A joint proposal from PJM and the Independent Market Monitor to reduce payments to frequently mitigated units (FMUs) rose from the ashes to best three generator-backed proposals last week.

The PJM-IMM proposal earned nearly 70% approval in a sector-weighted vote of the Markets and Reliability Committee, despite earning just 43% support from the Market Implementation Committee in early May. (See Members Reject PJM-IMM Plan on FMUs).

The proposal was approved after three packages favored by suppliers failed to earn enough support for approval.

Market Monitor Joe Bowring has said the adders are no longer needed because of PJM’s capacity market.

The PJM-IMM proposal (Package A) leaves the calculations for adder payments unchanged but limits them to units whose net revenues are not covering their avoidable cost rate (ACR). PJM said that had the proposal been in effect in 2013, it would have reduced the number of units receiving adders from 112 to only 28 — 23 of which are scheduled to retire.

Neil Fitch of NRG Energy said his company couldn’t support the PJM-IMM package because it “seems tantamount to eliminating FMUs.”

Package G, which was considered first based on the 65% support it received at the MIC, received only 40% support from the MRC. It would have capped adders at 12% of the gross Cost of New Entry (CONE).

Of the three generator-backed proposals, only Package H received more than 50% of sector-weighted support, though it didn’t come close to the two-thirds support needed for approval. It would change adders only for Tier 2 FMUs — units that are offer-capped between 70% and 80% of their run hours over the prior 12 months.