By Suzanne Herel

PJM members approved a charter for the Seasonal Capacity Resource Senior Task Force last week, but not before a long discussion in which some voiced concern over its potential to undermine the new Capacity Performance product.

The Markets and Reliability Committee passed the motion with 68% of a sector-weighted vote.

The charter stemmed from a problem statement and issue charge that also passed with 68% approval in February to study how seasonal resources could be incorporated into Capacity Performance. (See “Seasonal Resources in the Capacity Market to be Studied,” PJM Markets and Reliability Briefs.)

Katie Guerry of EnerNOC introduced the issue after no aggregated seasonal resources offered into the first Base Residual Auction involving Capacity Performance last August. One aggregated resource offered into this month’s BRA, but Stu Bresler, PJM senior vice president of markets, said he did not know whether it cleared.

In the last two auctions, PJM required 80% of the capacity procured to meet Capacity Performance standards. The market goes to 100% Capacity Performance resources in the next BRA, for the 2020/21 delivery year.

Since the endorsement of the problem statement and issue charge, the task force has added a work activity: to analyze alternatives to requiring 100% Capacity Performance resources, including the development of stand-alone sub-annual products.

Contrary to FERC Order?

Those opposed to the charter worried that the task force’s deliverables might run afoul of FERC’s ruling allowing Capacity Performance.

David “Scarp” Scarpignato of Calpine said his company did not want to move forward with the effort.

“We understand that PJM wants to give people the ability to truly offer aggregated resources,” Scarp said. “We do appreciate that anyone who can meet the CP requirements should be able to bid in. But this goes contrary to a very recent FERC order.”

Jason Barker of Exelon said the desired timeline to study the issue and recommend changes “seems strained at best.” Any modifications to planning parameters would have to approved by the first week of February for next year’s BRA.

Bresler echoed Barker’s concern. “I recommend restricting the talk to things that might be attainable,” he said. “You’re really going to have to focus your discussion on something that’s manageable.”

Aggregation not an Option

Dan Griffiths, executive director of the Consumer Advocates of the PJM States, said that when FERC ruled, it didn’t know that aggregated products would not be offering into the BRA or subsequent transitional auctions.

“The longer we go, the clearer we will see that’s not an option that works for seasonal capacity resources,” he said. “The notion that we shouldn’t do something because we’re changing the model I think is inconsistent in that we’ve been changing the model since it was created.”

Griffiths was among those who pushed the PJM Board of Managers at this month’s Annual Meeting to change the rules to encourage participation of seasonal resources. (See Consumer Advocates, Enviros Press PJM on Seasonal Capacity.)

Gregory Carmean, executive director of the Organization of PJM States, said that the challenges to seasonal resources participating in the market is an unintended consequence from the “rushed” Capacity Performance model.

Capacity Performance, he said, “was designed only to meet one objective: reliability. There are other aspects of competitive markets that can be affected. … It behooves PJM to at least study these options. If we move forward, and these things fall by the wayside, I don’t think PJM will be doing its part to foster competitive markets that meet the needs of the public.”

The MRC also approved a problem statement and issue charge to study the challenges associated with capacity resources subject to pseudo-tie requirements. (See “Study of Pseudo-Tie Standards for External CP Deferred,” PJM Markets and Reliability Committee Briefs.)

The issue had been postponed a month after members asked staff to narrow the scope of the proposal.

The work will be assigned to the Underperformance Risk Management Senior Task Force, which will be asked to devise recommendations addressing “equal opportunity based on deliverability” and “existing or new challenges to currently approved pseudo-tie resources.”

The task force will be expected to present their findings to the MRC in August or September for implementation in the 2017 BRA.

The motion passed with one “no” vote and zero abstentions.