By Rory D. Sweeney

VALLEY FORGE, Pa. — With a myriad of proposals emerging to revamp PJM’s capacity market, stakeholders are focused on what the RTO will do, but staff aren’t tipping their hand.

Attendees at Tuesday’s meeting of the Capacity Construct/Public Policy Senior Task Force (CCPPSTF) peppered PJM’s Stu Bresler with questions about his plans should stakeholders decide, after nearly a year of discussion, that the capacity market is better in its current design than anything else proposed. The RTO has proposed a two-stage “repricing” process that would ignore units that don’t clear the initial auction but clear in a second auction in which subsidized units are removed. Those so-called “in-between” units still wouldn’t receive a capacity commitment. (See NOVEC Offers 10th Capacity Proposal.)

Stakeholders fear that, short of a clear mandate on which proposal to file with FERC for approval, PJM plans to file its own rather than maintain the status quo. They pressed Bresler to at least hint at PJM’s inclination, but he repeated that he would not be able to “definitively say” what staff will recommend to the Board of Managers by the next meeting of the task force on Oct. 16.

“It depends on too many factors,” he said. “We need to defend our markets.”

“It puts us all in the same predicament because we’re all trying to prevent something that we don’t really want to happen, and that is to have a unilateral filing made. We really want to avoid that,” said John Rainey of Northern Virginia Electric Cooperative (NOVEC).

Rainey said the “quandary” is that PJM has requested stakeholders declare their preferences among the proposals without indicating “whether status quo is a viable option.”

IMM Plan Leads Poll

Earlier in the six-hour discussion, the latest of 18 such meetings since March, attendees reviewed the results of a long-awaited poll on 10 proposals. The Independent Market Monitor’s extended minimum price offer rule (MOPR) proposal received the most overall support with a weighted average of 2.74. The three main two-stage “repricing” proposals from PJM, LS Power and NRG Energy received the next-highest levels of support of 2.05, 1.86 and 1.9, respectively.

The results also broke down how well the proposals addressed certain criteria, such as removing the price impact of a subsidy or driving a competitive outcome. The Monitor’s proposal received the most support in all but one question: whether it accommodated state initiatives. There, PJM’s design narrowly edged the other repricing proposals.

Four non-members also submitted responses. Their votes, which were presented separately from the member results, heavily favored a proposal from the Natural Resources Defense Council that would reduce the capacity requirement to the needs of the off-peak season and allow seasonal resources to account for the additional demand during the peak season.

Stakeholders complained that the structure of the poll was restrictive, so they provided comments to add nuance to their votes. However, PJM’s stakeholder process purposefully withholds any comparison to the status quo until stakeholders have chosen an alternative proposal on which to vote.

Strong Support for Status Quo

Some stakeholders, however, have already made up their minds.

“We’ve given this a huge amount of consideration,” said Carl Johnson, who represents the PJM Public Power Coalition. “How do we get across that we think that the current process is still the best process?”

Representatives from the Consumer Advocates of the PJM States and Old Dominion Electric Cooperative also said they preferred the status quo.

For the first time, the group hosted a substantial contingent of state representatives. In addition to Ruth Ann Price from Delaware’s Division of the Public Advocate and John Farber of the Delaware Public Service Commission, who are often involved in stakeholder meetings, the audience included Bill Fields from the Maryland Office of People’s Counsel, Kristin Munsch of the Illinois Citizens Utility Board and Brian Lipman from the New Jersey Division of Rate Counsel.

Lipman said his office’s understanding was that PJM is “going to file something,” which would indicate a change, and that the poll didn’t make it “obvious” how to indicate support for the status quo.

PJM’s Dave Anders, who administers the task force, acknowledged the complaints but declined to suggest any implications from the poll.

“I achieved consensus in a very difficult committee: Nobody liked the poll,” he said. “You’re all entitled to your interpretation of the results. I’m not trying to lead you [to any conclusions].”

Several stakeholders said their frustration was aimed at the topic, not Anders.

“Don’t take this as a knock on the poll design,” Johnson said. “I think it was a useful exercise, even though I didn’t want to do it. … Sometimes you can’t tease [your specific wishes] out until you have to make a decision about a question that’s right in front of you.”

NRG’s Neal Fitch asked that the poll results be used to “winnow down” the proposals still in contention to focus attention on viable candidates. PJM’s Adam Keech agreed that “maybe that’s a good place to start,” but Steve Lieberman of American Municipal Power, whose proposal polled near the bottom, cautioned against becoming narrowminded.

“Let’s be careful about latching onto one side,” he said.

To begin narrowing the options, Adrien Ford withdrew ODEC’s proposal, which took a different approach to the repricing concept, but also didn’t want to limit the focus.

“I struggle to agree that we should focus on the repricing proposals,” she said.

A Poll, not a Vote

Stakeholders also differed on how to treat non-member poll results. Calpine’s David “Scarp” Scarpignato said it “doesn’t mean much in regards to a pass/fail vote at the senior committee level.” Direct Energy’s Marji Philips said examining the results of an anonymous, four-voter poll is “inappropriate” and “could actually distract from the conversation.”

However, EnerNOC’s Katie Guerry said “it’s actually helpful to see what non-members think” in comparison to member preferences. “It’s so different,” she said.

Farber reminded stakeholders that “this is a poll, not a vote,” and that they should consider “the optics” of saying non-members can watch but not express opinions.

Anders requested that proposal sponsors indicate for the next meeting whether they intend to withdraw their proposal and, if not, to update the stakeholder matrix and develop a presentation with any changes. He also requested an “executive summary” describing the proposal.

“I don’t want a book. I don’t want 20 pages, but I want enough,” he said.