WILMINGTON (April 25, 2013) – PJM announced today it is negotiating a new contract with its independent market monitor, Monitoring Analytics LLC, dropping plans to put the contract out for bid.
PJM General Counsel Vince Duane told the Markets and Reliability Committee that the RTO and Monitoring Analytics have agreed to extend the company’s current contract — due to expire in mid-2014 — through the end of next year.
Duane said PJM would issue a request for proposals (RFP) for monitoring services only if it cannot reach agreement with Monitoring Analytics on a new three-year contract beginning in 2015. Such an impasse “doesn’t seem terribly likely,” Duane said.
Duane said the PJM board made the decision to renew the Monitoring Analytics contract in the interests of “continuity” after receiving feedback from stakeholders.
In March, state regulators, industrial consumers and cooperatives sent the PJM board letters protesting its draft RFP, saying it contained terms that would undermine the independence and quality of the monitoring function.
Duane said yesterday that the new contract would include “reasonable measures” for the board to exercise oversight ensuring the monitor’s “accountability.” Duane promised to update members on the status of negotiations within two months, adding, “What we’d ask for at this time is some breathing room.”
Jeff Mayes, general counsel of Monitoring Analytics, said the company was confident that the two parties would reach agreement.
“We recognize the board’s important role in promoting an independent and capable monitoring function,” Mayes said in a statement. “We appreciate the board’s interest in fulfilling its responsibilities related to market monitoring under the tariff and FERC (Federal Energy Regulatory Commission) rules.”
A new contract with the monitoring firm would allow the board to avert another showdown with stakeholders over the monitor’s role.
Monitoring Analytics is headed by Joseph Bowring, a Ph.D. economist who has served as PJM’s market monitor since 1999. In April 2007, Bowring sparked a firestorm at a FERC technical conference when he accused then-PJM President Phil Harris and his allies of attempting to muzzle him by squelching his reports and cutting his budget.
Under the terms of a settlement approved by FERC, Bowring formed Monitoring Analytics to create an independent monitoring function (EL07-56-000) and was awarded a six-year contract.
