Generator representatives Thursday voiced their opposition to a proposal to set earlier deadlines for seeking exemptions from participation in PJM’s capacity market auctions.
The joint PJM-Market Monitor proposal would require generators seeking exemption from the “must-offer” requirement to file notice by Sept. 1 for the annual base residual auction (BRA) and 120 days before incremental auctions. The exemptions apply to generators that will be unable to provide capacity because they plan to retire.
The Capacity Senior Task Force approved the change by a narrow 65-63 vote. To ease the transition, PJM subsequently amended the proposal allow a Nov. 1 deadline for next year’s 2017/18 BRA. The Sept. 1 deadline would take effect with the 2018/19 BRA.
The Markets and Reliability Committee will consider the change at its next meeting.
PJM Vice President of Market Operations Stu Bresler told the MRC Thursday that the current rules, which require 120 days’ notice before the opening of the auction, don’t give PJM enough time to analyze the impact of plant retirements on system operations.
Staffing Concerns
John Horstmann, director of RTO affairs for Dayton Power & Light, said the proposed change could cause staffing problems at generators that will be forced to announce retirements earlier. “It’s hard to keep people working” when they know they are on borrowed time, Horstmann said.
Horstmann said the change also doesn’t differentiate between retirements of large plants with a major impact on the system and those of small plants in large zones, where there would be minimal impact.
John Citrolo, markets director for PSEG Energy Resources and Trade, LLC, said the proposal is discriminatory to “existing megawatts” because new resources and demand response can wait until seeing PJM’s planning parameters — for example, identification of Locational Deliverability Areas — to decide whether to enter the auction.
A Big Deal
Neal Fitch, of NRG Energy, called the change an overreaction, saying PJM has enough resources to respond to late deactivations without harm to reliability. “We’ve seen the shrugging shoulders that [suggests] `it’s not a big deal.’ It is a big deal,” Fitch said.
Reem Fahey, vice president of market policy for Edison Mission Marketing and Trading, said PJM’s proposal will burden generators without addressing the RTO’s concerns. “It creates a financial obligation on the generation owner,” she said. “You’re not allowing new entry to come into the market and replace it.”
Andy Ott, PJM senior vice president for markets, said the rules will create incentives for generation owners doing plant retirement analyses “to make the decision a few months earlier.”
