Cost Caps Pass MRC by Big Margin


After hundreds of hours of discussion – including one final lengthy debate Thursday at the Markets & Reliability Committee meeting – PJM stakeholders adopted a proposal regarding PJM’s evaluation of cost commitments included in competitive project proposals.

Stakeholders passed an amended proposal by LS Power and the D.C. Office of People’s Counsel, which incorporated sponsor-proposed revisions, as well as a friendly amendment from American Municipal Power. The vote was 3.79 in favor in a sector-weighted vote (3.35 was needed for passage).

The LS Power proposal was originally submitted as an alternate motion for consideration at the January 25 MRC, and then deferred to the May MRC.

The adopted proposal will utilize the enhanced disclosure templates that PJM developed. The templates will provide greater transparency and uniformity related to all aspects of transmission costs.


Under the adopted proposal, PJM retains the ability to select a project based on all relevant factors, with cost and binding cost containment being just one component. This was especially important to PJM. The proposal sets forth an action plan towards improving the framework to be utilized to evaluate cost containment commitments.

Janell Fabiano, senior stakeholder process specialist, gave an overview of the timetable and meetings of the Planning Committee including special sessions of the Planning Committee that occurred during the period of the deferral.

Stakeholders rejected (with 1.95 in favor of the 3.35 needed) a motion to remand the entire agenda item including the LS Power proposal back to Planning Committee. Proponents of that motion believed the Planning Committee and stakeholders needed more time to complete its work. Most stakeholders felt, however, that the alternate LS Power motion of the proposal modified with the PJM templates provided the clarification they had been seeking.

Other Committee Business

Stu Bresler, PJM senior vice president of operations and markets, gave a high-level overview of the results of the capacity auction. Bresler also touched on the recent FERC order on incremental auctions that rejected PJM’s tariff revisions and terminated a Section 206 proceeding. PJM is looking at its options through the Incremental Auction Senior Task Force.


Stakeholders voted by acclamation (without abstentions or objections) to defer until the June MRC any discussion of the Variable Operations & Maintenance packages. Some stakeholders wanted more time to review the presentation from Marketing Analytics, PJM’s independent market monitor, which was posted late Wednesday afternoon.

Melissa Pilong, senior analyst – Operation Analysis & Compliance, presented a high-level abbreviated review of the default proposal and PJM proposals. Further analysis of the cost impacts of the default and PJM solution packages will be discussed at the June Market Implementation Committee.

Glen Boyle, manager – Operation Analysis and Compliance, gave a status update on the work of the Primary Frequency Response Senior Task Force. In February, the FERC issued Order 842 revising requirements for primary frequency response going forward. It did not, however, specifically address the existing resource fleet. PJM filed for clarification on that in March.

Endorsements (by acclamation)

  • Manual 36: System Restoration (periodic review process)
  • Manual 03: Transmission Operations
  • Manual 11: Energy & Ancillary Services Market Operations (FERC Order on virtual bidding)
    • Submission flexibility (when generation and load response resources may report hourly differentiated notification times, minimum run times, and minimum downtimes in Markets Gateway)
  • Manual 14A: New Services Request Process (Attachments F and G)
  • Manual 07 (Relay Subcommittee’s cover-to-cover periodic review)
  • Manual 14D: Generator Operational Requirements (generation transfer process)
  • Operating Agreement confidentiality provision

The price-based offer caps updates to Manual 11 are going back to the MIC for more discussion.

First readings