By Suzanne Herel
A pair of requests PJM submitted to the Federal Energy Regulatory Commission to safeguard capacity for the 2015/16 delivery year drew a number of protests last week, many calling the filings premature.
Fearing that it might run short due to retirements of coal-fired generation, PJM asked for a one-time waiver on rules that would otherwise require it to release 2,000 MW of capacity in the Feb. 23 third Incremental Auction for 2015/16 (ER15-738). (See PJM Seeks Waiver on Capacity Release.)
It also proposed revising its Tariff to allow it to enter into capacity agreements made outside the Reliability Pricing Model auctions (ER15-739). FERC granted a request from the PJM Power Providers Group for more time to file comments on the filing, extending the window by six days to Jan. 20.
Dominion Resources, commenting on behalf of Dominion Virginia Power, urged the commission to restrict PJM’s waiver request to the amount necessary to alleviate concerns about winter resource adequacy. “The commission should not grant PJM’s request with respect to any summer capacity because it is unnecessary to sustain the established [installed reserve margin] during the delivery year, and thus would impose unnecessary costs on participating loads.”
Old Dominion Electric Cooperative, a coalition of PJM utilities and the Independent Market Monitor commented in support of the waiver. The Electric Power Supply Association, whose legal challenge of FERC Order 745 has raised questions about the future of demand response, also indicated its support. (See related story, FERC Files EPSA DR Appeal with Supreme Court.)
In its assent, ODEC cited an “atypical confluence of uncertainty caused by the pending EPSA litigation in the face of larger-than-normal retirements due to impending compliance deadlines for new [Environmental Protection Agency] rules.”
The utilities coalition — American Electric Power, Dayton Power and Light, FirstEnergy, East Kentucky Power Cooperative and Buckeye Power — said the waiver would “prevent the abuse of capacity market arbitrage opportunities by demand resources.”
For its part, EPSA commented that the one-time waiver posed fewer market-distorting effects than other approaches to retain capacity.
PJM’s request to revise its Tariff met with more opposition.
ODEC opposed that filing, saying it was “based upon uncertain and premature analysis of reliability which cannot occur before the third Incremental Auction.”
EPSA concurred, noting the request represented “a clear departure from competitive market approaches to ensure reliability for PJM.”
While the Independent Market Monitor showed support for the idea, it cautioned: “The prudence of a particular purchase, and the terms and conditions of any such purchases, should be subject to careful review against defined standards.”