The Market Implementation Committee gave preliminary approval Wednesday to two proposals for lowering the risk of FTR revenue shortfalls.
The two proposals from the Financial Transmission Rights Task Force (FTRTF) received near-unanimous support, while a third option failed with less than 40% support and a vote on a fourth option was postponed.
All of the proposals were designed to eliminate modeling differences between the energy and Financial Transmission Rights (FTR) markets that contribute to FTR funding shortfalls.
The two proposals approved for consideration by the Markets and Reliability Committee reduce or remove infeasibilities in the FTR model and may allow increased counter flow FTRs to clear.
The four proposals were whittled down from more than 20 options the task force considered in eight meetings since October.
PJM’s Tim Horger said an analysis for one constraint found more than a $15 million improvement in FTR adequacy. However, he added, “we’re not guaranteeing anything with this.”
Under the first option (FTR Task Force option 2J), PJM “may model normal facility capability limits, if possible, for all Stage 1A over allocated facilities in FTR Auctions.”
The second option (option 3G), would allow PJM to “model normal facility capability limits, if possible, on facilities which are infeasible as a result of modeled transmission outages in monthly FTR Auctions.”
The other two options would attempt to reduce FTR funding deficits by lowering capability in FTR auctions rather than reducing infeasibilities.
The rejected proposal (option 2K) would have allowed PJM to “reduce capability, if possible, on facilities that have historically caused FTR underfunding in FTR auctions.”
MIC voted to table consideration of the fourth proposal (Long Term Auction Option) until the Federal Energy Regulatory Commission rules on FirstEnergy’s complaint over FTR underfunding (EL12-19-000). That proposal would have reduced “capability in Long Term FTR Auctions … from 100% to 50% of available capability after reserving ARR capability.”
All the proposals would guarantee ARR target allocations and ensure that self-scheduled FTRs are not impacted.
