By Rory D. Sweeney
VALLEY FORGE, Pa. — PJM said last week that a court ruling remanding a FERC order on the RTO’s minimum offer price rule won’t have any impact until the commission addresses the decision. And it may have little practical impact even after that, PJM’s Jen Tribulski told the Market Implementation Committee on Wednesday.
The July 7 ruling from the D.C. Circuit Court of Appeals said the commission overstepped its authority when it denied a 2012 proposal from PJM to revise its MOPR provisions but then spelled out to the RTO what it would approve. PJM’s proposal — a compromise between generators and load-serving entities — would have replaced the unit-specific MOPR exemption with two new ones and extended the mitigation period from one to three years before a unit could bid below the price floor.
Compromise Eliminated
FERC said it would accept the additional two exemptions if the unit-specific review were retained and the mitigation period remained unchanged. PJM agreed to FERC’s changes even though it eliminated the deal PJM stakeholders had made to secure stakeholder endorsement of the proposal. (See PJM MOPR Order Reversed; FERC Overstepped, Court Says.)
FERC’s ruling was vacated and remanded back to the commission, which must now write a new order for PJM. That can’t happen until the commission restores its quorum. (See related story, Trump Names Energy Lawyer McIntyre as FERC Chair.)
“The court really only ruled on the legal issue of whether FERC exceeded its authority under Section 205,” Tribulski said. “Until those rules are changed on remand, that’s our filed rate.” She acknowledged suggestions from stakeholders to revert to the previous rate or to PJM’s original proposal, but she said neither of those are appropriate because they are not what is currently approved by FERC and the court didn’t entirely vacate that approval.
PJM also isn’t planning to revise any auction results unless FERC orders a rules change. “We will wait to see what FERC does,” Tribulski said.
Gabel Associates’ Mike Borgatti asked how this might impact generators’ decision-making for filing exemptions, given that the exemptions for the 2018 Base Residual Auction must be requested by the end of this year. It will be at least until Aug. 28 that the ruling is even remanded to FERC, Tribulski said, noting a 45-day appeals period and another seven days following that for the order to become official. That also assumes the commission will have a quorum by then and be caught up on its existing backlog of filings.
‘Less than Meets the Eye’
She said there also might be “less than meets the eye here” because there haven’t been any unit-specific exemptions approved while the vacated rules have been in effect. Unit-specific exemptions are the part of PJM’s original MOPR proposal that FERC denied and recommended should be retained. “There may not be that big of an actual, practical impact,” she said.
Exelon’s Jason Barker said that as PJM is considering what parts of the ruling haven’t been vacated, the RTO needs to be aware that stakeholders still wouldn’t have had an opportunity to comment on them, which was a key part of the appeal.
“When FERC ‘imposes an entirely new rate scheme’ in response to a utility’s proposal, the utility’s customers do not have adequate notice of the proposed rate changes or an adequate opportunity to comment on the proposed changes,” the court said. “That was the case here.”