VALLEY FORGE, Pa. — PJM will try again next month to gain stakeholder approval for codifying several generator operating parameters after a Market Implementation Committee discussion led to last-minute changes.
After about an hour of debate, the options to vote on had been rearranged so much that committee Chair Chantal Hendrzak decided to put the vote on hold. But there will be “no excuses next month,” she said.
The original ballot offered two alternatives to the status quo. However, there was enough confusion about the difference between the two that Bob O’Connell, who had submitted the first package on behalf of PPGI Fund A/B Development, offered to remove it if stakeholders wanted to support Package B, which had been submitted by the Independent Market Monitor.
Exelon, however, said it couldn’t support that package without some of the wording from O’Connell’s proposal that included in the definition of notification time an allowance for traveling to and procuring fuel for unstaffed units. Market Monitor Joe Bowring questioned the request, saying it contradicts elements of Capacity Performance’s design and isn’t consistent with the neutral nature of the definitions.
After the discussion, O’Connell’s Package A was removed and replaced with Package C, a combination of the Monitor’s Package B with the additional notification time language from Package A.
Stakeholders were concerned the changes could leave them with unrecoverable costs. “We’re looking at some costs associated with the proposed changes, and we have to look closely at whether the benefits merit the costs,” FirstEnergy’s Jim Benchek said.
Bowring questioned that concern as well. “I don’t believe from what I’ve heard that the cost to implement this is very high,” he said. Package A violated the Tariff and wasn’t fully “unnested,” he said, while Package B was. Bowring said he would support the status quo if his package isn’t approved.
PJM’s Tom Hauske said the RTO supports maintaining the status quo. He said it would take about a year to implement the changes once hourly offers have been deployed. Several changes, such as soak time and how ramping parameters are handled in the day-ahead market, will need to be addressed during the implementation process, he said.
PJM’s Straight-Line Offer Curve Recommended for Capacity Sellback
After more than an hour of debate, stakeholders overwhelmingly supported PJM’s straight-line offer curve for selling back excess capacity in February’s third intermediate auction for the 2017/18 delivery year. The proposal was recommended to the Markets and Reliability Committee for endorsement.
The proposal received 144 votes (81%) while no other proposal received more than 48%. It was also heavily preferred over not selling the capacity back at all, receiving 86% of that vote.
Bowring reiterated his position that PJM should not procure more capacity than it needs, nor sell back any capacity it purchases. If necessary, he said, excess capacity should be offered back at the prices at which it was obtained. The Monitor submitted a proposal to reflect that.
“We think the right starting point is what load actually paid,” Bowring said, adding that it’s not possible to fully optimize the resale without an algorithm that isn’t disclosed to would-be buyers. “Why is PJM tipping its hand when it’s selling back load’s capacity?” he asked.
Stakeholders had dickered over whether to entertain a last-minute proposal from Public Service Enterprise Group. In the end, the proposal was allowed, but it received the fewest votes.
The PJM proposal contains three parts. The first retains the status quo for how the RTO determines the quantity and price at which it procures or releases megawatts in an incremental auction because of changes in load forecast or reliability requirements. (See “Proposal Would Set Higher Prices for Capacity Released in 3rd I.A. for 2017/18,” PJM Market Implementation Committee Briefs.)
The second part would release the 10,017 MW obtained in the 2017/18 transition auction separately, according to an upward-sloping price curve.
Lastly, any of the separately released capacity that did not clear would be excluded from the determination of excess commitment credits. PJM must file its plans for releasing the capacity with FERC by November.
Dan Griffiths, executive director of the Consumer Advocates of the PJM States, said the debate is at its core a balance-sheet issue for the companies involved. “Costs go to load. Benefits do not necessarily go to load; they go to [load-serving entities], so let’s just remember that,” he said. “The deals are often cut ahead of time, and load doesn’t see refunds.”
Following FERC Filing, Fuel-Cost Policy Changes Continue to Cause Consternation
PJM’s hope to receive approval for its fuel-cost policy changes at the October Board of Managers meeting is looking less likely.
A special MIC session Sept. 13 to review the necessary Manual 15 changes ended with stakeholders saying they felt pressured to approve incomplete language. That resulted in the changes being withdrawn from voting during the regular committee meeting the following day.
All of that occurred with the promise of the imminent filing at FERC of a protest by the Monitor. Bowring filed his protest Friday (ER16-372-001), one of several protests and comments in response to PJM’s Aug. 16 compliance filing. (See related story PJM Attempting to Usurp Market Mitigation Role, Monitor Says.)
Although the compliance filing focused largely on improving flexibility for hourly generation offers, the fuel-cost policy issue has received the majority of scrutiny from PJM stakeholders. (See Heeding Stakeholders, PJM Reduces Proposed Fuel-Cost Penalties.)
PJM wants the changes implemented in time for winter.
Bowring pointed out that the board can assemble over the phone for a vote, so having this prepared for either the October or December board meetings isn’t necessary.
Stakeholders have brought up a bevy of concerns, from costs that appear to be counted twice to implementation unknowns to filing timeframes.
PJM staff have agreed to review stakeholder input and provide responses at an upcoming meeting.
PJM Addressing Timing Discrepancy for Publication of Day-Ahead Results
PJM has referred stakeholder concerns about changes to the posting of day-ahead market results to the Tech Change Forum.
Prior to recent systems upgrades, PJM released day-ahead results in all information outlets at the same time: 4 p.m. Now that results are approved and posted as they’re ready, it varies how much time it will take for that information to show up in different systems, PJM’s Adam Keech explained.
Jason Barker of Exelon asked if the RTO could provide a hierarchy of how the systems receive the information, which Keech said he’d look into providing.
— Rory D. Sweeney