FTR issues dominate MIC

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Stakeholders tackled all manner of financial transmission rights issues at the Market Implementation Committee meeting March 7.

FTR Nodal Remapping

Brian Chmielewski, PJM senior consultant – Market Simulation, reviewed the nodal remapping matrix.  Stakeholders added additional areas of interest and design components.

Long-Term FTR Auction

PJM and Monitoring Analytics briefly presented their respective analyses of revenue discrepancy between the long-term and annual FTRs.

The brevity resulted from stakeholders’ concerns that this particular discussion would be better served with more face-to-face conversation. The Nor’easter that affected much of the eastern PJM territory on March 7 kept in-person attendance smaller than usual.

Chmielewski reviewed a number of improvement opportunities in the current construct, especially in the modeling of residual capability and auction revenue rights in the Long-Term FTR model.

Problem statements and issues charges

 Stakeholders endorsed by acclamation a pair of stakeholder-generated problem statements and issue charges. The first was on the FTR forfeiture rule, the second on the must-offer exception process.

WHAT IS A FINANCIAL TRANSMISSION RIGHT?

 

A financial transmission right (FTR) is a financial instrument that entitles the holder to receive compensation for transmission congestion charges that arise in the Day-Ahead Market.

 

Each FTR is defined from a point of receipt (where the power is injected onto the PJM grid) to a point of delivery (where the power is withdrawn from the PJM grid). The hourly economic value of an FTR is based on the FTR megawatt reservation and the difference between day-ahead congestion prices at the sink point (point of delivery) and the source point (point of receipt) designated in the FTR.

 

When a point is terminated, there is no longer a corresponding LMP calculated and either the FTR source and/or sink point must be remapped to the closest equivalent or in extreme circumstances the FTR path may be terminated. Termination exists for reasons such as generation retirements, load removals and system topology changes.

Other Committee Business

Ray Fernandez, PJM manager – Market Settlements Development, provided an update on the 5-minute settlements implementation scheduled for April 1. He updated members on pre- and post-go live stakeholder requirements for submitting 5-minute revenue meter data in Power Meter.

PJM is working on continued Day-Ahead Market improvement, with the aim of posting results faster.  This includes new servers for a better production environment (as part of a routine two-year refresh cycle to keep up with constant hardware improvement) to track and measure performance characteristics.

Tom Hauske, PJM senior lead engineer – Operation Analysis & Compliance, provided the first read of several solution packages developed in special MIC meetings on variable operations & maintenance costs.

Pat Bruno, PJM senior engineer – Capacity Market Operations, gave stakeholders the opportunity to provide additional interests and design components to the matrix on offer cap balancing ratio.