How much is too much? That’s what PJM officials want to know following May’s base capacity auction, in which an unprecedented volume of external resources cleared.
In the previous four base capacity auctions, cleared imports grew from about 3,000 MW to more than 4,500 MW. In this year’s auction, cleared imports jumped to more than 7,400 MW.
“Up until the last auction I would say we were well below our limits,” Steve Herling, PJM vice president of planning, told the Planning Committee Thursday. With the latest auction, PJM officials fear imports “may have approached, or even exceeded, the amount that can be reliably supported during actual emergency conditions.”
Officials outlined a proposed problem statement to develop a methodology for determining an import limit that would be used in the planning process and applied to future auctions. The committee will be asked to endorse the problem statement at its next meeting with a goal of obtaining FERC approval in time for the May 2014 base auction.
Establishing a cap will require revisions to the Reliability Assurance Agreement, which governs procedures for maintaining system reliability.
To clear in the auction, external generators, like internal resources, must be considered deliverable, meaning the capacity isn’t bottled locally and can get to the transmission system. Resources currently need nothing more than a request for firm transmission service in the transmission queue, said Herling, “which is virtually no hurdle at all.”
Of the 7,483 MW in imports that cleared in the auction, 4,788 MW (64%) had confirmed firm transmission service from the resource into PJM. The remainder was under study. (See Capacity Auction: New Generation, Imports Up, Prices, DR down.)
PJM officials are particularly concerned because the majority of the imports in this year’s auction are coming from MISO and other points west, with very little from the north or south.
West of PJM imports nearly doubled to 7,081 MW over last year’s auction, 4,723 MW of it from MISO and areas that will be integrated into MISO by the 2016/2017 Delivery Year.
Efforts to set a cap on imports will be closely scrutinized by PJM generators, who have been dismayed by falling capacity prices. Also watching closely will be MISO officials, who have complained to FERC that PJM’s modeling of cross border transmission deliverability is unfairly limiting its generation from competing in PJM’s capacity market.
(See FERC Likely to Increase Pressure on PJM-MISO Joint Market Talks.)
