MIC looks at gas pipelines and FERC 


PJM and its stakeholders looked at issues associated with gas pipeline contingencies and actions by the Federal Energy Regulation Commission as they engaged in a number of discussions at the Market Implementation Committee meeting Jan. 10.

Rich Brown, manager – Emerging Markets, reviewed the draft problem statement and issue charge to address costs associated with the gas pipeline contingencies and emergency operating instructions.

As part of its resilience road map, PJM is looking at gas pipeline contingencies in “emergency” mode (constrained electric/gas system conditions) and “conservative” mode (cyber/physical threats).

PJM currently has no mechanism in place to compensate generators for possible costs associated with some actions taken to comply with PJM emergency operating instructions. Future discussion will include determining what costs are directly attributable to the operating instruction, as well as if, and how, these costs should be recovered.

Tim Horger, director – Energy Market Operations, briefed stakeholders on the FERC’s recently announced Section 206 proceeding on fast-start resource pricing (EL18-34-000). Horger gave a short history of the FERC’s Notice of Proposed Rulemaking on the issue before moving on to details of the proceeding.

In the 206 proceeding, the FERC identified changes that are consistent with PJM’s response to the FERC’s original fast-start pricing NOPR. While PJM is still reviewing the changes, it expects to support the changes in general and provide additional feedback and potential recommendations. These include looking at fast-start methods and definitions.

Horger said PJM will look at the application for all resources (not just fast-start resources) through the stakeholder process, but the initial 206 proceeding is more narrowly defined with fast-start.

Part of the Energy Price Formation Senior Task Force meeting on Jan. 18 will be devoted to further education on the 206 proceeding; PJM will be seeking feedback from stakeholders. PJM’s initial response is due Feb. 12, with the final order from the FERC in September.

Horger also presented a first read of the updated proposals addressing market paths and interface pricing point alignment. PJM and stakeholders have been discussing the proposals for several months; this topic was also scheduled as a first read in December.

There are currently four proposals – two from stakeholders, one from PJM and a joint proposal from PJM and Monitoring Analytics, PJM’s independent market monitor. The issue stems from Monitoring Analytics’ and PJM’s concerns that the scheduling of transactions on segmented paths may be inappropriate and inconsistent with actual power flows, resulting in market inefficiencies and potential market manipulation.

PJM also presented the first education session on modeling practices for long-term financial transmission rights, stemming from the problem statement and issue charge approved at the October meeting.

Current long-term FTR modeling practices do not account for future transmission system upgrades. Those future upgrades can have significant impacts on congestion revenue, and PJM is concerned that its long-term FTR auction clearing prices may not fully reflect the true future system capabilities.

Other Committee Business 

Joe Ciabattoni, manager – Markets Coordination, offered a preliminary summary of operations during the recent extreme cold weather. The presentation charts compared stats from the 2014 Polar Vortex and the winter of 2015 with the Dec. 27, 2017–Jan. 7, 2018 cold snap.

Ciabattoni also briefly addressed preliminary market numbers. He said that while there was some uplift during the 11-day stretch, it was nowhere near what PJM saw during the Polar Vortex.

Endorsements (by acclamation)

First Readings