VALLEY FORGE, Pa. — After a one-month delay, the PJM Market Implementation Committee on Wednesday endorsed two packages to update the RTO’s opportunity cost calculator.

The latest plan from Dominion Energy and Panda Power Funds would make what the sponsors called “modest improvements” to the calculator and include Manual 15 revisions so that it more closely resembles the Independent Market Monitor’s calculator that most stakeholders prefer using. Just under 84% of members voted in favor of the new package.

When polled on PJM’s package — which maintains the status quo but also makes minor clarifications in Manual 15 — 51% of stakeholders also approved. Both plans will advance to the Markets and Reliability Committee for consideration, with the Dominion/Panda proposal considered first.

Critically, Panda and Dominion withdrew three other proposals that were discussed at the August MIC meeting, including one that eliminated PJM’s calculator altogether. (See “Opportunity Cost Calculator Vote Delayed,” PJM MIC Briefs: Aug. 7, 2019.)

“We thought that this would be a good compromise,” Dominion’s Jim Davis said. “We worked with PJM to see what they would be willing to change in a timely fashion.”

Monitoring Analytics, however, disagreed that the latest changes made PJM’s calculator any more similar to its own and said that Manual 15 changes were unnecessary.

“We think these are modest changes, we agree with that, but this brings us a little closer to the IMM calculator and lets us just focus on further documentation of the IMM calculator,” Davis said.

Monitor: Review ARR/FTRs to Improve the Allocation of Congestion Rights

The Monitor told the MIC that the existing constructs for auction revenue rights and financial transmission rights leaves some load zones unable to sufficiently offset their congestion costs.

“There is a significant misalignment between congestion as it has been allocated and congestion as it has occurred,” said Howard Haas, chief economist for Monitoring Analytics. “Even if you were to claim all the rights made available to you, you cannot offset all off the congestion assigned to you.”

Existing rules generated a 91.8% rate of congestion offset recovery across all of PJM last year, but the rate varies wildly from zone to zone, Haas said. For example, Dayton Power & Light only offset 27.2% of its congestion costs, while Baltimore Gas and Electric offset 367.3% of its costs, despite producing significantly different amounts of congestion, according to the Monitor’s table.

Both PJM and stakeholders said they were generally supportive of exploring the issue, but some worried the problem statement and issue charge as presented were “too narrow.”

“I believe the GreenHat [Energy] report said we should take a comprehensive look at the FTR/ARR design,” said Exelon’s Sharon Midgley, noting that the Financial Risk Mitigation Senior Task Force is instead focusing on other credit and risk policies post-default. “This issue charge is leading towards a solution that is perhaps a little too narrow.”

Haas said that the key work activities listed in the issue charge provide appropriate room for that discussion. The deliverables would require stakeholders to identify the causes of congestion misalignment and decide whether changes to the market design could fix the problem.

“I would like to keep this more broad,” Midgley insisted. “All stakeholders might not necessarily share the same exact view on your description of the problem to be solved here.”

Other stakeholders agreed. Vitol’s Joe Wadsworth said he would like to see the rolling monthly auction option that PJM has presented at prior task force meetings added into the scope of the Monitor’s proposed review. The issue charge will be up for approval at the October MIC meeting.

Regulation Historic Performance Score

PJM presented revised Manual 11 language that would address a gap in missing historical performance scores used for regulation market clearing.

The MIC endorsed the manual changes in August, but at the MRC on Aug. 22, stakeholders took issue with the proposed value PJM would use when a system failure or other issue prevents the transfer of timely data.

The latest revisions will note that “if no historic performance scores are available from the last three days, then the latest available regulation qualification or regulation requalification test score for each resource by signal type is used.” A previous version indicated PJM would use a default value of 1 instead.