WILMINGTON, Del. — The Markets and Reliability Committee last week deferred voting on a problem statement and issue charge to study the challenges of the pseudo-tie requirement for external Capacity Performance resources. Staff will narrow the scope of the proposal and return to the committee in May.

PJM has been working on temporary solutions to resolve operational and reliability issues, but it wants to decide on a long-term solution in time for the 2017 Base Residual Auction.

In order to participate in PJM’s capacity market, external resources are subject to pseudo-tie requirements. PJM has encountered some issues with the construct, however, including compliance risks, congestion management challenges, transmission service evaluation issues and operational impacts on neighboring systems.

Stu Bresler, vice president for market operations, said that a study such as the one proposed by the problem statement and issue charge could lead to changing the qualifications for granting transmission service into PJM.

A number of stakeholders expressed concern that if the deliverability standards are altered, they might preclude units currently allowed to deliver capacity into PJM from being able to do so in the future.

Bresler assured members that any changes would be applied “prospectively” and would not affect capacity that already has cleared.

However, that did not assuage the concerns of members including Ed Tatum, of American Municipal Power, who worried that generators may invest in upgrades only to find they are no longer eligible to deliver capacity in future delivery years.

“You need to have certainty,” he said. “We’re talking about making investments in units.”

PJM Prepares for FERC Directive on MOPR

Bresler told the MRC that PJM wants to schedule meetings so that members are prepared if FERC directs the RTO to change its minimum offer price rule (MOPR) as a result of Ohio regulators’ controversial approval of power purchase agreements for FirstEnergy and American Electric Power generating units. (See PJM: MOPR Could be Improved, but not by BRA.)

Eleven generating companies had asked FERC to expand the MOPR, which currently applies only to certain new resources, saying they feared that the Ohio PPAs could lead to below-cost offers from existing resources.

PJM agreed that the MOPR should be changed to counter subsidized offers from existing generators, but it asked FERC not to order changes before next month’s BRA.

“Putting rules of this magnitude in place in such a short timeframe could lead to significant unintended consequences. The best course of action is to kick it to the stakeholder process, allow us to thoroughly vet the issue and allow us to come back in time for the next auction,” Bresler said, paraphrasing PJM’s filing.

“Having suggested that, we came to the realization that if we waited for a response from FERC before we started the ball rolling, it would put us even further behind the eight ball,” he said. “We thought it would be prudent to get some meetings on the calendar.”

Assuming FERC respects PJM’s wishes and does not order changes for the upcoming auction, the first educational meeting would be scheduled for late May or early June.

In two other dockets, FERC on Wednesday rescinded the affiliate-sales waivers held by AEP and FirstEnergy, requiring federal review of the PPAs. (See FERC Rescinds AEP, FirstEnergy Affiliate Sales Waivers; Will Review Ohio PPAs.)

Changes to Manuals 12, 19 Approved

Members endorsed the following manual changes:

• Manual 19: Load Forecasting and Analysis. Revisions remove outdated rules for legacy air conditioner and water heater cycling programs and correct formulas for end-use weather variables.
• Manual 12: Balancing Operations and Tariff changes incorporate business rules of dynamic transfers.

Settlement Method for Demand Response Adopted

The committee endorsed a new method for measuring emergency demand response. It changes the emergency energy default customer baseline (CBL) from the hour before to the current default economic CBL. (See “Members Endorse New Way to Measure Emergency DR,” PJM Market Implementation Briefs.)

GDECS Definitions and Clarifications Endorsed

The MRC and the Members Committee approved the nonsubstantive reorganization and relocation of definitions recommended by the Governing Documents Enhancement and Clarification Subcommittee (GDECS).

As part of its consent agenda, the MC also approved an additional 11 items recommended by the GDECS.

Over 16 objections, the MC also endorsed the definition of capacity import limit. Members had expected to vote on a friendly amendment to the definition, but that was withdrawn before the meeting.

MRC First Readings

• The MRC heard the proposed charter for the End of Life Senior Task Force, created in March to develop ways to provide more transparency and consistency in the communication and review of end-of-life projects in the Regional Transmission Expansion Plan.
• Members were informed of a proposed revision to the charter of the Energy Market Uplift Senior Task Force to include the review of virtual transaction rules.
• PJM’s Dave Egan presented the recommendations of the Earlier Queue Submittal Task Force. The changes would require interconnection customers to provide more documentation earlier to ensure consideration of their projects. (See “Stricter Rules Proposed for Queue Submittal Process,” PJM Planning Committee and TEAC Briefs.)
• Barry Trayers of CitiGroup Energy proposed adding the phrase “Any transactions that PJM staff determine would not benefit from delaying until the [equivalent forced outage rates] are published” to the “Replacement Resources” section of Manual 18.
• A proposed charter was presented for the Seasonal Capacity Resources Senior Task Force, which will study how such resources may participate in the Capacity Performance model in the 2020/21 delivery year and beyond.
• Dave Anders presented some minor word changes to a previously approved problem statement and issue charge to study distributed energy resources’ path to PJM markets. (See “Faster Path to Market for Distributed Resources to be Studied,” PJM MRC & Members Committee Briefs.)

– Suzanne Herel