By Rich Heidorn Jr.

VALLEY FORGE, Pa. — An attempt by PJM officials and the Independent Market Monitor to complete what they called unfinished business ran into a roadblock last week as several stakeholders questioned their authority, saying members should consider a new problem statement.

Officials are seeking manual changes to document rules on generator notification and start-up times they said had been authorized by members — but never implemented — in 2012.

The issue dates to a January 2011 problem statement to address reliability and market implications of generators’ desire to “de-staff” little-used units during the spring and fall shoulder months. At the time, there were no market rules governing start time and notification time parameters.

PJM and the Monitor said the Operating and Market Implementation committees approved rule changes in 2011 and 2012 but that manual changes endorsed by the Markets and Reliability Committee in June 2012 implemented only part of the “solution.”

The MRC endorsed the addition of a new section 1.4 to Manual 10 and made revisions to manuals 13 and 14D. The changes defined what happens when PJM issues a notification or start-up alert, and set notification and start-up time requirements for peak and off-peak periods.

Last week, officials told OC and MIC members they want to add a section to Manual 11 that would fully implement the rule changes. The new language, which is still being drafted, would:

• Require units to use the same notification and start-up times for both price-based and cost-based offers;
• Define “safe harbor” provisions for units whose notification and start-up times don’t affect PJM scheduling decisions;
• Establish an economic indicator in eMKT that signals to generation owners whether the Monitor anticipates their units will be economic or uneconomic;
• Add an approval and change process for notification and start-up time parameters; and
• Establish rules on start-up cost offers for short lead-time units.

Lost in the Ether

Dave Anders, director of PJM stakeholder affairs, said his research found that manual language was drafted for elements involving PJM but not for those concerning the Monitor’s role in enforcing the rules.

“They were never drafted and taken to the MRC and for some reason we closed this issue out in the issue-tracking and it got lost in the ether,” Anders told the MIC on Wednesday.

But some members who took part in the 2012 MRC vote said their recollections of the issue differ from the portrayal by PJM and the Monitor.

One stakeholder said the Manual 11 changes the Monitor is now seeking would allow it to approve both cost- and price-based schedules. “I’m telling you that would not have been approved” by members, said the stakeholder, who declined to be quoted by name.

Members “did not come to any resolution on what an appropriate notifying time would be except for … long lead-time units,” he told the OC on Tuesday. “Never did we agree that the start-up and notification was subject to approval by the Market Monitor.”

Several stakeholders said members should consider a new problem statement on the unapproved manual changes and other concerns that generators have regarding parameter-limited schedules.

A second stakeholder who also declined to be quoted by name asked whether there was a “statute of limitations” on problem statements, saying it “seems like a stretch” for officials to make the changes years later. “Everybody who was a part of the process has different recollections of what was agreed on,” he added.

Joel Romero Luna, representing the Monitor, told the OC that PJM and the Monitor have been unable to find any documentation “that things were purposely kept out.”

“Some things were implemented. Some things were not implemented,” said Luna, who was not part of the 2012 discussions.

“There was a reason that it didn’t” get implemented, the second stakeholder responded. “Because the [members] didn’t come to agreement on everything on the Market Monitor’s wish list.”

Meeting Minutes

Minutes of the March 14, 2012, MIC meeting record members’ unanimous approval of two related items. An agenda item titled “parameter limited schedules” reports that Marker Monitor Joe Bowring “reviewed the consensus proposal that resulted from the special sessions of the MIC, which focused on developing potential solutions to the issues identified with the application of parameter-limited schedules to only cost-based offers.” (Emphasis added.)

Under a second agenda item titled “unit notification and startup time,” the minutes report that PJM’s Simon Tam “reviewed the consensus proposal resulting from the special sessions of the MIC, which focused on addressing market-related issues stemming from the operational requirements for units with extended notification and start-up time. The proposal will be implemented once the required technical changes are in place, but no sooner than fall 2012.”

Minutes of the June 28, 2012, MRC meeting, at which members endorsed the earlier manual changes, are no longer publicly available on the PJM website.

What’s the Rush?

Mike Borgatti of Gabel Associates noted that the Federal Energy Regulatory Commission’s response to PJM’s Capacity Performance proposal could result in additional rule changes. “What’s the rush with putting this into effect now?” he asked. “That’s a very contentious piece of the filing.”

Path Forward

MIC Chair Adrien Ford said the manual changes would be brought to a first read at the committee’s March meeting, at which time members will consider whether to move forward or to seek a new problem statement. PJM intends to refer a provision allowing generators to include the cost of shortening notification and start-up times in the cost-based start-up cost to the Cost Development Subcommittee.

Ford said that in the interim, PJM, the Monitor and stakeholders will “seek agreement on what was the history” of the issue.