CEO Search Continues

VALLEY FORGE, Pa. — Neil Smith, chairman of PJM’s search committee and a member of its Board of Managers, told the Markets and Reliability Committee on Thursday that he anticipates former CEO Andy Ott’s position will be filled by the end of fall.

“We are focused on speed but not at expense of quality,” he said. “When we can share, we will.”

Ott retired June 30 and board member Susan J. Riley stepped into his role temporarily while the organization searched for a replacement. (See PJM CEO Andy Ott to Retire.)

Non-retail BTM Generation Rules Endorsed

Stakeholders unanimously endorsed revisions to Manuals 13 and 14D to clarify the reporting, netting and operational requirements of non-retail behind-the-meter generation (NRBTMG). In Manual 13, maximum generation emergency actions and deploy-all-resource actions are identified as triggers to load NRBTMG.

The endorsement follows a one-month deferral requested by Exelon in order to review applying the rules to community solar programs and aggregate net energy metering. Both PJM and Exelon told the Operating Committee on Sept. 10 that compromise language was close to being finalized, which excluded both types from reporting requirements. (See “Non-retail BTM Generation Update,” PJM OC Briefs: Sept. 10, 2019.)

PJM’s Terry Esterly said Thursday that staff added the revisions to Manual 14 Appendix D and Manual 28.

Stakeholders Urge Consensus on Load Management Testing Requirements

Stakeholders urged PJM and Enel X to reach a compromise on their dueling proposals to update load management testing requirements before a scheduled vote at the October MRC meeting.

“I would encourage both parties to find common ground and present one proposal,” said Adrien Ford of Old Dominion Electric Cooperative. “I think there’s been a lot of progress, and I’m just hoping we can see just a little more movement.”

The key differences between the two packages, endorsed at the Market Implementation Committee on Sept. 10, involve how much advance notice PJM provides to demand response resources before a test and procedures for retesting. (See PJM Stakeholders Support More Realistic DR Testing.) PJM wants testing procedures to more closely mimic reality and proposes a three-step notification system that gives resources first notice on the 21st of the month before, with additional alerts the day before and the morning before. Resources that fail would request a PJM-scheduled retest.

Enel X contends the month-ahead notification provides little useful information to resource owners who operate on a week-ahead timeline. It’s also uncertain how PJM will manage retests when new rules would test resources seasonally — an ambiguity the Enel X proposal attempts to clear up.

“If you want to do a retest, how will you have time in a season to do a retest?” said Brian Kauffman of Enel X. “Since that could really determine the compensation for resources in a year, it’s really important.”

Susan Bruce, of the PJM Industrial Customer Coalition, said the RTO’s proposal reads like a “gotcha test” to the companies she represents.

“We are not in a position to support PJM’s package,” she said, noting that consensus can still be reached. “I’m not looking to change testing for generators, but I note that there is an open-book test for generators, and there are many low-capacity-factor generators that similarly might not be operating a lot given our very healthy reserve margins.”

Pete Langbein, PJM’s manager of demand response operations, assured Bruce and others that that wasn’t staff’s intention.

“The idea was not to have a gotcha test,” he said. “We heard folks loud and clear, and what you have before you is dramatically different from what we started with. We agree it’s not fair” to test without advance notice.

Independent Market Monitor Joe Bowring said PJM’s package isn’t rigorous enough.

“It’s important to remember that demand response plays a critical role in PJM and a significant role in capacity markets. The PJM proposal is a very modest improvement, and of course you’d rather not have it because it imposes costs.

“While I appreciate your concerns, PJM’s proposal is at the extreme end of modes and should be a very basic requirement for ensuring that demand response is actually there when we need it,” he added.

If PJM and Enel X are unable to reach a compromise, the RTO’s package will be considered first by the MRC. Enel X’s proposal would only come to a vote if the PJM package fails to win approval.

Reserve Requirement Study Preliminary Results

PJM said preliminary results for its 2019 reserve requirement study lowered both the installed reserve margin (IRM) and forecast pool requirement (FPR), which will reset key parameters for the RTO’s upcoming capacity auctions.

Patricio Rocha Garrido, of PJM’s resource adequacy planning department, said the 2019 capacity model, the 2019 load model and the 2019 capacity benefit of ties (CBOT) drove the nearly 1% decrease in IRM, though the capacity model didn’t impact the lowered FPR.

The final report will be distributed Oct. 8 and include recommended IRM and FPR for delivery years 2020/21 through 2023/24.

Manual 34 Changes

The MRC and Members Committee also approved by acclimation changes to Manual 34: PJM Stakeholder Process addressing the prioritization of issues and creating an alternative path for critical, time-sensitive issues. The changes are also intended to ensure transparency throughout the process. (See New Rules to Give PJM Members More Time on Issues.)

The MRC also endorsed changes to the following manuals:

• Manual 11: Energy & Ancillary Services. The revisions document the procedure for addressing missing historical performance scores in the regulation market and clarify that the reserve requirements used in the market clearing process are based on the largest single contingencies that are communicated by PJM Operations and modeled in the markets clearing software.
• Manual 15: Cost Development Guidelines. To comply with FERC Order 841, changes were made to language on hydro resources and flywheels. Definitions were added for efficiency factor, fuel cost, variable operations and maintenance (VOM) and ancillary service costs. It was also approved by the Members Committee.
• Manual 27: Open Access Transmission Tariff Accounting and Manual 28: Operating Agreement Accounting. The changes, required to comply with FERC Order 841, detail PJM settlement procedures for “charging energy,” which is purchased by energy storage resources for later resale. Charging energy is always billed at the applicable LMP, but different categories of charging energy are subject to different sets of charges. They include “direct charging energy” — power purchased by a storage resource from the PJM energy market for later resales to the market or is lost to conversion inefficiencies — and “load-serving charging energy,” which is purchased from the energy market and stored for later resale to end-use load.

– Christen Smith