The Members Committee Thursday approved the following four issues by acclimation:
Proposed errata revisions to the OA and Tariff
Reason for change: The committee approved corrections to errors inserted in Schedule 1 of the PJM Operating Agreement and Attachment K of the Tariff in 2008 and 2009. One correction will clarify how deviations occurring within one zone are associated with PJM’s Eastern or Western region for purposes of Operating Reserve charges. The other will insert a cross reference to tie language concerning forgiveness of positive demand deviations to the shortage pricing “trigger.”
FTR modeling changes developed by the FTR Task Force
The committee approved two proposals for lowering the risk of Financial Transmission Rights revenue shortfalls. The two proposals were developed by the FTR Task Force and approved May 8 by the Market Implementation Committee.
Reason for changes: The two proposals reduce or remove infeasibilities in the FTR model and may allow increased counterflow FTRs to clear.
Impact: 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 proposals were among more than 20 options the task force considered in eight meetings since October. (See MIC OKs Options to Reduce FTR Shortfalls.)
Suspension of the day-ahead market after loss of Internet
PJM will suspend its Day Ahead market if it loses Internet service under a contingency plan the committee approved.
Reason for change: PJM’s Tariff and Operating Agreement do not specify procedures for responding to an extraordinary event, such as an Internet failure, that disables the RTO’s eMKT application.
Impact: Under the tariff changes approved in July by the Markets and Reliability Committee, all market settlements would be done in real time in such circumstances. (See MRC OKs Contingency Plan for Loss of Internet.)
New benefit test for market efficiency projects
The committee approved changes to the way PJM determines beneficiaries of market efficiency transmission projects and how PJM planners add generation in market efficiency simulations.
Reason for change: The changes, which were approved by MRC in July, were developed by the Regional Planning Process Task Force to align modeling and beneficiary determinations with the revised cost allocation formula approved by the Federal Energy Regulatory Commission in PJM’s Order 1000 compliance filing.
Impact: Benefits of regional projects will be calculated on a 50/50 ratio based on their impact on production costs and net load payments (energy benefits) or impact on capacity costs and net capacity payments (capacity benefits). Benefits of local, low-voltage projects will be determined entirely on the change in net load or capacity payments for zones that experience decreases.
Under the previous method for both regional and local projects, 70% of benefits were calculated based on production or capacity cost savings, with the remainder based on change in net load or capacity payments.
Also included in the changes are a revised definition of production costs to include cross border purchases and sales. (See MRC Approves New Benefit Test for Market Efficiency Projects.)
