A modified proposal to set earlier deadlines for power plants seeking exemptions from participation in PJM’s capacity market auctions won approval from the Markets and Reliability and Members committees Thursday.

The current rules require 120 days’ notice before the opening of the auction.

Stu Bresler, PJM vice president of market operations, said that’s not enough time for PJM to analyze the impact of plant retirements on system operations and determine whether the RTO needs transmission upgrades to ensure reliability.

Andy Ott, executive vice president for markets, said the changes also will give market participants more information in advance of the auctions.

The change will 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.

At July’s MRC meeting, generators said the policy change could cause staffing problems and financial burdens at generators that will be forced to announce retirements earlier. (Generators Balk as PJM Seeks Earlier Notice on Plant Retirements.)

In response, PJM and the Market Monitor changed the proposal to provide generators more flexibility and to mask the identities of individual power plants:

• Retirement requests must be made by September 1 but can be based on a conditional deactivation analysis. The submission would specify the conditions that are creating uncertainty, such as pending negotiations on fuel or labor contracts. The finalized deactivation plan would be required by December 1 unless the request is withdrawn.
• PJM will post information on pending plant retirements in the first week of September but will do so using zonal aggregation rather than identifying individual generators. For each transmission zone, PJM will specify the amount of capacity scheduled to retire within one of the following ranges:

• Less than 100 MW
• 100 MW to 500 MW
• 500 MW to 1000 MW
• Total capacity to be retired will be specified if a zonal total exceeds 1,000 MW.

The revised proposal was approved by a 4.11-0.89 sector-weighted vote in the MRC, with support from six generators. Five generators voted no and three abstained. The Members Committee approved it 4.35-0.65.

John Horstmann, director of RTO affairs for Dayton Power & Light Co., supported the modified proposal, saying the changes made the proposal “a lot less onerous” for generation owner. But he said the earlier deadlines don’t apply to about 20,000 MW of demand response, energy efficiency and imported generation capacity, giving them a competitive advantage. “It’s a free option,” he said.

“We’re aware of that,” Bresler responded, saying PJM would consider the issue in the future.

Neal Fitch, representing NRG Energy, also praised PJM’s revisions to the proposal but said it was still an “overcorrection.”

Susan Bruce, representing the PJM Industrial Customer Coalition, spoke in support. “It’s an important step to help the market operate efficiently,” she said.