PJM, its stakeholders and the independent market monitor continued to examine the complexities of several issues during the Aug. 10 Market Implementation Committee meeting.
Fuel Cost Policies
PJM, Monitoring Analytics (the PJM independent market monitor) and stakeholders discussed reworking fuel cost policy guidelines and an approval process. There had been two previous special MIC meetings on the topic.
The Federal Energy Regulatory Commission ordered PJM to include provisions in the Tariff and Operating Agreement for market sellers to have a PJM-approved fuel cost policy in place before the submission of cost-based offers.
In addition to the changes to the Tariff and Schedule 2 of the Operating Agreement, PJM’s changes will be reflected in Manual 15: Cost Development Guidelines.
PJM has incorporated feedback from the special meetings and other stakeholder feedback, changing the language to the Operating Agreement Schedule 2 and making changes to the tariff, Manual 15 and the fuel cost policy process. It also included some criteria from the independent market monitor into the Operating Agreement and the Tariff.
PJM must make a filing that complies with FERC’s clarifying order by Aug. 16 and wants to have approved fuel cost policies in place for winter 2016/2017. PJM will bring the supporting Manual 15 language for endorsement at the September MIC, with the endorsement vote of the Markets and Reliability Committee at its September meeting. The goal is to have board approval for Manual 15 language in October.
None of the changes would be effective until the FERC accepted PJM’s proposal.
Release of Capacity in the 2017/18 Delivery Year Third Incremental Auction
Discussions continued on the release of annual capacity in the 2017/2018 delivery year third incremental auction.
PJM presented its proposed solution and changes to tariff language related to how it would release capacity as part of the Capacity Performance transition auction. PJM will continue to develop the proposed solution and tariff language to release the capacity and present it to stakeholders at the September MIC for approval.
FERC Order 825
PJM gave its first presentation on FERC Order 825, which focuses on standardizing some of the market designs associated with market settlements and shortage pricing.
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.
PJM, the stakeholders and the IMM discussed the settlement of real-time energy transactions at the same interval they are dispatched, and balancing settlements for the day-ahead market.
In other business, the MIC heard the first read on the proposals to un-nest the operating parameter definitions in Manuals 11, 15 and 28. It also endorsed changes to Manual 11: Energy and Ancillary Market Operations (periodic review).