PJM stakeholders are requesting that the Board of Managers provide more information about its initiation of a fast-track process to address reliability concerns, which it announced in a letter published last month.

“This is not giving us any clear direction … and I think that we’re going to waste a lot of time if we don’t get some clear direction,” Paul Sotkiewicz, president of E-Cubed Policy Associates, said during the Feb. 28 meeting of the Resource Adequacy Senior Task Force.

The board released the letter Feb. 24 in response to “numerous data points suggesting that grid operators may face challenges in maintaining reliability during the transition,” as shown in a white paper released by PJM the same day detailing an imbalance between future resource development and retirements through the rest of the decade. (See PJM Board Initiates Fast-track Process to Address Reliability.)

Invoking the Critical Issue Fast Path (CIFP) stakeholder process, the board identified a set of key work areas it would like to see addressed by proposals for it to consider and potentially send to FERC by Oct. 1.

The four primary areas the board identified include revising the Capacity Performance (CP) model and ensuring any penalty risks can be accounted for in capacity offers; improving resource accreditation to ensure that reliability contributions are accounted for and compensated; enhancing risk modeling to improve understanding of winter risk and correlated outages; synchronization between the Reliability Pricing Model and the fixed resource requirement rules to ensure that supply and demand are held to comparable standards.

Steve Lieberman of American Municipal Power said the letter is eliciting a lot of questions from stakeholders and it would be beneficial for representatives of the board to attend one of the upcoming Markets and Reliability Committee meetings to set the grounds of what they’re looking for in a solution package.

“If we’re going to be jumping through hoops for the next six [or] seven months, let’s make sure we’re jumping through the right hoops,” he said during the RASTF meeting.

Vice President of Market Design Adam Keech said PJM’s understanding of the board’s intent with the letter was to avoid steering stakeholders in the direction of a specific solution, but to identify areas of importance that a solution must address.

“I think this is the scope we have to work with, and it was written for this reason,” he said.

Going through the work areas, Keech noted that many of them have long been under discussion by stakeholders before giving PJM’s interpretation of each of them. Regarding any changes to the CP construct, he said the board believes any risk generators face from penalties should be reflected in their market seller offer cap.

“I see the board saying ‘review CP’ in terms of Winter Storm Elliott and the market seller offer cap,” he said. In the wake of the December 2022 storm, PJM announced that generators could face $1 billion to $2 billion in CP penalties, which has prompted many generators to say they are not adequately able to incorporate the risk of future penalties in their capacity offers. (See PJM Weighs Options for Winter Storm Elliott Follow-up.)

Keech said PJM believes the board wants to incorporate growing risk during winter months into the calculation of reliability requirements.

He also said PJM is likely to pursue a marginal accreditation framework for its effective load-carrying capability method, whereas it currently uses an average, though he acknowledged stakeholders can opt to move in a different direction.

Part of the board’s letter noted that it is interested in exploring if any changes made can be implemented before the 2027/28 Base Residual Auction. But state consumer advocates said any delays to future capacity auctions could interfere with states that procure their own capacity.

“I know that is a concern for at least some of the auctions: further delays and how that affects state auctions,” said Greg Poulos, executive director of the Consumer Advocates of the PJM States.

David “Scarp” Scarpignato said he would like to see additional information about the impact auction delays could have on states at future meetings. He also encouraged PJM to create a framework for presenting the particulars of any proposals that may come forth in an easier-to-read format than the matrix that is typically used, predicting that the process of drafting packages is likely to be “unwieldy.”

“I don’t think someone is going to be able to read a 100-line matrix and understand what it’s saying,” he said.

PJM’s Dave Anders gave an overview of a target roadmap for drafting and voting on packages, with first reads anticipated in June and votes at the MRC and Members Committee in August and September, respectively. Anders and Keech told the task force that the RTO plans to present a draft problem statement, issue charge and proposal, with a target posting date of March 13.

The Market Implementation Committee will continue the discussion of potential auction delays during its March 8 meeting, as well as at the March 15 RASTF.