At the October 1 Markets and Reliability Committee, PJM invited stakeholder input regarding the recent notice of proposed rulemaking on energy price formation issued by the Federal Energy Regulatory Commission.
The notice requires organized markets to settle real-time energy and operating reserve transactions financially at the same five-minute time interval that it dispatches those resources.
It also requires the markets to eliminate any lag between declaring a shortage and beginning shortage pricing.
All organized markets dispatch resources in five-minute intervals; PJM is one of the RTOs which settle transactions based on the average price for all dispatch intervals during the hour (hourly integrated prices).
The notice was posted in the Federal Register on September 30. This gives PJM until November 30 to develop and file its comments.
Stan Williams, director – Compliance and Settlements, and Adam Keech, senior director – Market Operations, presented on sub-hourly settlements and shortage pricing.
Williams said that the FERC has asked comprehensive sets of questions requesting feedback on a number of aspects of the proposed rule – including reasonable costs, infrastructure improvements, required hardware and software changes and stakeholder discussions, as well as the timeframes for each.
PJM will provide updates throughout the stakeholder process, including the Market Settlements Subcommittee, Markets Implementation Committee and the MRC.
Once the FERC receives the November 30 feedback, Williams said he anticipates that it would issue its order in the spring of 2016; PJM would then have another four months to determine how it will comply with the order, with an additional year after that for implementation.
PJM has set up a mailbox for stakeholders to submit questions and suggestions for consideration as PJM develops its reply NOPR comments. Submit any questions or suggestions to: PriceFormationNOPR@pjm.com