By Rory D. Sweeney

The PJM Board of Managers responded on Monday to accusations leveled by XO Energy in February, defending the grid operator’s practices and denying the up-to-congestion trader’s request that the board disregard rule changes on uplift recently endorsed by stakeholders.

In a long and strongly worded letter to the board, XO President Shawn Sheehan accused PJM staff of having bias against financial-sector stakeholders and actively working to undermine their interests. He was specifically concerned with how the process played out in the Energy Market Uplift Senior Task Force, which recently proposed a phased response to uplift issues. Those proposals were eventually endorsed at both the Markets and Reliability and Members committees. XO had asked that the board not act on the endorsements pending the outcome of FERC’s recent Notice of Proposed Rulemaking on uplift issues. (See UTC Trader Displeased with PJM’s Handling of Uplift Rule Changes.)

PJM CEO and board member Andy Ott responded to Sheehan’s claims in a much more reserved tone March 20, suggesting that Sheehan could meet with Dave Anders, the RTO’s director of stakeholder affairs, to discuss his concerns further. Ott defended the RTO’s stakeholder procedures, noting that it provided technical experts that offered “a significant amount of objective technical analysis” throughout the yearslong development of proposals from the task force.

“PJM’s role is to ensure the market remains efficient and competitive, and to provide analysis and justification if they believe certain market inefficiencies should be addressed,” Ott wrote. “I appreciate that some PJM stakeholders disagree with PJM’s conclusions in this regard, but such disagreements do not make PJM biased or negative toward any particular stakeholder group.”

Sheehan had suggested that PJM staff pushed stakeholders into approving the proposals and didn’t provide enough opportunity for engagement, but Ott noted that the process had been going on for more than three years.

“Clearly, abundant opportunity has been afforded to all stakeholders, including the financial community, to express views, persuade others and offer alternatives,” he wrote. “I can find no basis to adopt the extraordinary remedy you have suggested, which would table and disregard the expressed preferences of a very sizeable majority of the PJM members.”

The MRC and MC endorsed proposals for phases 1 and 2 of the uplift response. Proposals for a third phase are still being discussed at the task force level and haven’t been brought for discussion at any of the standing committees.