PJM Briefs MIC on D.C. Court Remand

At the July 13 Market Implementation Committee meeting, PJM briefed stakeholders on a July 7 court ruling regarding market adjustments.

PJM addressed the ruling by the U.S. Court of Appeals for the District of Columbia Circuit that partially vacated the Federal Energy Regulatory Commission’s orders on PJM’s December 2012 market adjustments focused on the minimum offer price rule. The court remanded the case for further FERC action.

The court found the FERC exceeded its authority under Section 205 of the Federal Power Act when it ordered PJM to reinstate the unit‐specific exemption (which PJM proposed to remove) and return to a one-year period of mitigation (rather than the three years PJM proposed).

The court held when the FERC determined PJM’s proposal was not just and reasonable as filed, it should have rejected the filing. FERC could have established a Section 206 proceeding under the FPA to determine if PJM’s current rules were no longer just and reasonable and then determine how to revise the rules.

PJM will continue to operate in accordance with its filed rate. Until the FERC requires PJM to revise its tariff, those are the rules that are in effect. Operating under the pre-December 2012 rules is not a viable option.