The Markets and Reliability Committee heard first readings last week on two proposed problem statements:

Credit Requirements for Qualifying Transmission Upgrades

Transmission developer H-P Energy Resources LLC asked members last week to consider reducing what the company says are excessive credit requirements for Qualifying Transmission Upgrade (QTU) projects.

QTUs are small transmission projects — typically less than $10 million — that can be offered into the capacity market to relieve transmission constraints in Locational Deliverability Areas (LDAs).

Attorney Janine Durand told the Markets and Reliability Committee that the current rules require credit postings that can be multiples of the construction cost, creating a barrier to entry that artificially raises capacity prices in LDAs.

As an example, Durand cited a $7 million reconductoring of a 230 kV double circuit that could increase the Capacity Emergency Transfer Limit (CETL) into an LDA by 900 MW. Under the current credit requirement, the developer would be required to post security of 0.3 Net CONE — $32.57 million, based on the last Base Residual Auction.

The MRC will be asked next month to approve a problem statement and issue charge to consider changes.

Gas-Electric Task Force Communication Issue

The Markets and Reliability Committee will be asked next month to approve a revision to the Gas Electric Senior Task Force’s problem statement to respond to a Federal Energy Regulatory Commission order authorizing the voluntary sharing of non-public, operational information between gas pipelines operators and electric transmission operators. (See FERC OKs Gas-Electric Talk.)

The FERC order is intended to reduce the likelihood of operational problems for gas-fired generation, PJM’s Sean McNamara told the MRC last week.