PJM Regroups After Opposition to Request for Service on FERC Filings
VALLEY FORGE, Pa. —Facing stakeholder opposition, PJM officials last week withdrew what they hoped would be a routine rule change requiring that the RTO be served with FERC filings affecting it.
PJM attorney Steve Pincus told the Markets and Reliability Committee on Wednesday that the RTO sought the change to ensure it can respond within FERC’s deadlines to any filings that affect it or its members.
The RTO’s current rules require only that transmission owners serve it with any Federal Power Act Section 203 filings. The rules do not cover waiver filings, settlements or reliability-must-run requests, Pincus said.
“This is a really bad idea,” American Municipal Power’s (AMP) Steve Lieberman responded, saying PJM’s proposed issue charge was overly broad and would create burdens for members. He recommended the RTO attempt a “more surgical approach.”
“AMP has a team of people … that monitor the dockets that get filed. I don’t know why PJM can’t as well,” Lieberman said. Members might inundate PJM with irrelevant filings out of concern that a failure to serve the RTO could lead to a FERC enforcement action, he argued.
Constellation Energy’s Jason Barker said his company would support PJM’s problem statement even though it disagrees with the RTO’s proposed solution. He recommended the RTO convene a meeting of FERC practitioners from member companies to devise a solution.
Susan Bruce, representing the PJM Industrial Customer Coalition, agreed. “The lawyers need to be in the room for this,” she said. “We all have that risk [of missing a filing], and we all look at the Federal Register.”
Adrien Ford, of Old Dominion Electric Cooperative, suggested that, rather than the MRC, the matter be considered by a special task force, the Risk Management Committee or the Governing Document Enhancement & Clarification Subcommittee, as others suggested.
Pincus assured members that PJM was not attempting to create a “compliance trap” for them but a “safety net” for itself. “We obviously monitor FERC filings, but the territory we have to cover is far greater than any other member,” he said. “To me it seems like a no-brainer. It seems logical that PJM would receive service.”
But Pincus acknowledged he was unaware of any instances in which the RTO was denied the ability to file comments because of missed deadlines.
“It’s a solution in search of a problem,” said Paul Sotkiewicz, representing J-POWER USA.
In the face of the opposition, General Counsel Chris O’Hara told members that the RTO would withdraw its request to approve the issue charge pending additional discussions.
But he said the rule change was needed, calling it “unconscionable that a generation owner can make a 203 filing [affecting PJM] and not serve us.”
Independent Market Monitor Joe Bowring said he shares the RTO’s concern about not being served in relevant dockets. “Whatever the solution is for PJM, we would like to apply to us as well,” he said.
Revised Operating Committee Charter Approved
Members unanimously endorsed a five-word change to the Operating Committee’s charter to reflect the RTO’s changing generation mix. The revised charter adds the words “reliability attributes and pertinent conditions” to paragraph 7, which refers to the committee’s oversight of operating practices and procedures relating to reliability.
Stakeholders Wary of ‘Narrow’ Change to Market Seller Offer Cap
Members and the Monitor expressed concern over PJM’s proposal to revise the market seller offer cap (MSOC) in time for the 2024/25 capacity auction in December.
PJM’s Pat Bruno said what he called a “narrow” change to the MSOC “seemed to have a broad consensus with stakeholders,” citing discussions by the Resource Adequacy Senior Task Force (RASTF).
The change would address circumstances in which a unit with a positive CPQR value has that cost offset by an otherwise negative net ACR, which could result in a $0 offer cap.
Bruno gave an example of a wind farm with an ACR (excluding CPQR) of $80/MW-day, a CPQR of $20, and an energy and ancillary services offset (E&AS) of $150.
Under current rules, the generator would bid $0 ($80 + $20 – $150 = -$50). Under the proposed rules, the generator would offer at the CPQR: $20/MW-day.
“We think that’s consistent with how a market seller would set a competitive offer,” Bruno said.
PJM plans to seek endorsement of the change at the MRC’s meeting this month.
Jeff Whitehead of GT Power Group and Becky Robinson of Vistra said they support the change. But Bowring called the proposal “premature and inappropriate,” saying it would be a “significant redefinition” of the CPQR, undermining the capacity MSOC that protects against the exercise of market power.
“It’s not a problem that needs to be fixed,” Bowring said. “We haven’t had a $0 capacity clearing price, and we’re not likely to. But if we do, it would reflect competitive offers and a competitive outcome.”
Market sellers can include the cost of mitigating risk under the existing rules, Bowring said in an email after the meeting. He said although PJM has not defined CPQR in this proposal, the RTO has proposed a significant broadening of the definition of CPQR in RASTF meetings.
“If PJM wants to propose a change, PJM should make a proposal with all relevant elements clearly defined so that the full implications can be understood,” he said. “PJM has not explained why CPQR should uniquely not be part of gross ACR. PJM has stated, without explanation, that net revenues do not offset CPQR. That is not consistent with the definition of a competitive offer.”
AMP’s Lieberman also expressed concern, saying stakeholders should agree first on a definition of CPQR.
“Saying this is ‘narrow’ doesn’t make it so,” he said. “This is potentially setting a floor on the market seller offer cap.”
BRA Results Discussed
PJM’s Pete Langbein gave members a brief presentation on the results of last month’s 2023/24 Base Residual Auction.
Prices dropped by one-third to almost one-half in the auction, the first since the virtual elimination of the minimum offer price rule (MOPR) for subsidized resources and institution of a tougher offer cap. It was the RTO’s lowest prices except for 2012/13 and 2013/14. (See Low PJM Capacity Prices No Bargain, Coal & Gas Generators Say.)
Langbein said the Commonwealth Edison and Duke Energy zones didn’t bind, unlike in the prior BRA.
“We were concerned by the prices we saw,” commented Aaron Breidenbaugh, of Centrica Business Solutions. “It’s a disturbing trend if you’re on the supplier side.
PJM Senior Vice President of Market Services Stu Bresler said total capacity offered was about 11,000 MW less than in the previous auction.
PJM Sets Workshops on Extreme Weather NOPR
Ken Seiler, PJM’s vice president of planning, said the RTO will hold stakeholder workshops on July 21 and Aug. 12 on FERC’s June 16 Notice of Proposed Rulemaking on transmission planning performance requirements for extreme weather (RM22-10). The NOPR would direct NERC to modify reliability standard TPL-001-5.1 (Transmission system planning performance requirements).
FERC issued another NOPR on June 16 to solicit one-time reports from transmission providers detailing their “current or planned policies and processes for conducting extreme weather vulnerability assessments and mitigating identified extreme weather risks” (RM22-16, AD21-13). (See FERC Approves Extreme Weather Assessment NOPRs.)
