The PJM Deactivation Enhancements Senior Task Force (DESTF) has delayed voting on five proposals to rework the RTO’s rules for the advance notification generation owners must provide before deactivating units and the compensation structure for resources offered reliability-must-run (RMR) contracts.

Following several major changes to proposals presented during the group’s Oct. 2 meeting, participants requested additional time to understand where each package stands. An additional DESTF meeting was scheduled for Oct. 17 to open the vote, which will be conducted on the PJM website after the meeting closes. The Independent Market Monitor, Sierra Club and Calpine have each sponsored proposals in the DESTF, while PJM has sponsored two packages, one of which was presented for the first time Oct. 2.

The most significant changes were made to the Monitor’s proposal, with new language added that would model the expected output of RMR units in the capacity supply stack — counting them toward meeting the reliability requirement without mandating that they offer into Base Residual Auctions (BRAs) and take on Capacity Performance (CP) obligations

Monitor Joe Bowring has argued that not including RMR resources in the supply stack is inconsistent with PJM’s practice of modeling their output when calculating the capacity emergency transfer objective (CETO) and limit (CETL) for different delivery areas. Under the Monitor’s proposal, RMR resources would not be included in the day-ahead or real-time energy markets nor ancillary services unless required to maintain transmission reliability or resource adequacy. (See PIO Complaint Faults PJM Treatment of Deactivating Generation.)

Anti-toggling rules were also added to the Monitor’s package, stating that if a RMR unit ultimately decides not to deactivate after the contract term has begun, it would be required to refund capital recovery for improvements and maintenance to the appropriate load-serving entity.

The compensation rate in the Monitor’s package was adjusted to be based on short-run marginal costs (SRMC) rather than megawatt-hours, and an applicable adder of 10% of the deactivation avoidable cost rate was also added. Actual revenues would be the market revenues the RMR resource receives, such as energy and ancillary service payments, minus the SRMC for the unit.

A limit to the duration of RMR contracts was proposed by the Monitor, capping them at five years with a possible three-year extension. Any requests for an extension would have to be presented to the PJM membership at least a year in advance, where practical, so stakeholders can explore alternative solutions to resolving the underlying transmission violations.

PJM’s Package A pointed to the IMM’s language defining the compensation rate and would allow generation owners to choose between the Monitor’s net revenue compensation approach or the status quo cost-of-service option.

All five proposals would require generation owners to provide PJM with at least one year’s notice ahead of their desired deactivation date, while the RTO’s proposals contain exceptions for units that must retire to comply with government policies and catastrophic failures. PJM also added language granting exemptions for the requirement that resources must offer into capacity auctions for years when the unit would be granted deactivation.

The Monitor’s proposal includes exceptions for failures and a “clear regulatory order to retire,” which is mirrored by the Calpine package. The Sierra Club would allow early deactivation, within the one-year notification period, if PJM determines that there would be no reliability issues created by the retirement, along with catastrophic failures and policies that would make the resource uneconomic.

PJM also introduced a new Package D aimed at compromising with some of the changes made to the Monitor’s proposal. It would remove the $2 million limit on project investment costs recoverable through the default compensation rate and rework the default avoidable cost credit (DACC) calculation when it is used for determining compensation. Other components are based on Package A.

David “Scarp” Scarpignato, of Calpine, said it would be inappropriate to move to a vote immediately after major changes were presented to proposals that could change stakeholders’ voting positions. Several changes would also need to be made to the Calpine proposal, which contained references to the original IMM and PJM packages for some components.

Calpine’s proposal would preserve the status quo compensation rate with a 20% applicable adder and adopt the Monitor’s components on actual revenues, RMR term limits and requiring RMR agreements to be public. The company copies PJM’s language on notification timelines. Calpine’s anti-toggling rules would require an RMR unit that reverses its retirement during the RMR term to refund LSEs for payments toward capital improvements. The requirement would also be effective for units that return to serve two years after deactivation.

The Sierra Club proposal largely mirrors the Monitor’s language, but it would subject RMR units to CP penalties for underperformance with an annual stop-loss set at the BRA clearing price per megawatt.

Package sponsors discussed both notifying other parties with proposals of any significant changes ahead of the Oct. 17 meeting and replacing cross-package references with specific language to avoid repeat conflicts. There were also requests for PJM to draft a document or presentation that details the differences between each proposal.