By Michael Brooks
PJM says critics of its requests to safeguard capacity for the 2015/16 delivery year ignored the context of its filings with the Federal Energy Regulatory Commission.
Fearing that it might run short due to retirements of coal-fired generation, PJM asked for a one-time waiver on rules that would otherwise require it to release 2,000 MW of capacity in the Feb. 23 third Incremental Auction for 2015/16 (ER15-738). Dominion Resources called the filing “premature and speculative.” (See PJM Capacity Release Filings Draw Critics.)
PJM countered that “Dominion ignores the resource adequacy planning context of PJM’s request. By its very nature, planning is forward-looking and prudently anticipates a variety of possible conditions and scenarios. Dominion’s argument is comparable to contending that the possibility that loads could substantially exceed forecast levels this summer is ‘premature and speculative;’ or that the possibility that forced generation outages could greatly exceed average levels next winter is ‘premature and speculative.’”
PJM also dismissed arguments that the 2,000-MW figure was too broad, saying that it is barely more than 1% of the resources committed in the Base Residual Auction for this delivery year.
PJM also proposed revising its Tariff to allow it to enter into capacity agreements made outside the Reliability Pricing Model auctions (ER15-739).
In its protest, Old Dominion Electric Cooperative argued that PJM had “not demonstrated a threat to reliability sufficient to warrant its proposal for undefined and unlimited authority to enter into agreements” outside of the RPM. It also said that “no [reliability-must-run] procurement should be pursued or entered into without further being informed by the third Incremental Auction results.”
PJM said that it appears that the amount of uncommitted resources is not enough to meet the potential capacity deficiency. “Therefore, PJM likely cannot rely on the third Incremental Auction as a source of supplemental capacity to increase overall capacity commitment levels and help mitigate the identified resource adequacy concerns,” the RTO said.
PJM also disputed the allegation made by Direct Energy that the RTO is seeking a “blank check.”
“PJM showed in the Dec. 24 filing that if generator outage and peak load conditions like those seen in January 2014 were to recur in the 2015/2016 winter, the PJM region could be short by up to 2,600 MW,” the RTO said. “PJM therefore is seeking supplemental capacity agreements of no more than 2,600 MW.”
PJM is asking FERC to approve its proposals before the third Incremental Auction on Feb. 23.
