Below is a summary of the issues scheduled to be brought to a vote at the Markets and Reliability Committee Thursday. (There is no Members Committee meeting this month.) Each item is listed by agenda number, description and projected time of discussion, followed by a summary of the issue and links to prior coverage in RTO Insider.

RTO Insider will be in Wilmington covering the discussions and votes. See next Tuesday’s newsletter for a full report.

2. PJM Manuals (9:10-9:25)

A. Manual 28: Operating Agreement Accounting

Reason for change: Incorporating changes to lost opportunity cost compensation as approved by FERC.

Impacts:

• Changes sections 5.2.6 and 5.2.8 (Operating Reserve & Reactive Services Lost Opportunity Cost Credits) to limit lost opportunity cost compensation to the lesser of a unit’s economic maximum or maximum facility output as approved in FERC Docket ER13-1200.
• Section 7.2 (Shortage Pricing) amended to incorporate calculation details for non-synchronized reserve market lost opportunity costs.
• Modifies section 5.3 (Operating Reserve) to correct errors and provide clarifications on exempting deviations during shortage conditions and revisions for associating interfaces to the East or West BOR regions.
• Modifies sections: 5.2.3 to incorporate details of Lost Opportunity Cost Credit for Synchronous Condensing; 5.2.6 (Wind Lost Opportunity Cost) to align language with Tariff; 17.3 (Allocation of Annual and Monthly FTR Auction Revenues) to correct section reference.

PJM contact: Stan Williams

B. Manual 14B: PJM Region Transmission Planning Process

Reason for changes: Updates to reflect changes from FERC Order 1000, switch to two-year planning cycle and revised benefit/cost test for Market Efficiency projects.

Impact:

• Separates Reliability and Market Efficiency into subsections
• Adds a new section (2.1.2) to explain two-year planning cycle on Market Efficiency projects.
• Changes to reflect Order 1000.
• Changes energy market benefit calculation component of benefit/cost ratio for Market Efficiency projects eligible for regional cost allocation. The change in total energy production cost and change in load energy payments (previously weighted .70/.30) will be equally weighted.

PJM contact: Tim Horger

3. CETL Stability– Easily Resolved Constraints (9:25-9:45)

Constraints that can be quickly and cheaply resolved would be included in the Regional Transmission Expansion Plan (RTEP) under a proposal MRC will be asked to endorse.

Impact: Before posting the planning parameters for each Base Residual Auction, PJM staff would be required to identify Locational Deliverability Areas in which the Capacity Emergency Transfer Limit is less than 1.15 times the Capacity Emergency Transfer Objective. Upgrades that raise the ratio above 115% would be added to the RTEP if they:

• Cost less than $5 million;
• Can be completed within 36 months or prior to June 1 of the Delivery Year; and
• Does not duplicate customer-funded upgrades already in the transmission queue (e.g., one whose cost is assigned to an interconnection customer).

4. Parameter limited schedules (pls) revisions (9:45-10:00)

PJM will add new processes for generators seeking exemptions from operating parameters under changes endorsed by the Market Implementation Committee Aug. 7.

Reason for change: PJM’s generation parameters set defaults for different types and sizes of generators. The parameters cover minimum run and down times, maximum daily and weekly starts and turn down ratios (Eco Max/Eco Min). They were initiated in 2008 to ensure lower make whole payments for generators whose entire offers were not covered by Locational Marginal Pricing revenues.

Impact: The proposed change would create three types of exemptions:

• Temporary Exception: A one-time exception of 30 days or less.
• Period Exception: An exception lasting for at least 31 days but no more than one year during the 12 months between June 1 and May 31.
• Persistent Exception: An exception lasting for at least one year.

The changes will require revisions to Attachment K of the OATT, Schedule 1 of the Operating Agreement and section 2.3.4 of Manual 11: Energy & Ancillary Services Market Operations.

Assuming FERC approval, the changes will be effective Oct. 1.

PJM contact: Jacqui Hugee

5. Stakeholder Process on Triennial CONE Review (10:00-10:15)

MRC members will be asked to consider changes to the Cost of New Entry (CONE) triennial review process. CONE values are used in PJM’s Reliability Price Model (RPM) to obtain capacity resources.

Reason for problem statement: PJM and members agreed to explore changes in the review process in a settlement approved by the Federal Energy Regulatory Commission in January (Docket No. ER12-513).

Impact of problem statement:  The inquiry will assess the use of the Handy-Whitman Index of public utility construction costs for adjusting CONE and other potential changes.

PJM is required to file Tariff changes with FERC in time for the 2014 triennial review or a status report if stakeholders are unable to reach consensus on changes.

PJM contact: Paul Sotkiewicz