By Rich Heidorn Jr.
If the Federal Energy Regulatory Commission keeps its word, virtual traders in PJM should have clarity by the end of October on whether up-to-congestion transactions will be subject to additional charges.
In opening a section 206 docket on the issue last year, the commission said it would rule within five months after it receives comments following a technical conference.
The technical conference was held Jan. 7. On April 29, the commission issued the request for follow-up comments, which are due May 29 (EL14-37).
In September, FERC ordered the 206 proceeding to determine whether PJM is improperly treating UTCs differently than incremental offers (INCs) and decrement bids (DECs). While INCs and DECs are charged uplift and subject to the financial transmission rights forfeiture rule, UTCs are exempt from both.
UTC trading volumes collapsed after Sept. 8, the refund-effective date set by FERC for any uplift assessments. Some financial traders have discussed an interim fee on UTCs in an effort to encourage trading pending resolution of the case. (See Cool Response to Proposed 7-Cent Fee on Virtual Transactions.)
Among the questions on which FERC solicited comment were:
- How should the injection/withdrawal points for the virtual transaction be identified?
- Should the defined “worst case” node be limited to the market participant’s own transactions?
- Should the FTR forfeiture rule collectively assess the net impact of a market participant’s entire portfolio of INCs, DECs and UTCs instead of the current rule, which assesses virtual transactions one at a time?
- Should counter-flow FTRs and bids that relieve congestion remain exempt from FTR forfeiture rule calculations? Should financial transactions that improve day-ahead and real-time market price convergence be exempt from the forfeiture rule?
- Should UTCs be assessed uplift?
- Do UTCs impact unit commitment decisions?
- Should market participants be allowed to net INC and DEC transactions for the purpose of uplift allocations?
