Compensating generating plants if needed to run beyond planned retirement

Two Tariff revisions filed in late December with the Federal Energy Regulatory Commission address resource adequacy for the 2015/2016 delivery year.

The Tariff changes (PDF) would allow PJM to compensate generating units for remaining in service beyond planned retirement dates for reasons other than transmission reliability issues. Currently, the Tariff only provides for compensating units that remained in service past the retirement date to allow transmission upgrades (required by the unit’s retirement) to be completed.

PJM is concerned about having sufficient resources during the winter of 2015/2016 given planned environmental regulation-related retirements and the record of generator unavailability last winter.

PJM is checking with generation owners to see if any retirements can be delayed (becoming a reliability must-run unit). To the extent that any can be, the Tariff change would provide for compensation, which would be set by the FERC. The compensation also could be available to new units in the queues that might be able to accelerate their construction schedules to come on line earlier, for example, a unit scheduled to be online June 1, 2016, that could be available in January 2016.

In a related second change, PJM is seeking a waiver from a Tariff requirement that it offer for sale in an incremental capacity auction previously committed capacity that is no longer required because the demand forecast has decreased. Because of the concerns about power supplies during the 2015/2016 delivery year, PJM does not want to release capacity it may need.