September 10, 2024
PJM to Tighten Penalties on Wayward Wind
Wind farms that fail to follow PJM’s electronic dispatch signals will no longer receive lost opportunity cost payments under a tariff amendment outlined to t...

Wind farms that fail to follow PJM’s electronic dispatch signals will no longer receive lost opportunity cost payments under a tariff amendment outlined to the Markets and Reliability Committee Thursday.

The MRC approved a problem statement that — in a departure from normal practice — was accompanied by the proposed tariff change. The tariff change will be brought to a vote at the next MRC meeting.

PJM proposed adding language to Section 3.2.3 of Tariff Schedule 1 to deny lost opportunity credits to pool-scheduled or self-scheduled wind generators that fail to follow PJM dispatchers’ electronic instructions to reduce output.

“We have (wind) operators not following the economic basepoints,” PJM’s Dave Souder told members. “They’re waiting for PJM to call them.”

Having to issue manual dispatch instructions delays generators’ responses, causing less efficient market operations and a potential risk to system reliability, PJM says.

PJM proposed the new language as a Tariff change in response to a May 29 Federal Energy Regulatory Commission order that rejected its earlier proposal to incorporate the new rules in the Operating Agreement. The commission said the OA language “failed to provide any detail or tariff language describing the specific circumstances under which compensation would be reduced or how the compensation would be reduced.”

Robert O’Connell, vice president of J.P. Morgan Ventures Energy Corp., said the rules were unfair because they were “developed behind closed doors” and would treat wind differently than other generation. O’Connell also objected to the inclusion of the tariff language in the problem statement. “Anything that comes with tariff language is a solution,” he said.

Mike Kormos, PJM senior vice president for operations, said PJM already had rules penalizing other forms of generation for not following dispatch instructions. “We’ve had this in the rules for eternity,” he said.

Market Monitor Joseph Bowring supported PJM’s proposed tariff change as “exactly right.

“This is a narrow problem that needs to be addressed,” he said.

O’Connell’s motion to return the problem statement to the Market Implementation Committee without the tariff proposal was ruled out of order by Kormos, the chairman of the MRC. Kormos said it would set a precedent to prevent a vote on a problem statement.

In a rare move, O’Connell appealed the parliamentary ruling to the members. His appeal received less than 15% support in a sector-weighted vote, far below the two-thirds needed to overturn the ruling.

The problem statement was approved with three abstentions and no objections.

GenerationPJM Markets and Reliability Committee (MRC)

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