Interactions with the Federal Energy Regulatory Commission peppered the agenda at the Market Implementation Committee meeting Nov. 2, as stakeholders engaged on fuel cost policy processes, Five-Minute Settlements Order 825 and the FERC’s financial transmission rights order.
In addition, PJM announced that it has received a settlement in the outstanding case against the former Lehman Brothers, stemming from the financial institution’s 2008 collapse. PJM will receive $17 million to distribute to members.
Fuel Cost Policy Process
The committee endorsed PJM’s proposed revisions to Manual 15: Cost Development Guidelines, regarding the fuel cost policy approval process. The revisions are contingent on approval of PJM’s compliance filing with the Federal Energy Regulatory Commission related to hourly offers and the fuel cost policy approval process.
Among the changes:
- Market sellers would submit fuel cost policies to PJM and the Independent Market Monitor simultaneously,
- Market sellers must have a PJM-approved fuel cost policy in order to submit a non-zero cost-based offer,
- Collaborative review process of the fuel cost policies that will allow for increased transparency and deadlines,
- Ability to update a fuel cost policy outside of the annual review process,
If the FERC approves the compliance filing as filed, PJM will have 45 days to transition to the new process. If the FERC disagrees with PJM’s language and calls for changes, PJM will bring the proposal back to the MIC. At that time, PJM will tell stakeholders of conforming changes to the Operating Agreement and manual language based on the FERC recommendations.
On a related note, Monitoring Analytics presented its views on unauthorized natural gas consumption penalties and ratable gas as it related to fuel cost policies.
FERC Order 825 – Settlement Intervals and Shortage Pricing
PJM provided an update on the FERC’s Order 825, regarding five-minute settlements and on the timeline for implementing the order. PJM and its stakeholders are developing packages of options for modifying the operating reserve demand curve to address shortage pricing changes for a first-read at the Dec. 14 MIC meeting.
FTR FERC Order
After an extended discussion, the committee decided to hold a special MIC on spot-in transmission service for energy imports. The session will explore understanding a proposed solution with the NYISO as well as cover expanding the scope of imports from the previously discussed NYISO-only to all grid operators who share a border with PJM.
The committee also continued to work on tariff and manual language for operating parameters, which was originally slated for an endorsement vote.