MRC/MC Roundup: PJM Confirms Suspension of Capacity Auction Deadlines Pending FERC Ruling

Also: • PJM awaits FERC action to implement compliance with Order 841 • Form 715 FERC orders update • Nominating Committee selected • CEO search update

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PJM has confirmed its suspension of all deadlines and activities related to the Base Residual Auctions for the 2022/2023 and 2023/2024 Delivery Years, pending direction from the Federal Energy Regulatory Commission (FERC) on new rules for the annual capacity auction.

Deadlines associated with this year’s capacity auction, covering the 2022/2023 Delivery Year, already had been suspended after July 25, when FERC ordered that the auction be postponed.

Absent further FERC guidance, PJM also is suspending the approaching deadlines for the auction to be held in 2020, Jen Tribulski, associate general counsel, told the Markets & Reliability Committee at the Sept. 26 meeting.

PJM continues to run, as scheduled, all incremental auctions associated with Base Residual Auctions that already have been conducted.

Tribulski assured members that as soon as FERC rules on PJM’s proposed changes to the capacity auction, PJM will engage stakeholders in establishing a new timeline for the suspended auctions.

Changes Seek to Account for Subsidies

PJM administers the capacity market – also known as the Reliability Pricing Model – to secure enough power supply three years in the future to ensure that sufficient energy will be available to meet customers’ peak demand. Its annual competitive auction aims to obtain these future supplies at the lowest reasonable price.

PJM has been pursuing changes to capacity market rules since early 2017 to accommodate public policy initiatives that result in some supply resources being subsidized.

PJM submitted its newest plan Oct. 2, 2018, in response to FERC’s June 2018 Order.

FERC currently is working without a quorum following the death of Commissioner Kevin McIntyre in January, the departure of Commissioner Cheryl LaFleur in August, and the recusal of Commissioner Richard Glick from cases involving his former employer, Avangrid, and its subsidiaries. The recusal is set to expire at the end of November.

Order 841 Contingency Plan

Committee members also heard an update on a separate matter on which FERC has yet to rule: PJM’s Order 841 compliance filing, which aims to remove barriers to electric storage participation in the competitive wholesale electricity markets.

Order 841 set an implementation date of Dec. 3, but FERC has not approved the bulk of PJM’s filing.

If FERC has not ruled in time for the implementation date, PJM will proceed with multi-use, load-serving energy storage resource settlement provisions, which have been approved by the Commission.

However, PJM will put on hold the changes it had planned for the real-time, day-ahead and ancillary service markets, said Andrew Levitt, senior business solution architect – Applied Innovation.

That means the status quo market rules for energy storage resources will remain in effect.

Form 715 Update

Pauline Foley, associate general counsel, updated the committee on two recent FERC rulings that will change how PJM administers a particular category of transmission projects developed to address planning criteria included in the transmission owner’s FERC Form 715.

FERC Form 715 is the annual transmission planning and evaluation report that any transmitting utility with facilities at or above 100 kV must file with the Commission. FERC requires submission of transmission planning reliability criteria that the transmission owner uses to assess and test its individual transmission system.

In effect, the rulings require the costs of Form 715 projects that have been allocated 100 percent to the transmission owner to be regionally allocated, and as such, that the projects themselves be included in the competitive solicitation process like other reliability projects.

Foley said PJM has requested a 30-day extension to reassign cost responsibility for Form 715 projects for the period beginning May 15, 2015 to August 30, 2019, per FERC’s order. She said FERC remained silent on the subject of potential refunds resulting from cost reallocations. Therefore, no refunds will be issued unless FERC directs PJM to do so.

Nominating Committee Selected

The Members Committee approved the 2019/2020 Nominating Committee.

Those chosen will serve one-year terms. They are:

  • Electric Distributor Sector: Ed Tatum, American Municipal Power
  • End-Use Customer Sector: Kristin Munsch, Illinois Citizens Utility Board
  • Generation Owner: Neal Fitch, NRG Power Marketing
  • Other Supply Sector: Bruce Bleiweis, DC Energy
  • Transmission Owner Sector: Dana Horton, Appalachian Power Company

CEO Search on Track

Neil Smith of the PJM Board of Managers provided an update to the Members Committee regarding the search for a chief executive officer.

The search committee is “making good progress” and expects to settle on a candidate sometime this fall, he said.