A proposed new scheduling option for transactions into the New York ISO faces an uncertain future after a first reading at the Market Implementation Committee meeting last week.
PJM said it plans to seek an MIC endorsement in August of the Coordinated Transaction Scheduling (CTS) proposal, which is designed to improve interchange scheduling efficiency between NYISO and PJM.
The proposal would create an additional scheduling product, intra-hour evaluations of CTS interface bids and offers. CTS Interface Bids would have as many as four bid curves and up to 11 $/MW pairs. The option would be in addition to current hourly evaluations of traditional wheel-through transactions and intra-hour evaluations of traditional LMP bids and offers.
PJM says the new product should increase forward price transparency and price convergence between PJM and NYISO.
A cost benefit analysis found that the change could reduce production costs by as much as $26 million, but PJM’s Rebecca Carroll said the RTO had not analyzed how much of those savings would be offset by make-whole payments to generators.
CTS Interface bids would be scheduled based on the projected price difference between PJM and NYISO at the interface. It would use PJM’s Intermediate Term Security Constrained Economic Dispatch (IT SCED) application, which has a two hour look-ahead capability. The application correctly predicted prices within $5 about 60% of the time. “We definitely see there’s room for improvement here,” said Carroll.
PJM initially proposed that the trades be exempt from Balancing Operating Reserve (BOR) charges because they provide economic benefits to both NYISO and PJM and will be cleared and scheduled based on near-term projected operating conditions.
But the RTO dropped that proposal after stakeholders said the transactions should be treated the same as real-time dispatchable transactions.
“Because this is a real-time product, it is going to have an impact on balancing congestion,” said one stakeholder, whose identity is being withheld at his request, per PJM’s code of conduct. He said Financial Transmission Rights (FTR) holders should not be penalized for such impacts.
PJM also proposed 15-minute settlements for all interchange transactions — the same interval for which they flow — rather than being integrated in the current hourly settlement processes. PJM said the change would require a longer transition process than using 15-minute settlements for CTS trades alone.
Credit requirements on the new scheduling option would be based on the higher of the 97th percentile historical (prior year) hourly price for the node or the 15-minute IT SCED price forecast for the node.
Stephanie Staska, of Twin Cities Power, LLC, said the credit requirement should apply to all export transactions if such a screen is initiated for CTS transactions.
Several MIC members said it was premature to schedule a vote next month given the level of detail PJM had provided them to date. “I don’t know if we understand this issue well enough to vote knowledgeably,” said Jung Suh, of Noble Americas Energy Solutions LLC.
Dave Pratzon, of GT Power Group, said stakeholders should explore the impact of the change on balancing congestion and the implications of using 15-minute settlements.
The issue has been under discussion with NYISO since November 2012. The new scheduling product would require approval of the Federal Energy Regulatory Commission.
