The Market Implementation Committee last week approved rule changes implementing a new Tier 1 resource compensation plan that the group endorsed in July. The changes passed with 28 opposed and 16 abstentions.
The policy requires changes to Manual 11: Energy & Ancillary Services Market Operations; Manual 28: Operating Agreement Accounting; Schedule 1 of the Operating Agreement; and Attachment K of the Tariff.
The revisions will go before the Markets and Reliability Committee for endorsement later this month and to the Members Committee in November. The earliest they would take effect is the beginning of next year.
Under the new compensation scheme, Tier 1 synchronized reserve resources will be obligated to respond in emergencies and subject to penalties if they can’t.
It retains Tier 1’s ability to receive compensation outside of synch reserve events whenever the non-synch reserve market price is more than $0. Units could opt out of the performance obligation, but by doing so they would forfeit any credit they would have received outside of responding to an event.
Estimated Tier 1 megawatts would still be considered when clearing the synch reserve market so that opting out could not be used to withhold supply from the market and drive up prices. (See “Non-Event Tier 1 Credit to Continue, Obligation Added” in PJM MIC Briefs.)
Proposal Would Define Non-Summer DR Capacity Compliance
The committee adopted a problem statement and issue charge to develop a method for calculating customer baselines (CBL) to be used in measuring the compliance of demand response capacity resources in non-summer months.
PJM said new methodology is required under Capacity Performance rules to avoid use of an alternate method requiring two months of load data. “This effort is only focused on how to determine the CBL that will be used to determine non-summer capacity compliance,” the problem statement said.
The problem statement passed with four abstentions; the issue charge with three abstentions.
Fuel Cost Rules Under Development
The Independent Market Monitor said he is developing more complete and better defined rules for generation owners that offer their gas-fired units based on replacement cost.
Monitor Joe Bowring said the new guidelines are needed in light of the experience of the polar vortex and the upcoming rule changes that will permit offers above $1,000/MWh and hourly changes in offers.
“We are not telling generators how to value the gas they purchase. But whatever method you use, we need to be able to verify, a day later or a month later,” he said. “It is critical that verifiable, algorithmic, systematic fuel cost policies be in place to ensure that all gas-fired generators are following the rules when these changes are implemented and that there is no ability to exercise market power.”
PJM Reviews Feedback on Disclosure, Confidentiality
PJM officials reviewed feedback on proposed changes to the RTO’s rules on confidentiality and transparency.
The proposed changes to Manual 33: Administrative Services for the PJM Interconnection Operating Agreement would relax rules barring the release of data such as uplift payments, DR deployments, generator outages and cleared capacity resources. (See PJM Stakeholders to Study Relaxing Confidentiality Rules.)
Under the proposed language, certain information on individual generation outages would be released under a two-month lag.
Some stakeholders cautioned against releasing information they said should remain confidential. Others called for release of information on causes of uplift and for posting cleared capacity by zone.
PJM officials plan to revise the manual language further based on last week’s discussion. No timeline is set for a vote.
— Suzanne Herel and Amanda Durish Cook