MRC Looks at Shortage Pricing

PJM began taking action regarding sub-hourly settlements and the triggers for shortage pricing July 28, when it presented a problem statement and issue charge at the Markets and Reliability Committee.

On June 16, the Federal Energy Regulatory Commission issued a final rule, Order 825, on a previously issued Notice of Proposed Rulemaking.

Within the final rule, the FERC established three areas for alignment between settlement and dispatch intervals– real-time market energy transactions, operating reserves and intertie transactions. The commission also ordered that shortage pricing must be triggered in any five-minute interval in which a shortage of energy or operating reserves occurs.

The FERC also stated within the order that, although changes to the demand curves used for shortage pricing were not directly in scope of their order, the topic could be taken up with stakeholders and proposed back to the FERC.

The topic will be worked at the Market Implementation Committee. PJM is required to submit a compliance filing for Order 825 in early January 2017.

After a lengthy discussion of the scope, the committee endorsed the charter for the Underperformance Risk Management Senior Task Force.

The vote had been postponed until the committee could discuss a problem statement and issue charge regarding the performance assessment hours used in PJM’s non-performance charge rate, its role in the capacity market and if that should be in the scope of the charter. The problem statement and issue charge failed to reach the required majority support in a sector-weighted vote.

The task force will review the appropriateness of the scope of current proposed solutions at its July 29 meeting.

In other action:

The committee endorsed changes to auction specific bilateral transactions. PJM had worked with stakeholders on the issue for several months, including holding special Market Implementation Committee sessions, following Capacity Performance changes.

The committee received an update regarding the July 27 Special Market Implementation Committee meeting on Manual 15 and fuel cost policies.

The committee endorsed revisions to:

  • Manual 11: Energy & Ancillary Services Market Operations (for the day-ahead scheduling reserve)
  • Manual 14C: Generation and Transmission Interconnection Facility Construction (supporting inclusion of Order 1000 processes)
  • Manual 20: PJM Resource Adequacy Analysis (periodic review)
  • Manual 29: Billing (periodic review)