The Market Implementation Committee on Wednesday continued education on financial transmission rights, including two first reads and a stakeholder presentation on concerns.
Brian Chmielewski, senior consultant – Market Services, presented first reads, one on financial transmission rights (FTR) nodal remapping and PJM’s proposed package, and the other on the long-term FTR auction issue (also with PJM’s proposed package).
For nodal remapping, any effective auction revenue rights (ARR) or FTR source or sink that is deleted or renamed from the locational marginal pricing bus model will be remapped to the new name or available closest electrically equivalent pricing node.
For the long-term FTR auction, Chmielewski presented a chart (on page 4) that detailed PJM’s modifications.
A stakeholder presentation on the FTR Forfeiture Rule issue addressed the concerns of some stakeholders that an overly restrictive rule could hurt customers. They fear, for example, that competitive suppliers may assess additional risk premiums that may be charged to customers.
Chmielewski reviewed the rule and the additional analysis (page 4) PJM has performed on FTR forfeitures. Stakeholders discussed interests and possible design components for the matrix.
Market Seller Offer Cap Balancing Ratio
Pat Bruno, senior engineer – Capacity Market Operations, continued discussion on the offer cap balancing ratio issue, including dialogue related to Net Cost of New Entry x B as the default market seller offer cap.
That discussion was previously considered out of scope but was approved by the Markets and Reliability Committee at the April meeting. Bruno reviewed PJM’s solution option for a new methodology of determining the balancing ratio used in the default offer cap. PJM’s independent market monitor also presented possible solutions in the matrix regarding the balancing ratio and the estimated number of performance assessment intervals in a year.
Must Offer Exception Process
Bruno also led the continuing discussion on the Must Offer Exception Process for RPM auctions. PJM is looking at possible reforms to the current process for improved efficiency and clearer guidelines, with a focus on Capacity Performance must-offer exceptions. Stakeholders discussed interests and reviewed the design components of the matrix.
Bruno also presented an update on PJM’s response to the Quadrennial Review.
Stakeholders endorsed by acclamation (with no objections and two abstentions) revisions to Manual 11: Energy and Ancillary Services Market Operations :
- Conforming revisions related to the FERC Order on virtual bidding
- Updates to when generation and load response resources may report hourly differentiated notification times, minimum run times and minimum downtimes in Markets Gateway. Those proposed revisions do not affect when such data is used in market clearing.
- Conforming revisions to correct certain provisions regarding price-based offers
Other Committee Business
- First read of Manual 18: Capacity Market changes developed at the Demand Response Subcommittee to address the winter peak load calculation problem statement
- Update on the Variable Operations and Maintenance packages presented as a first read at the April 19 MRC meeting
- Summary of FERC Order 844: Uplift Cost Allocation and Transparency and review of how it aligns with the recent Market Operations Price Transparency initiative in special sessions of the MIC
- Introduction of the Contact Management feature in the new Membership Management Community
- Review of fuel assurance for restoration
- Update on unit specific parameters and base capacity resources starting June 1
- Manual 11: Energy & Ancillary Services Market Operations changes (prior to endorsement vote at the June Operating Committee meeting)
- Upcoming changes to NERC MOD-026/27 standard