PJM will seek to set a limit on capacity imports before next year’s Base Reliability Auction under a problem statement approved Thursday by the Planning Committee. The problem statement, proposed by PJM, was approved without objections or abstentions.
PJM officials said they are concerned that some of the external resources that cleared in May’s base capacity auction might not be deliverable.
Growing Imports
In the last five base capacity auctions, cleared imports have grown from about 3,000 MW to more than 7,400 MW. PJM officials were especially concerned because most of the cleared imports in this year’s auction came from MISO and other points west, with very little from the north or south. (See Capacity Auction: New Generation, Imports Up, Prices, DR down)
To clear in the auction, external generators currently need nothing more than a request for firm transmission service in the transmission queue, a very low hurdle, say PJM officials.
PJM hopes to win member approval on limits in time to use them in the May 2014 auction. That will require winning FERC approval for changes to PJM’s Reliability Assurance Agreement (RAA) — which governs procedures for maintaining system reliability — before PJM posts its planning parameters on Feb. 1. The RAA changes would have to be filed with FERC by the end of November.
Aggressive Schedule
“It is a very aggressive schedule,” PJM’s Mark Sims acknowledged. Because of the tight timeline, Sims said members should provide feedback on PJM’s Key Analytical Assumptions before the next Planning Committee meeting Oct. 10. Comments can be submitted to RTEP@PJM.com
The assumptions include consideration of monitored facilities, simulated contingencies, existing commitments (long term firm transmission agreements), distribution factors (DFAX) and outage transfer distribution factors (OTDF).
Conflicting Interests
Restricting imports could benefit PJM generators who have been dismayed by falling capacity prices. But it could be challenged by 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)
The Planning Committee will consider both an overall capacity import limit and path-specific limits. In addition to potentially reducing export participation in the capacity auction, the limits would be inputs in planning analyses.
