PJM should change its rules on pricing and scheduling of interface transactions to reflect changes in system conditions and eliminate the need to schedule physical transactions across seams, the RTO’s Independent Market Monitor says.

The two proposals were among four new recommendations that Monitoring Analytics made in its third-quarter State of the Market report.

The Monitor said PJM and neighboring balancing authorities should develop an optimized joint dispatch that treats their seams like any other constraint under LMP rules.

It also recommended that PJM adjust its weighting procedure to “ensure that the interface prices reflect ongoing changes in system conditions and that loop flows are accounted for on a dynamic basis.” It said PJM should conduct an annual review of the mappings of external balancing authorities to individual interface pricing points to reflect changes to the impact of the external power source on PJM tie lines as a result of system topology changes.

The Monitor also recommended changing the submission deadline for real-time dispatchable transactions from 1200 the day before to three hours before the requested start and that the minimum duration be reduced to 15 minutes from one hour. “These changes would give PJM a more flexible product that could be utilized to meet load in the most economic manner,” the Monitor said.

Offering a different solution on an issue it has discussed before, the Monitor said the amount of tier 1 megawatts paid when the non-synchronized reserve market clearing price goes above zero should be equal to the tier 1 megawatts estimated by the real-time security constrained economic dispatch market solution.

The Monitor has said that its preferred solution is to stop paying tier 1 synchronized reserves the synchronized-reserve market-clearing prices when the non-synchronized price is above zero. Last month, the Market Implementation Committee approved a problem statement proposed by Monitor Joe Bowring to consider changes to the payments.

Bowring said the current rules result in unnecessary payments of more than $85 million a year. (See Monitor: Cut Pay for Tier 1 Synchronized Reserves.)