FTR Bid Limit Increase Endorsed Under Fast Track Pathway

The PJM Market Implementation Committee on Wednesday endorsed a proposal to increase the maximum number of bids a single corporate entity can place in the RTO’s financial transmission rights auctions from 15,000 to 20,000.

PJM is seeking to make the change under its “quick fix approach” — which allows a proposed solution to be endorsed concurrently with its issue charge and problem statement — with the aim of having the change in place for the April 2023 auction. (See “PJM Considering Increasing FTR Bid Limit of 15,000 per Entity,” PJM MIC Briefs: Dec. 7, 2022.)

The increase is being considered based on requests from market participants and following the transition to weekend on-peak and daily off-peak class types, which effectively required traders to submit two bids to acquire or sell the same number of hours of an FTR as prior to the transition, according to the problem statement.

“We did feel this is sufficient for the type and volume of bids that we are seeing today,” PJM’s Emmy Messina said.

The proposal is set to go before the Markets and Reliability Committee on Jan. 25 for a first read, with a vote on endorsement slated for Feb. 23.

Stakeholders Disagree on Approach to Combined Cycle Modeling

Stakeholders deferred action on an issue charge and problem statement addressing the performance impact of expanding multi-schedule modeling to combined cycle generators in the market clearing engine (MCE).

Committee members were divided over what should be considered in the scope of the proposal, as well as whether the effort should continue before PJM releases a white paper it’s currently drafting outlining the bounds of a technically feasible solution.

PJM has an ongoing MCE software contract with General Electric, which is currently in the process of overhauling the programs it provides based on feedback and goals from the RTO, including the effort to expand multi-schedule modeling to combined cycle units. Currently those generators must mimic their operating characteristics in their offers.

Paul Sotkiewicz, E-Cubed Policy Associates | © RTO Insider LLC

Most of the division centered on PJM expanding the out-of-scope topics in its issue charge to include offer structures in its day-ahead and real-time energy markets and to the three-pivotal-supplier test. Those changes were sought by some stakeholders at the MIC’s December meeting and supported by PJM staff seeking to keep the discussion on a tighter time frame. (See “Feedback on Issue Charge, Problem Statement for Combined Cycle Modeling,” PJM MIC Briefs: Dec. 7, 2022.)

PJM’s Rebecca Carroll said GE is seeking guidance on how to proceed with making changes to the MCE by the third quarter of 2023. If stakeholders have not endorsed a system for multi-schedule modeling of combined cycle units by that point, GE will not proceed, she said. Under the current Next Generation Markets framework, the number of permutations that would have to be modeled for combined cycle units would not be solvable.

Paul Sotkiewicz, president of E-Cubed Policy Associates, who pushed for many of the changes PJM had made to its issue charge, said he would also like to see education from other system operators who have attempted multi-schedule approaches for combined cycle units and abandoned the effort because of the amount of time it would take.

David “Scarp” Scarpignato noted that this has been an issue discussed since PJM created a task force on generator modeling nearly a decade ago. Many of the questions raised in recent meetings have been answered in the materials created there, he said.

The Independent Market Monitor also presented its own proposed issue charge with a scope defined as pertaining to the process where software automatically chooses parameters where resources have local market power or during emergency and hot/cold weather alerts.