erators to pay for the installation of phasor measurement units (PMUs).

The Planning Committee approved the changes March 7, rejecting an alternate proposal to have PJM cover the cost. PMU data can enhance grid reliability for both real-time operations and planning applications.

Planning Committee Votes to Bill Generators for PMUs
3. Commodity Futures Trading Commission (CFTC) Exemption Order (9:25-9:55)
The committee will be asked to endorse the changes to the Operating Agreement and Tariff to comply with conditions in the Commodity Futures Trading Commission order exempting most PJM market participants from CFTC jurisdiction.

The CFTC agreed March 28 to largely exempt from its regulations Financial Transmission Rights, day ahead and real time energy transactions, forward capacity transactions and reserve regulation transactions, sales that are already regulated by the Federal Energy Regulatory Commission. However, the CFTC said the exemption did not apply to financial market participants that cannot qualify as “appropriate persons” under the Commodity Exchange Act (CEA). PJM responded April 7 by announcing it may deny trading privileges to as many as 55 small market participants if they are unable to qualify for the exemption. PJM said the change was necessary for the RTO to avoid being deemed a swap dealer and becoming subject to CFTC reporting requirements.

The changes being considered expand financial marketers’ officer certification requirements.

PJM Delays Action on CFTC Order

CFTC Approves Dodd-Frank Exemption for RTOs

PJM May Bar Some Financial Players from Trading
4. Up-To Congestion (UTC) Transaction Credit Requirements (9:55-10:10)
The committee will be asked to endorse credit requirements for up-to-congestion (UTC) transactions.

UTC trading volumes have grown dramatically since 2010 but there are no credit requirements to protect market participants against defaults. Bid screen and cleared portfolio credit requirements are based on a percentile of the difference between each member’s bid or cleared price and the two-month rolling average of real-time value per path.

MIC OKs UTC Credit Requirement
5. PJM Manuals (10:10-10:30)
The committee will be asked to approve the following manual revisions:

A. Electronic Notifications for Curtailment Service Providers: Changes to Manuals 1 and 18 will implement an automated process that will allow Curtailment Service Providers to provide operational data to — and receive dispatch instructions from — PJM. The new Load Response System (eLRS) process replaces the current manual methods, which rely on email and spreadsheets.

Manual Changes to Implement Electronic Notification System

B. Residual Zone Pricing: Residual Zone Pricing will replace physical zone LMPs for real-time load effective June 1, 2015. A Residual Zone is an aggregate of all load buses in the physical zone, excluding load priced at nodal locations. The change was endorsed by the Members Committee in February 2012 and approved by FERC in Docket ER13-347.

Manual, Tariff Changes: Residual Zones, EKPC, Loss of Internet, Regulation Market

C. East Kentucky Power Cooperative: PJM needs to add the East Kentucky Power Cooperative zone into PJM markets manuals to accommodate the coop’s integration into PJM effective June 1.

Manual, Tariff Changes: Residual Zones, EKPC, Loss of Internet, Regulation Market

D. NERC Reliability Standards: PJM needs to amend M-36: System Restoration to reflect NERC Standards EOP-005-2 (System Restoration Plans) and EOP-006-2 (Reliability Coordination – System Restoration).  Updates for consistency with other RTOs; updates underfrequency load shed tables; incorporates recommendations from RFC/SERC audit, and adds specific references to transmission operator restoration plans.

E. Manual 03A:  Energy Management System (EMS) Model Updates and Quality Assurance:
The changes include numerous edits for updates and clarity.

Manual 03: Transmission Operations

F. Regulation Market Cost-Based Offers:  New rules implemented in October require regulation offers to include capability (cost, in $/MWh to reserve a resource for regulation) and performance (costs of tracking the regulation signal in miles/MW).  Previous rules, as defined in Manual 15, did not include performance costs.

Manual, Tariff Changes: Residual Zones, EKPC, Loss of Internet, Regulation Market

G. Manual 35: Definitions and Acronyms: Adds language to Economic Maximum and Economic Minimum definitions; changed Operations Analysis Working Group to Operations Assessment Working Group; Replaced TTV4TF (TO/TOP Version 4 Task Force) with TTMS (TO/TOP Matrix Subcommittee).

H. NERC standard PRC-023-2: Updates to Manual 14B: PJM Region Transmission Planning Process are required to implement standard PRC-023-2 (Transmission Relay Loadability). PJM annually develops transmission facility list to comply with NERC criteria.

I. Manual 03: Transmission Operations: Semi-annual update to incorporate procedural changes.
Recess (10:30-11:15)
The MRC will recess for a brief Members Committee meeting to finalize revisions to the OA and Tariff regarding the CFTC Exemption Order and the UTC credit requirements (#s 3 and 4 above).
6. FTR Forfeiture Rule Changes (11:15-11:30)
MRC will be asked to approve a manual change documenting the Market Monitor’s current application of the FTR forfeiture rule on increment and decrement transactions and a problem statement to determine how the rule should be interpreted in the future.

PJM discovered only recently that it disagreed with the criteria by which the monitor has been determining whether a company’s virtual bid is “at or near” the delivery or receipt buses of its FTR.

The monitor has been applying the penalty based on the net impact of virtual bids, triggering its application in less than one-tenth of 1% of trades. PJM proposed a different calculation under which companies would lose any profit for an FTR if 75% or more of the energy injected or withdrawn by a virtual bid is reflected in a constrained path between FTR source and sink.

Back to the Drawing Board on FTR Forfeitures For Incs, Decs
7. Energy Market Uplift Costs (11:30-11:45)
MRC will be asked to vote on a proposed problem statement that would create a senior task force to take a broad review of its method of providing Operating Reserve payments. PJM said changes are needed to reduce growing uplift costs.

Operating Reserves are “make whole” payments that ensure generators dispatched out of merit for system reliability don’t operate at a loss. Because they are collected through uplift charges and not reflected in day-ahead or real-time locational marginal prices, they cannot be hedged.

PJM Proposes Operating Reserve Changes to Cut Uplift
8. Minimum Offer Price Rule (MOPR) Compliance Filing (11:45-12:00)
PJM will provide a summary of PJM’s compliance filing in response to FERC’s May 2 order on the Minimum Offer Price Rule (ER13-535). FERC allowed PJM to exempt two categories of resources from MOPR but denied its request to eliminate its current unit-specific review.

Split Decision on MOPR
First Readings:
9. MOPR Unit Specific Exemption (12:45-1:00)

10. FTR Modeling Proposals (1:00-1:30)

11. Suspension of Day-Ahead Market for Loss of Internet (1:30-1:45)

12. Regional Planning Process Task Force (RPPTF) (1:45-2:15)

13. Demand Response Problem Statement (2:15-2:30)

14. Gas Electric Senior Task Force (GESTF) (2:30-2:45)

15. Tariff and OA Errata (2:45-3:00)

16. Replacement Capacity (3:00-3:15)

17. Transparency of TO Calculations (3:15-3:30)

18. PJM Manuals (3:30-3:45)
Future Agenda Items (3:45)]>