MRC Looks at Fuel Cost Process

On Nov. 17, the Markets and Reliability Committee tabled a proposal regarding fuel cost policies and approved problem statements regarding capacity auctions and load forecasting.

PJM and stakeholders will revisit proposed language, with the intention of bringing it back to the MRC in December and the Members Committee in January.

As part of the hourly offers compliance filing with the Federal Energy Regulatory Commission, PJM proposed supporting language that clarifies the requirement for all market sellers to have a PJM-approved fuel cost policy and a process to support submission and approval.

Because it is a compliance filing, the FERC has no deadline for its response; PJM had asked for approval by mid-October. PJM also requested 45 days after FERC approval to implement a plan. PJM has worked with stakeholders to develop its fuel cost policy proposal so there can be implementation as soon as possible, once FERC approval of the compliance filing is obtained.

The committee also considered several problem statements/issue charges dealing with the capacity market.

Winter Season Resource Adequacy and Capacity Requirements

The committee approved a problem statement and issue charge to review PJM’s load forecasting methodology.

The scope of the work includes identifying any potential issues regarding the accuracy of PJM’s RTO and zonal peak load forecasting used in assessing resource adequacy during the winter season, and identifying a methodology and assumptions for determining RTO and zonal winter reliability requirements. Stakeholders will work through the Load Analysis Subcommittee and Resource Adequacy Analysis Subcommittee.

RPM Incremental Auction PJM Sales

The committee approved, as amended, a problem statement and issue charge regarding PJM’s sell back of excess capacity in Reliability Pricing Model incremental auctions.

Stakeholders will review the RPM incremental auction process and structure, with specific focus on circumstances where PJM is a substantial capacity seller. The amended language noted the review should look at the general structure, including the timing, amount and participation in incremental auctions.

Extension of Base Capacity

Stakeholders failed to endorse a stakeholder proposal to extend base capacity for the 2020/2021 delivery year.  During extended debate, many stakeholders expressed a desire to see how PJM’s proposal on seasonal resources (filed with the FERC late Nov. 16) plays out.

Combined Cycle Unit Modelling

Stakeholders approved a problem statement / issue charge regarding combined cycle unit modelling and the creation of a senior task force. The task force will build on previous work of the Operating Committee.

Underperformance Risk Management

A proposal regarding underperformance risk management in Capacity Performance failed endorsement on a sector-weighted vote. The package received majority support (54.76 percent) in the Underperformance Risk Management Senior Task Force; it included updated and new mechanisms to manage underperformance penalties.

The committee endorsed:

First Readings