The Operating Committee Tuesday postponed a vote on proposals to increase penalties for under-performing synchronized reserve providers.

The committee voted 70-0 to delay the vote until five days after PJM provides members with performance data for their own Tier 2 synchronized reserve resources. PJM’s Stan Williams said PJM should provide the requested data within 10 days.

The representative for Dayton Power & Light Co. initially proposed the vote be delayed until the October OC meeting.

Williams said that an October vote would jeopardize PJM’s hopes of enacting tougher penalties by the end of 2013 — and thereby avoid a mention of the issue for the third year in a row in Monitoring Analytics’ State of the Market report.

Williams’ comment angered Brad Weghorst, of PPL. “Are we going to rush a proposal through just so we can make the State of the Market report?” he asked. “I don’t give a crap” about meeting the report deadline.

The Dayton representative, however, agreed to Williams’ request to amend his motion by calling for a special OC meeting five days after the data is provided.

PJM and the Market Monitor proposed increasing the penalties, saying the current penalty structure is insufficient to ensure compliance.

The current penalty is to take away revenue for the hour when the resource did not perform and also require the resource to provide Tier 2 reserves without compensation when needed for three days. If a resource fails to perform in one hour it doesn’t affect its credit for performing in another hour during the same day.

Because Tier 2 SR calls have declined to about once every 10 days from one in every three days, the three-day penalty has lost its bite. A PJM analysis found that between 2009 and 2012 generators provided only 64% of the megawatts they were assigned while demand response resources provided 53% of assignments.

Second Penalty Option

The second alternative was proposed by Dave Pratzon, of GT Power Group, who represents generation owners. Pratzon said the proposal was tougher than the current penalty but less severe than the PJM-Market Monitor proposal, which he called overly punitive.

PJM shouldn’t switch from a “penalty that’s likely too low to catch people’s attention to a penalty that’s too high,” Pratzon said.

Pratzon said one of the causes of the current performance is that many resource owners may not realize they’re being penalized because the penalties aren’t itemized in their PJM bills.

“I believe there’s a shared interest in improving performance,” Pratzon said. “Are there any bad actors in my generation fleet? If there are, I want to get with the station operators … and improve their performance.”

Another member agreed that PJM’s proposal was overly harsh but said Pratzon’s might be too lenient. He suggested a 25% “adder” to Pratzon’s penalty.