Stakeholders approved a problem statement last week that could make it easier for banks to purchase capacity providers’ revenue streams.

Under current rules, these “auction-specific” transactions cannot be submitted to PJM until after the third incremental auction for a delivery year.

Barry Trayers of Citigroup Energy, who presented the initiative to the Markets and Reliability Committee, would like the rules changed to allow the transactions to be entered into PJM’s eRPM system after the auction that initiated them.

Trayers said the current rules were instituted to ensure that Reliability Pricing Mechanism transactions involved physical capacity. Trayers said the delay is unnecessary because PJM filings with the Federal Energy Regulatory Commission have clarified that all capacity transactions are physical.

He said the performance risk remains with the original capacity seller, but if they should default, the buyer of the auction-specific transaction would be on the hook. Other stakeholders would only be at risk should both entities default.

Trayers initially proposed that the MRC approve the rule change immediately, but stakeholders were hesitant to do so.

Dave Pratzon of GT Power Group said he would vote against the solution because the agenda listed a vote for the problem statement only. “I am unsure of what the implications are,” he said.

The problem statement was approved unanimously. The issue will be considered by the Market Implementation Committee.