No one spoke up when Market Monitor Joe Bowring opened the floor to stakeholders in the Monitor’s annual Advisory Committee meeting Friday.

No matter. Bowring and his staff took the opportunity to renew their case for eliminating “sham scheduling” and changing PJM rules on opportunity costs.

Opportunity Costs

The Monitor told the more than 20 members and PJM staffers who attended that he will seek Federal Energy Regulatory Commission approval for changes to the opportunity cost calculations because stakeholders have been unable to agree on a solution.

The Monitor says current methods of calculating opportunity costs for some markets and services are “inconsistent and inaccurate” and that there are no Tariff definitions for costs for black start units, reactive services and synchronous condensing.

Bowring said he plans to file proposed changes with FERC next year but is “very much open to discussion” with stakeholders beforehand.

‘Sham Scheduling’

Bowring also reiterated his call for an end to so-called “sham scheduling.”  The Market Implementation Committee agreed in April to investigate the Monitor’s concern but the issue hasn’t surfaced since then. (See MIC to Probe “Sham Scheduling”)  The MIC’s 2014 work plan shows the issue scheduled for discussion beginning next month.

PJM prices transactions with external balancing authorities based on the source and sink identified on the NERC eTag.

The Monitor said some traders could be manipulating PJM’s interface pricing points by breaking schedules into multiple “back-to-back” transactions that hide the actual source of generation.

Monitoring Analytics’ John Dadourian gave an example of a New York-to-PJM transaction that should result in a settlement of $16. Done by separate transactions through the other regions, the total settlement involved would be $37, Dadourian said.

In another example, a trade from Ontario to MISO, which should result in a net settlement of $5, instead totals $20 after separate transactions involving PJM. Such transactions also have loop-flow impacts of the kind that led the New York ISO to ban certain paths in 2008, Dadourian said.

To stop these transactions, the monitor recommends eliminating the Ontario interface price and requiring scheduling of complete paths, instead of “patching together” transactions with separate eTags.

Priorities

In answer to a stakeholder question at the end of the session, Bowring said the Monitor’s biggest priority is fixing problems with the capacity market — issues now before stakeholders and FERC. He also cited concerns over up-to congestion trades, allocation of uplift charges and scarcity pricing.