What comes next for financial transmission rights issues was the center of several lengthy discussions at the Feb. 7 Markets Implementation Committee meeting.
Chmielewski pointed out the challenges for the nodal remapping include pricing vs. geography and a time crunch. A potential replacement node may be close in proximity but not close from a historical congestion pricing perspective.
The long-term FTR problem statement looks at the long-term FTR market and reevaluates whether it is still competitive and serving its intended purpose. Chmielewski’s educational presentation examined the long-term FTR’s modeling.
A group of stakeholders reviewed their presentation of the stakeholder/market participant perspective on long-term FTRs, including what members’ appetite might be for hedging and risk.
Chantal Hendrzak, MIC chair and PJM executive director – Market Evolution, said the discussion was a good start to understanding the concerns and benefits of the long-term FTR product. She added that PJM and members will continue to discuss long-term FTRs in detail. Once the specifics are examined, they can serve as a starting point for the design components and subsequent solution ideas, which could include status quo.
Market Path/Interface Pricing Point Alignment
Stakeholders failed to endorse any of four Market Path/Interface Pricing Point Alignment proposals.
The issue stemmed from Monitoring Analytics’ and PJM’s concerns that the scheduling of transactions on segmented paths may be inappropriate and inconsistent with actual power flows, resulting in market inefficiencies and potential market manipulation.
None of the proposals received the 50 percent required to move to the Markets & Reliability Committee. Status quo was preferred with 69 percent of the vote (135 yes, 62 no, 58 abstentions).
- Package A (PJM/IMM joint proposal) failed (39 yes, 187 no, 42 abstentions)
- Package B (Stakeholder) failed (74 yes, 122 no, 69 abstentions)
- Package C (Stakeholders) failed (94 yes, 120 no, 51 abstentions)
- Package D (PJM) failed (71 yes, 152 no, 34 abstentions)
Stakeholders endorsed conforming revisions to Manual 12: Balancing Operations for PJM’s External Capacity filing (no objections, no abstentions). The endorsement excluded the Planning section, which will be discussed at the Feb. 8 Planning Committee meeting.
- Manual 11: Energy & Ancillary Services Market Operations (conforming language)
- Tariff Revisions to address pseudo-tie overlapping congestion
Stakeholders presented two problem statements and issues charges for first reads.
The first is the problem statement and issue charge to address the FTR Forfeiture Rule. The second is the problem statement and issue charge to address the Must Offer Exemption process. The committee will be asked to approve both problem statements and issue charges at the March meeting.
PJM also shared the details of the five solution packages developed in the Variable Operations & Maintenance special sessions of the MIC.
PJM provided overview and education on the Market Seller Offer Cap Balancing Ratio, which was approved at the December MRC.
PJM also looked at cost-based and market-based energy offers greater than $1,000/MWh, providing a summary of cost-based offers that exceeded $1,000/MWh during the extreme cold weather the PJM footprint experienced in the first week of January 2018. It also provided an update on a Markets Gateway enhancement to prevent market-based offers greater than cost-based offers exceeding $1,000/MWh.