PJM’s scheduling rules aren’t flexible enough to meet the needs of wind and other variable energy resources, the Federal Energy Regulatory Commission ruled last week.
The commission said PJM’s rules failed to meet the requirements of Order 764, which requires transmission providers to offer scheduling at 15-minute intervals. FERC ordered PJM to submit a new compliance filing within 30 days.
Prior to Order 764, the pro forma Open Access Transmission Tariff — developed for generation that could be scheduled with relative precision — included no option for adjusting transmission schedules within the hour.
As a result, variable energy resources could not avoid generator imbalance charges when they knew their generation was likely to change within the hour. Generator imbalance charges pay for energy the transmission provider must purchase when a generator’s output falls short of the amount scheduled.
The revised pro forma OATT requires that transmission providers allow scheduling changes be made within 20 minutes “or a reasonable time that is generally accepted in the region … before the start of the next scheduling interval.” The commission said it wanted to allow generators to adjust their schedules in 15-minute intervals.
PJM proposed amending the firm and non-firm point-to-point transmission service provisions of its Tariff to allow 15-minute schedules. But the commission said it was not compliant with Order 764 because the proposed Tariff required that the changes be made 20 minutes “before the next clock hour,” rather than before each 15-minute interval.
(As a practical matter, PJM said it does not assess imbalance penalties on any generators, because virtually no market participants use point-to-point transmission to serve load.)
Interchange Transactions
FERC also took issue with PJM’s practice of requiring that interchange transactions have a minimum duration of 45 minutes, which the commission said “is inconsistent with Order No. 764 because it does not allow a generator to schedule for less than three consecutive 15-minute intervals.”
PJM said it implemented the 45-minute rule on interchange transactions in 2008 to prevent “market abuses.”
In 2007, MISO and its Independent Market Monitor determined that nearly 60% of intra-hour schedules between MISO and PJM occurred in the final 15 minutes of the hour. PJM said the trading was the result of “market participants’ ability to see price differences between the two RTO markets for the first third of the hour and thereby predict with relative certainty the direction of the price separation between the two RTOs when the hourly integrated prices were calculated.”
PJM said this resulted in interchange spikes of up to 1,000 MW — increasing uplift charges because of the need to call on combustion turbines to balance the generation swings.
“A return to a 15-minute duration rule would cause an increase in imbalance charges [and balancing operating reserve] costs because it is entirely reasonable to expect that market participants would return to the [prior] practices,” PJM said.
Last year, the commission rejected MISO’s proposal to retain an existing requirement that schedules starting at the 30- and 45-minute marks of the hour be made by the beginning of the hour, which MISO said was intended to prevent the problems identified in 2007.
The commission last week granted MISO an extension until June 30, 2015 to fully implement Order 764.
Data Requirements
Order 764 also requires variable resources to provide meteorological and forced outage data to help transmission providers more accurately forecast generation. The commission accepted PJM’s addition of these requirements to its Tariff.
