By Rich Heidorn Jr.

PJM Market Monitor Joe Bowring said last week that the RTO should exclude supply-side stakeholders from participating in the drafting of cost development guidelines that determine generator compensation.

Bowring, speaking at PJM’s annual Market Monitoring Unit Advisory Committee meeting Friday, said he is contemplating a filing with the Federal Energy Regulatory Commission in 2015 to push for the change.

“It’s an accretion of things that have built up,” he said. “We are pretty unhappy [with the current rules]. We’re saying generators shouldn’t have an effective veto right” regarding changes.

The cost development guidelines, which govern compensation for generators receiving cost-based rates, are contained in PJM Manual 15.

Bowring acknowledged that the manual is subject to sector-weighted voting at the Markets and Reliability Committee and must also win approval from PJM’s Board of Managers — the only manual on which the board votes.

But he said the primary motion brought before the MRC is the result of a skewed process at the Cost Development Subcommittee, at which there is no sector-weighting and where generator representatives can overwhelm other stakeholder factions.

The MRC considers as a “primary” motion the proposed solution that receives the highest vote total at lower committees. Proposals that receive at least 50% support at the lower committee may be offered as secondary proposals if the primary proposal fails to win a two-thirds sector-weighted vote.

Bowring said he would attempt to win support for the change through the stakeholder process but wasn’t optimistic about the chances of success. He said a FERC filing would not come before the middle of 2015 because of other pressing matters, including a FERC filing on proposed changes to the calculation of lost opportunity costs, expected in January. (See p. 21 of the State of the Market report for the third quarter of 2014.)

Bowring’s proposal found no immediate support among stakeholders in attendance. “I can’t see changing the voting approaches without disenfranchising somebody somewhere,” said Dan Griffiths, executive director of the Consumer Advocates of PJM States.

John Horstmann of Dayton Power and Light noted that the Cost Development Subcommittee hasn’t held a meeting since October 2013.  “I’m not sure I see the problem to the extent that you see it,” he said.

Disclosure of Market-Sensitive Information

Earlier in the meeting, Jeffrey Mayes, the Monitor’s general counsel, made a pitch for stakeholder support for protections against disclosure of confidential market-sensitive data through discovery in mergers and litigation.

Mayes said the Monitor had fought for tight restrictions on who could see data in the Exelon-Constellation merger and quashed a subpoena in a challenge to New Jersey’s Long Term Capacity Agreement Pilot program.

“If we hadn’t taken those steps [in the merger] almost everyone’s market information would have been made pretty public,” Bowring said.

Mayes said the Monitor’s position would be enhanced by explicit backing of PJM stakeholders.

“I would have been in a far better position if I could have a set of rules that had been worked out in advance and that members of the industry were behind,” Mayes said.

Mayes said PJM’s current rules “have a lot of process but not a lot of substance.” He said ISO-NE has a better definition than PJM of member confidentiality.

This proposal found a better reception among the members in attendance. “It certainly seems like something worth investigating,” said Dave Pratzon of GT Power Group, which represents generators.