VALLEY FORGE, Pa. — The Market Implementation Committee last week approved rule changes that will help the Illinois Municipal Electric Agency to meet its capacity requirements with historic resources.

IMEA is among the load-serving entities that procured capacity resources outside of their locational deliverability areas to serve a portion of their load.

PJM’s Reliability Pricing Model capacity construct, which launched after IMEA obtained its external capacity, does not provide a way to allocate and maintain the benefits of historical resource and transmission service agreements — an issue that can increase an LSE’s costs if its LDA becomes modeled separately and binds in an auction.

The Independent Market Monitor had expressed concern that PJM’s initial proposed solution was overly broad. But it agreed with the revised solution, which covered only LSEs subject to fixed resource requirements (FRR).

FRR entities such as IMEA are subject to a percentage internal resource requirement (PIRR) if their zone is modeled separately, voiding the use of their historic capacity resources.

The solution approved by members makes three rule changes:

• The PIRR is enforced only if the LDA has been separately modeled due to certain triggers;
• An FRR Entity would be permitted to terminate its FRR alternative election prior to meeting the minimum five-year commitment period requirement under certain conditions; and
• First-time elections of the FRR alternative would be due four months prior to a Base Residual Auction instead of the current two-month deadline.

PJM Asked to Consider Masking FTR Ownership

PJM would consider masking ownership of financial transmission rights under a problem statement presented by DC Energy’s Bruce Bleiweis at the MIC last week.

Currently, all RTOs publish the identities of FTR holders when posting auction results. By contrast, in all other market transactions, such as capacity auctions and daily energy auctions, PJM does not disclose the ownership, Bleiweis said.

“I think the inequity is transparent to everyone here,” Bleiweis said. “We don’t see any reason FTRs should be treated differently” than any other power product.

FERC initially allowed the current transparency to spur a secondary FTR market. Now that this market is established, this disclosure is no longer necessary, Bleiweis argued. He said that knowing another company’s position could lead to unfair competitive advantages.

There was some confusion as to what exactly is disclosed in other products, however. Carl Johnson of the PJM Public Power Coalition said he thought PJM published capacity positions of companies once the delivery year began.

PJM’s Tom Zadlo answered that only a list of cleared units is posted. Bleiweis said that if the problem statement is approved at next month’s MIC meeting, he would work with PJM to generate a simple list showing exactly what is posted for each product.

Marji Philips of Direct Energy said she “remains very concerned” by the proposal. In the past, she said, market participants have identified “mischief” in the FTR markets that the Independent Market Monitor and PJM did not catch, based on the increased transparency.

Bleiweis said PJM’s effort would be consistent with ISO-NE, which approved a move to aggregate FTR ownership at its November 2014 Markets Committee meeting.

— Michael Brooks and Rich Heidorn Jr.