By Amanda Durish Cook

CARMEL, Ind. — MISO’s Independent Market Monitor said Wednesday that PJM has for years been committing two market-to-market operations errors that have possibly cost MISO millions of dollars.

Monitor David Patton contended that PJM has been “overstating” its response to transmission loading relief (TLR) requests and — more seriously — failing to order mandated tests required to define M2M constraints between the two RTOs.

As a result, PJM’s neighboring balancing authorities have been forced to make up for the RTO’s TLR shortfall and spend more on congestion, incurring costs they are not likely to recover.

Neglected M2M Constraint Test

The test cited by Patton uses real-time system topology to measure the congestion generating resources in a non-monitoring RTO (in this case MISO) contribute to a PJM flowgate, and is mandated by the joint operating agreement between the two RTOs.

“This has not been instituted since it was introduced, which I don’t know, is a decade or more,” Patton said during a Nov. 29 Joint and Common Market meeting between MISO and PJM. “It was an error that was known and is a serious violation of the JOA.”

PJM Director of Energy Market Operations Tim Horger said his RTO is still examining the potential impacts of failing to request the tests but cautioned against labeling the failure to act a Tariff violation.

“PJM is not in a position to say that by not requesting the study it is in a Tariff violation,” Horger said.

“That’s a FERC determination,” Patton agreed.

It would be “very difficult to quantify the impacts” of PJM’s neglected tests, Patton said, but he thinks they explain some of the past gaps his monitoring firm has observed in M2M coordination. The Monitor’s 2016 State of the Market report showed that substantial volumes of congestion were not coordinated because constraints were not properly identified as being M2M. From January 2016 to October 2017, Patton detected $341 million worth of congestion on constraints that should have been coordinated by PJM.

“Not all of this amount is due to this violation of the JOA; some are likely due to simply not testing constraints or not testing them in a timely manner,” Patton said.

But in consistently failing to evaluate constraints affected by its neighbor’s generators, PJM couldn’t capture transmission outages, “frequently the cause of severe binding constraints,” he said.

“Not only did this undermine efficient dispatch and congestion management, but [it] also effectively granted PJM an unlimited entitlement to MISO transmission” because it did not test for constraints causing congestion, Patton said.

He added that it would be impossible to eradicate all congestion from MISO and PJM’s M2M coordination.

“We know that some of this uncoordinated congestion in MISO is because some constraints weren’t requested to be identified. To be honest, we think that all issues that prevent a constraint from being quickly identified are problematic,” Patton said.

PJM Miscalculation

Patton also contended that PJM’s TLR calculation — which enables MISO, PJM and SPP to acknowledge and receive credit for relief provided during TLR procedures — has been incorrect since 2009. MISO first noticed PJM’s error in September, when binding constraints during TLR procedures in the Tennessee Valley Authority area alone boosted MISO Midwest real-time monthly average prices by almost 8%, according to Patton.

“This has been very costly for MISO because MISO has incurred extreme costs attempting to provide the relief requested in response to a TLR,” Patton said. “If it raised the relief obligation that MISO had, we’re talking a lot of money.”

MISO officials believe PJM has since corrected the problem, although they continue to investigate.

Patton and MISO seams management expert Ron Arness said no precedent exists for resettling energy prices because of TLR errors, but the Monitor thinks the impact could easily reach into the millions of dollars.

“In any particular month, the cost may not be big, but this has been happening for years,” Patton said.

Horger pointed to the challenge of resettling prices influenced by TLRs.

“If after investigation, PJM decides that prices were affected, that doesn’t change the fact that the dispatch reflected the generation movement [in response to TLRs]. That’s a dangerous slope,” he said.