Fuel-Cost Policy Revisions Face Another Hurdle

VALLEY FORGE, Pa. — PJM’s efforts to hammer through manual revisions ahead of FERC action on fuel-cost policies were stymied at last week’s Markets and Reliability Committee meeting.

Despite PJM’s desire to implement the changes as soon as FERC approves PJM’s hourly offers compliance filing, stakeholders shrugged off the urgency and insisted on perfecting the language.

The revisions to Manual 15 were approved by the Market Implementation Committee on Nov. 2 following months of debate. At the MRC meeting, stakeholders said there are still unresolved issues with how the changes are worded. Of particular concern at last week’s meeting was the requirement that generators “immediately” replace a revoked policy. (See “Fuel-Cost Policy Revisions Approved,” PJM Market Implementation Committee Briefs.)

“It makes it sound like we need to be at the ready every day” with a new policy, said Steve Lieberman of Old Dominion Electric Cooperative. “I think everyone here would agree it’s a bit of a challenge to get one approved initially.”

PJM’s Jeff Schmidt responded that the intent is that generators should already have a policy approved, but stakeholders were not swayed.

“We do need to make some change to address that ‘immediately’ business,” American Municipal Power’s Ed Tatum said. “When things get going, people refer to the governing language.”

Catherine Tyler Mooney of Monitoring Analytics, PJM’s Independent Market Monitor, reiterated concerns that “confusing language” is creating “a problematic process.”

“The proposed M15 language creates a PJM fuel-cost policy review that overlaps the timing and scope of the Market Monitor’s independent review. There’s a potential where we have a PJM-approved version of a fuel policy that can’t be accepted by the Market Monitor,” she said.

Schmidt said PJM continues to bring the revisions forward because it will have 45 days after FERC’s approval to implement the rules, which might not be enough time to secure all the committee endorsements. Several stakeholders acknowledged this concern, including Bob O’Connell of PPGI Fund A/B Development, who said continuing to put off the vote might put stakeholders in the position of having to make changes within an unattainable deadline.

PJM’s Suzanne Daugherty, who chairs the MRC, said the committee can convene over the phone for a single-issue conference call if it becomes necessary to send an advisory vote to the board prior to the January MRC. The revisions will be returned to December’s Market Implementation Committee meeting to address the wording issues.

Citigroup Wins Change on Capacity Resales

Citigroup Energy’s Barry Trayers sparred with PJM’s Stu Bresler over Trayers’ proposed revisions to Manual 18, but Trayers’ changes were endorsed without PJM’s additions.

Trayers’ manual change eliminates PJM rules for how “early replacement” of capacity obligations can be made. He noted that the rules’ deadline of Nov. 30 for performing replacement transactions isn’t supported by language in the Tariff.

Bresler, PJM’s senior vice president of operations and markets, had proposed language changes that Trayers had originally accepted as a “friendly amendment.” However, he rescinded that approval at the MRC, saying he had received advice that the amendment strayed from his intent. That meant Bresler’s amendment would only be considered if Trayers’ original proposal failed.

At issue is how quickly capacity sold during the Base Residual Auction can be replaced through Incremental Auctions. Trayers said the change allows him to reconcile his books much sooner. Bresler said it widens a loophole that allows participants to arbitrage price differences between the Base and Incremental Auctions by reselling the replaced capacity.

Both Bresler and the Independent Market Monitor said they preferred the status quo over Trayers’ motion. Because Trayers’ proposal was approved, PJM’s amendment was never considered.

DASR Approved Despite Slight Change

The proposed day-ahead scheduling reserve for 2017 was approved despite being “slightly different” than what PJM outlined to the Operating Committee earlier this month, said PJM’s Tom Hauske. The change came because not all performance information had been collected at the time. The approved figure was 0.04 percentage points less than originally proposed, from 5.52% to 5.48%.

Manual 35 Retired; PJM Promises Further Consolidation of Definitions

Members endorsed retiring Manual 35: Definitions and Acronyms but only after confirming that a document consolidating all definitions will be developed.

PJM said Manual 35 hasn’t been properly maintained in years, raising the risk of legal disputes over members using incorrect and outdated definitions. Going forward, the legal definitions will be maintained in a single section within the Tariff, Operating Agreement and Reliability Assurance Agreement.

Only informal definitions — “layman’s terms,” as PJM’s Janell Fabiano called them — will be included in the glossary on PJM’s website. Staff deleted more than 400 outdated terms from the glossary and added an expanded disclaimer noting that it is for reference, and that the formal definitions in the governing documents are legally binding.

