The Markets and Reliability Committee approved an initiative to ensure that generation fleet owners are properly compensated for reactive power and voltage control services as they add or retire generators.

The effort was prompted by the Federal Energy Regulatory Commission, which said there was no mechanism for obtaining refunds from fleet owners that may be collecting payments for retired plants.

“I think FERC wanted to make clear that the obligation was on the generator to” ensure it has filed updated rate schedules, MRC Chairman Mike Kormos said.

Members approved a revised problem statement including language suggested by Public Service Enterprise Group. PSEG’s Ken Carretta said the original statement assumed that fleet owners that haven’t filed revised cost schedules with FERC after plant retirements are being overpaid.

Carretta said when PSEG updated its rate schedule in 2008, its payments increased to $27 million from $9 million. “We built new units [and] made capital improvements. So it doesn’t necessarily follow that rates should go down,” he said.

PJM officials said they did not know how much ratepayers might be overpaying. “There have been a couple of occasions where this occurred,” PJM’s James Burlew said. “We know units have retired. We don’t know if these units are [still] being compensated.”

Carl Johnson, representing the PJM Public Power Coalition, wasn’t happy with PJM’s inability to answer the question. “It’s hard for me to explain to my members that we don’t know what we’re paying for,” he said.