FERC on Thursday deferred making a decision on PJM’s proposal in response to a 2021 order directing the RTO to show cause as to why its rules regarding parameter-limited offers are just and reasonable (EL21-78).
The docket was on the agenda for the commission’s monthly open meeting, but was struck.
FERC had found that PJM’s tariff does not require that offers be selected to arrive at the lowest total costs based on parameter-limited offers, but instead requires that resources be committed based on the lowest-cost offers. It also found that the RTO’s governing documents did not appear to define what should happen if a generator fails to operate according to the parameters in its selected offer. (See FERC Issues Show-cause Order on PJM Parameter-limited Offers.)
“PJM is disappointed that FERC did not act on this show-cause order today,” RTO spokesperson Jeffrey Shields said. “PJM will continue, in the meantime, to work with generation owners to ensure that unit operating parameters are being updated in an effective manner to inform PJM Dispatch of generator availability, particularly during periods of cold temperatures during the upcoming winter.”
The RTO and its stakeholders have been eagerly awaiting a decision. On the day before the commission’s meeting, the PJM Markets and Reliability Committee opted to delay a vote on two competing proposals to define how offers will be selected under the multi-schedule modeling functionality the RTO is planning to add to its market clearing engine. PJM and its Independent Market Monitor had filed a joint motion for expedited action on Sept. 11, urging the commission to “issue an order as soon as practicable.”
Shields said it’s still expected that the MRC will move forward with a vote in December.
“PJM stakeholders voted to postpone the vote by one month, so a stakeholder vote is still scheduled to take place in December. While a FERC order in EL21-78 would have been informative, it is not necessary for stakeholders to proceed with a vote,” he said.
During the Electric Gas Coordination Senior Task Force meeting Nov. 14, Paul Sotkiewicz, president of E-Cubed Policy Associates, said real-time values — which the Monitor and PJM proposed to replace with temporary exceptions in response to the commission’s show-cause order — could be the “linchpin” of addressing the incongruities between the gas and electric markets.
The joint proposal would remove the deadline for submitting temporary exceptions by the close of the day-ahead market to allow them to be used in the real-time market as well.
“The simple solution is to … permit real-time submissions for temporary exceptions,” the Monitor wrote. “This would let resources communicate to PJM their changed operational capability without delay, while maintaining the tariff requirements and standard for review that protect against withholding.”
Monitor Joe Bowring told RTO Insider that real-time values would create a pathway for market sellers to notify and explain to PJM that they are unable to operate according to the schedule that they were dispatched and seek an exception from energy market penalties for not being able to do so. He said a similar capability already exists in the day-ahead market, but if a resource is affected by an issue affecting their performance in real time, no corresponding structure exists.
“What we were asking for is to expand the existing process into the real-time [market],” Bowring said.
The real-time values proposal would not interact with the capacity market and would not provide an exception from Capacity Performance penalties during a performance assessment interval, Bowring said.