Fabiano said RTO officials will discuss creating a consolidated legal definitions document at a Dec. 2 meeting of the Governing Document Enhancement & Clarification Subcommittee.

Venue for DER Discussions to Change

PJM’s Dave Anders said the special MRC meetings on distributed energy resources have gone into stasis while two key issues get hashed out elsewhere.

The Planning Committee is continuing work begun in August on an alternate queue process and the allocation of upgrade costs less than $5 million while discussions on potential market rule changes will be conducted in special sessions of the MIC.

The venue of future discussions will be determined by how resources plan to connect. “You have to make a choice: You have to be in front of the meter or behind it,” Anders said.

Resources that plan to be in front of the meter will follow the process being developed by the PC to secure capacity injection rights. Behind-the-meter resources, which can both reduce load and inject power, will be governed by the process developed through the MIC. The special MRC sessions will reconvene as necessary once those routes are finalized.

MRC Endorses Manual Changes

Members also unanimously approved the following manual changes:

• Manual 3: Transmission Operations. Revisions, the result of a periodic review, include updating voltage control at nuclear stations, certain special protection scheme references and the BC/PEPCO operating procedure.
• Manual 14A: Generation & Transmission Interconnection Process. Revisions, resulting from special PC sessions, set new service request cost allocation and study methods.
• Manual 14B: PJM Region Transmission Planning Process. Revisions will update the capacity import limit calculation procedure.
• Manual 18B: Energy Efficiency Measurement & Verification. Revisions, the result of a periodic review, include updates to incorporate the implementation of Capacity Performance.
• Manual 21: Rules and Procedures for Determination of Generating Capability. Revisions, the result of a periodic review, include clarifications to testing rules and terms.
• Manual 28: Operating Agreement Accounting. Revisions made to align with recent Manual 1 revisions. It clarifies metering language and defines a “fully metered EDC.”

Members Committee

Guerry Applauded at Final MC

In her final act as the chair of the Members Committee, EnerNOC’s Katie Guerry gave an emotional farewell, saying the two-year position “has been a wonderful thing that happened in my life.”

PJM CEO Andy Ott sat between her and Susan Bruce of the PJM Industrial Customer Coalition, who will transition from vice chair to chair in January. “I’m flanked by two very accomplished women,” Ott said, before reviewing the major issues Guerry presided over during her time in office. “Through all of that, I think you’ve done a fantastic job,” he said.

Ott presented her with a ceremonial gavel, and they shared a laugh about the inscription. He explained that it hadn’t been updated yet and still read “chairman’s gavel” as it did when she first took the position.

Guerry wasn’t fazed. “I only wanted the girls’ version if it was encrusted with diamonds,” she explained.

Elections

The Members Committee elected the designated slate of candidates to fill expired and vacated positions. O’Connell quickly cut off any potential for additional nominations by making a motion, which was seconded by Dan Griffiths of the Consumer Advocates of PJM States. The candidates were approved by acclamation.

Elected were:

• American Municipal Power’s Chris Norton, Dynegy’s Jason Cox and Calpine’s David “Scarp” Scarpignato to the Finance Committee.
• Lieberman, Bruce, Guerry, Gabel Associates’ Michael Borgatti and Public Service Enterprise Group’s Jodi Moskowitz as sector whips.
• Borgatti as the Members Committee’s new vice chair.

Preview of Security Committee Receives Tepid Response

PJM Chief Information Officer Tom O’Brien introduced plans for a new, non-decisional Security and Resiliency Committee. O’Brien said members of the public and the media will be barred from the sessions so that members can openly discuss sensitive security issues and potential solutions. External government and private sector attendees will be allowed by invitation only.

“It’s cutting across more than control systems,” O’Brien said. “It’s cutting into the Internet of Things.”

Jason Barker of Exelon said it’s an initiative his company sees as “a duplicative effort” it “struggles to support” because it “taxes limited resources that could be addressing concerns instead of attending another meeting.”

“The objectives are very broad. We struggle with how they’d be roped into something that is administratively efficient for us to staff and attend,” he said. “We don’t see where the topics you’ve just described are PJM-specific. … We see this as another place where we have to drag the same people who are having the same discussions elsewhere.”

To be truly non-decisional, he said, the charter’s key work activities would need to be modified to eliminate creating subcommittees or delegating assignments.

O’Brien said the point is “very well taken” about staffing. “That’s kind of how we got to where we are. The key is to have discipline around who staffs what,” he said.