Rules covering how PJM reallocates load when a load serving entity defaults can’t be found in the RTO’s manuals because, well, it doesn’t happen much.
But the collapse of two retail marketers after a spike in wholesale power prices during January’s arctic cold showed that load reallocation rules are needed, PJM officials told the Market Implementation Committee last week.
While there are mechanisms for collecting from other PJM members the $2 million in unpaid bills the two retailers left behind, what happens to the load the two companies had been serving is not clearly laid out in PJM’s rules.
Michelle Souder, of PJM’s member relations department, said PJM will add a new Section 3.2.4 to Manual 33: Administrative Services for the PJM Interconnection Agreement that covers this eventuality.
The new rules specify that PJM will notify the electric distribution companies delivering power to the retailer’s customer of the need to reallocate the load “as soon as such default is evident to PJM” and no later than the day the LSE is declared in default.
PJM will notify the EDCs by 10 a.m. the day after declaring an LSE in default whether the LSE has provided the funds to return to good standing. EDCs will not be required to reverse the load reallocation even if the LSE cures the default.
The manual language will be shared with the MRC later this month and presented to both groups for endorsement in May.
Bid Volume Limits
PJM is also considering a rule change that the RTO said would likely have reduced the size of the retailers’ January defaults.
PJM’s Hal Loomis outlined a proposal to prevent LSEs from entering day-ahead demand bids that are more than 20% and more than 10 MWs above their peak load forecast for the day.
“This would provide a way to keep inappropriately high demand bids from clearing,” including those resulting from data entry errors, said Loomis.
Had the proposal been in effect Jan. 7, at least 4% of demand bids would have been rejected, PJM said.
PJM will gauge the Credit Subcommittee’s interest in developing such a limit based on results of survey that closes today.