PJM last week updated stakeholders on its progress in collecting up to $2 billion in non-performance penalties from capacity sellers who did not meet their obligations during Winter Storm Elliott.
In a filing submitted to FERC Feb. 2, PJM sought approval for a tariff amendment that would allow those charged with capacity performance (CP) penalties to elect to extend their billing period up to nine months when the charges are levied near the end of a delivery year (ER23-1038).
Under current practice, PJM typically takes three months to send out penalty notices after a performance assessment event (PAI) in which generators do not meet their capacity obligations. The penalties must then be paid by the end of the delivery year.
The Winter Storm Elliott PAI event, which occurred at the end of 2022, would leave generators about three months to make the payments, exacerbating concerns that the scale of the penalties could lead to defaults. (See PJM Gas Generator Failures Eyed in Elliott Storm Review.)
PJM’s proposal would allow for the RTO to extend the billing period when the timing of the determination of the charges would leave fewer than six months to make payments, with the tradeoff of any payments made in the next delivery year being subject to interest at the FERC prevailing rate.
Since both options carry downsides, neither is being considered the default and PJM is asking those assessed penalties to notify staff of which billing timeline they are opting for by March 17, PJM CFO Lisa Drauschak said during a Feb. 8 presentation to the Market Implementation Committee. The RTO’s FERC filing requests an order by April 4 to potentially allow for the new system to be put in place before stakeholders elect their timelines.
Drauschak said PJM hopes that extending the time for making payments will maximize the RTO’s ability to collect non-performance charges while reducing the reliability risk from a significant number of resources defaulting and leaving the capacity market.
PJM released preliminary unit-specific data on CP charges and bonuses to relevant generators on Friday; however, Drauschak said the RTO does not usually publicly release preliminary aggregate figures.
Constellation’s Jason Barker said he was disappointed that PJM has yet to release a more refined estimate of the total expected penalties, adding that he’s unconvinced by PJM’s argument that it hasn’t been past practice given the magnitude of the emergency.
PJM Changes Data Collection System
PJM is allowing generation owners to revise their ticket submissions in its eDART outage reporting tool, which the RTO’s Dan Bennet said is used to derive CP performance data and the scale of any non-performance charges applicable for a given resource. Bennett presented to the Operating Committee on Feb. 9.
“We rarely make retroactive ticket changes, but given the nature of this event, … we wanted to make sure the data was accurate,” he said.
After reviewing data submitted to eDART and NERC’s Generating Availability Data System (GADS), the RTO and its Independent Market Monitor have found a wider difference than expected. While some discrepancy is to be expected given the real-time nature of eDART and the more precise data entered into GADS after an event, the usage of eDART data in determining performance charges makes accuracy crucial.
Calpine’s David “Scarp” Scarpignato said that in the heat of events, generation operators often enter data at control centers rather than at the individual units and tend to be more conservative in representing their outages to ensure compliance.
Several stakeholders reported having trouble with updating their eDART data; PJM recommended that anyone running into issues reach out to its staff and the Monitor.
PJM has also opened a new SharePoint site to submit unit-specific inquiries and documentation regarding performance during the 277 PAIs over Dec. 23-24. PJM’s Melissa Pilong recommended that submissions be made prior to March 6 to give PJM time to respond prior to the start of the billing period.
