Energy Cap NOPR a hot topic at MRC

Above: Dave Anders, director – Stakeholder Affairs, with CFO Suzanne Daugherty, who has assumed her new role as chair of the MRC.

PJM reviewed at today’s Markets Reliability Committee meeting comments to  be filed Monday on the energy offer cap.  The Federal Energy Regulatory Commission called for grid organization comments to its Notice of Proposed Rulemaking.

The commission proposed that regional transmission organizations cap resources’ incremental energy offers to the higher of either $1,000 per megawatt-hour or the verified cost-based incremental energy offer.

While PJM is generally supportive of the NOPR, it has asked the FERC for clarity on cost-based incremental energy offers language and the applicability of the offer cap to demand response, according to Adam Keech, senior director – Markets Operations.Adam

“PJM will be addressing a number of questions posed by FERC, in addition to the validation of cost-based offers.  Our discussions with FERC indicate it is looking for feedback from the industry for a solution to implement across all RTOs and ISOs,” Keech said.

Keech said that because of the dynamic nature of the gas markets and the bilateral nature of many gas purchases, PJM recognizes that it will be impossible in many cases to definitively verify a cost-based offer.

PJM contacted other RTOs to see if there are areas of agreement in responding to the NOPR, and expects to file joint comments with Southwest Power Pool. The Independent System Operators and Regional Transmission Organizations Council is also expected to file comments.

Other business 

PJM also presented a first read on demand resource emergency energy measurement and verification. The proposal was on hold pending the Supreme Court’s decision on demand response. The Supreme Court found that the FERC has jurisdiction over demand response, effectively maintaining how demand response operates currently in the wholesale market. With the decision, PJM re-opened the proposal.

The MRC endorsed a proposal from the Governing Documents Enhancement & Clarification Subcommittee that eliminated redundant definition sections in the tariff, operating agreement and Reliability Assurance Agreement.

The committee also endorsed data confidentiality clarifications, which provide specific exceptions to confidentiality rules. These include releasing information on specific generation outages, the total amount of offered and cleared capacity resources when reporting on Capacity Market results, additional information regarding energy market uplift, demand response, three pivotal supplier test results and publically available information.

The MRC endorsed updated operating parameter definitions and performance assessment hour ramp rate. The Members Committee also endorsed the proposals at its meeting.