By Rich Heidorn Jr.

WILMINGTON, Del. — PJM officials said last week they intend to move up the day-ahead energy market schedule despite a lack of consensus among stakeholders.

RTO officials said they believe the change is necessary as a result of the Federal Energy Regulatory Commission’s April order moving the timely nomination cycle deadline for gas to 2 p.m. ET from 12:30 p.m. and adding a third intraday nomination cycle.

The order required grid operators to adjust the posting of their day-ahead energy market and reliability unit commitment processes to a time “sufficiently in advance” of the timely and evening gas nomination cycles to allow generators to obtain gas (or to show cause why such changes are not necessary). Compliance filings are due July 23. (See FERC Approves Final Rule on Gas-Electric Coordination.)

Adrien Ford, director of market evolution, said PJM officials determined that they must change the energy market deadlines to comply with the order.

PJM’s filing will propose moving the deadline for submitting day-ahead offers up 90 minutes to 10:30 a.m. ET from noon. The RTO said it will post day-ahead results by 1:30 p.m., up from the current 4 p.m., as it reduces its clearing time to three hours from four.

The rebid window for the reliability assessment and commitment (RAC) run will be open from 1:30 to 2:15 p.m., up from the current 4 to 6 p.m. (Day-ahead commitments are based on demand bids from load-serving entities; the RAC run adds resources PJM believes may be needed based on PJM’s load forecast.)

In a poll of 51 stakeholders, none of the five suggested day-ahead clearing windows received a supermajority.

Slightly more than half of voters selected as their first choice a clearing window of 11 a.m. to 2 p.m., which PJM said would be too late to comply with the order. A clearing window of 10:15 a.m. to 1:15 p.m. was the first choice of 29%.

PJM said the window it proposed “received the highest overall support.” Although it was the first choice of only 8%, 31% picked it second and 59% made it their third choice.

Ford said stakeholders expressed a variety of opinions on how much time they needed between the posting of energy market awards and the gas nomination deadlines. “There was one stakeholder that needed 10 minutes. We had other members who said they needed an hour. There were others who didn’t think any of these [proposed windows] were sufficient,” Ford said. “Based on what I heard, 30 minutes was a way to meet” the FERC compliance requirement.

Stakeholder Reaction

Consultant Bob O’Connell said the changes increase risk premiums because generators will be basing offers into PJM’s markets on gas transactions executed during periods in which there is less price transparency. “You’re imposing higher costs on customers,” he said, adding that PJM should set a goal of clearing the day-ahead market in two hours or less.

John Citrolo of Public Service Electric and Gas said his company, which owns gas generation, would prefer a somewhat later start than proposed by PJM. But he added, “If gas traders get to their desks by 7 a.m. and show me some liquid prices by 9 a.m.,” the industry will adapt.

David “Scarp” Scarpignato of Calpine said his company supports PJM’s proposal, calling it “critical” to the company, whose fleet is virtually all gas-fired.

Generators with firm transportation can use second intraday nomination (ID 2) to bump those without firm transport who bought gas in ID 1. ID 3 is not bumpable.

As a result, if generators selected on the reliability run aren’t able to get their gas nominations in time for ID 2 at 3:30 pm., he said, “We’re not going to get gas.”

“Under [Capacity Performance], PJM has told generators to secure firm gas transport,” he added. “What’s the point of getting firm gas transport if we don’t get committed in time to use it?”

“We think we can get most RAC run commitments out before ID 2,” said Stu Bresler, PJM vice president of market operations.

Citrolo noted that PJM clears about 94% of its megawatts in the day-ahead market, urging, “Don’t turn things upside down for the other 6%.”

Scarp countered that on some days, the RAC run could provide as much as 12,000 MW. “It would be absolutely critical for reliability,” he said.

“We’ve been managing that later rebid window with one less nomination cycle for years,” responded Citrolo.

“And we’ve had a lot of units that can’t get gas,” interjected Mike Kormos, PJM executive vice president of operations. “We’ve been managing, but not that well.”