FERC found just one instance in which PJM failed to follow rules and procedures during a five-year timespan, according to a report released earlier this month on an extensive audit conducted on PJM’s operations.

PJM did not contest the finding, and RTO officials said in a statement that they were proud of the results.

“While we always strive for perfect compliance, this is an important achievement that reflects the incredibly strong culture of compliance at PJM and validates our emphasis on compliance in all aspects of our business practices and operations,” PJM CEO Manu Asthana said in a statement.

The audit examined PJM’s markets, operations and planning from January 2016 and May 2021 and its compliance with its own tariff and Operating Agreement, rules and practices, and FERC orders.

“The scope of this audit was enormous and touched many areas of our organization. It examined our compliance with thousands of pages of governing documents and required a significant investment of time and resources from PJM staff,” Asthana said.

Speaking during a Members Committee webinar Monday, PJM Assistant General Counsel Thomas DeVita attributed the length of the audit to the COVID-19 pandemic and PJM’s large size relative to other organizations. The commission typically audits RTOs approximately every 10 years, he said.

“That’s just an extraordinarily long period of time for an audit, even by FERC standards,” DeVita said.

The one instance FERC found was related to a failure to properly “offer cap a self-scheduled generation resource in the day-ahead energy market for 18 hours on Jan. 21, 2019, despite the fact that its owner had failed the three-pivotal-supplier (TPS) test.” It was caused by operators using outdated provisions of PJM’s tariff, which had been superseded by FERC filings, according to the report.

It recommended developing new written procedures and supplying staff with periodic training. The commission is also requiring PJM to conduct a study into whether resources of all generation suppliers that failed the TPS test were offer capped and provide the results to auditors within 90 days.

The report came with 20 recommendations in total, three of which were related to the noncompliance instance, but also focused on software issues, incentives to follow dispatch, day-ahead resource commitment and FERC Order 760, which requires data related to markets to be sent to the commission’s Office of Enforcement.

Chris O’Hara, PJM | © RTO Insider

An implementation plan for compliance with the recommendations is due Oct. 1. The commission is also asking for quarterly submissions to its Division of Audits and Accounting describing progress made on the recommendations.

PJM Chief Compliance Officer Chris O’Hara said in the statement that the RTO is already working on many of the improvements identified and will begin work on the remaining areas.

“The FERC audit report confirms not only PJM’s culture of compliance, but also PJM’s culture of teamwork,” he said. “This was an organization-wide effort, and we are proud of the results.”