including renewables, don’t face the same possibility of losing CIRs.
David “Scarp” Scarpignato of Calpine called the rules “discriminatory” and warned PJM of moving forward with the package, noting it would exacerbate problems in the future.
“PJM itself should be weary of putting forth a proposal like that,” he said. “I don’t think you are supposed to put forward discriminatory rules, and these are very discriminatory. This is a critical issue to us, and quite frankly it’s becoming more and more apparent in the stakeholder process that some resources get preferred treatment.”
Stu Bresler, PJM’s senior vice president of operations and markets, argued that the disparity is a result of the market rules created by stakeholders and ultimately approved by FERC.
Susan Bruce, representing the PJM Industrial Customer Coalition, suggested the MIC continue discussion about CIR inequities in future meetings. Staff agreed to review the original problem statement and issue charge for further Manual 18 revisions and return to the May 15 MIC meeting with a path forward. The PJM-Monitor proposal has not yet been scheduled for endorsement by the Members Committee.