By Suzanne Herel

VALLEY FORGE, Pa. — PJM will seek to recover up to $15 million in lost opportunity costs erroneously paid to generators that were on forced outages and not eligible for the credits, Chief Financial Officer Suzanne Daugherty told the Market Implementation Committee on Wednesday.

While Daugherty said the mistaken payments most likely extend beyond April 2013, the Tariff allows the RTO to recoup only 24 months’ worth.

“We will be contacting companies before any billing adjustments will go through,” she said. “This is not an immediate billing adjustment.”

The compensation applies to combustion turbines that are scheduled in the day-ahead energy market but are not committed in real time. However, if they are not able to operate in real time, they are not eligible for the credit.

Daugherty said in an interview that the issue came to light by chance several weeks ago.

“We were investigating a certain scenario that wasn’t even related” when staff came across instances in which generators had incorrectly or inconsistently recorded their forced outages in the eMKT system as compared with the eDART and eGADS systems, Daugherty said.

“EMKT is what we use to see if you’re eligible,” she said. Now, “we’re trying to go through and find the anomalies amongst them.

“It could be process issues, it could be training – we have no idea why they might not all have been reported consistently,” she told the committee, noting that it is the generators’ responsibility to report outages.

It will remain the generators’ responsibility to report outages, although PJM is considering adding a process that would flag discrepancies among the entries in the three systems, Daugherty said.

Daugherty said it will take weeks to refine the data and identify how many generators are affected and what their individual charges will be. The current estimate, she said, is that the total will not exceed $15 million.

In the meantime, she advised generators to check their own records. “If you got paid LOC in a time you reported a forced outage, you should know you’re likely to have a billing adjustment,” she said.

PJM stakeholders recently approved tighter rules on lost opportunity costs, correcting a provision that allowed generators to recoup start-up and no-load costs that they hadn’t accrued. The rule change is intended to remove incentives for units to clear in the day-ahead market but not in the real-time market. (See PJM Members Tighten Lost Opportunity Cost Rules; Tech-Specific Eligibility Retained.)