PJM will engage stakeholders in a series of meetings before submitting by June 1 a second compliance filing addressing its capacity market price rules, as directed by the Federal Energy Regulatory Commission (FERC).
In response to several requests for a rehearing and clarification of certain elements of FERC’s December order, which expanded the Minimum Offer Pricing Rule (MOPR) used in the PJM capacity auction, on April 16 FERC largely affirmed its order, but provided some clarifications.
The December order significantly expanded the application of the MOPR, which had previously only applied to new natural gas-fired resources.
Prior to submitting its initial compliance filing on March 18, PJM heard from every stakeholder sector, conducting nine formal stakeholder meetings to discuss the filing and surrounding issues.
PJM Seeks Input
Similarly, PJM is actively seeking to understand the impact of the FERC order on its stakeholders as it prepares its second compliance filing.
In a presentation to the Markets & Reliability Committee on April 30, Lisa Morelli, Director – Capacity, Demand Response & Compliance, shared PJM’s next steps, starting with a May 6 special session of the Market Implementation Committee, 10 a.m. to noon.
This will be followed by a dedicated discussion at the May 13 meeting of the Market Implementation Committee and a subsequent information session tentatively scheduled for May 28.
Two Points of Particular Interest
PJM is particularly interested in hearing from stakeholders about the effects of the following points of the order:
- State default service procurements being captured by the definition of “state subsidy”
- Public power self-supply entities engaging in voluntary, arms-length bilateral contracts with unaffiliated third parties triggering the MOPR
In her update, Morelli highlighted several impacts of the FERC order, including on MOPR floor prices, classification of new versus existing capacity resources, and transactions.
Morelli said a large majority of PJM’s March compliance filing stands, and that the new compliance filing will address particular aspects of the recent FERC order.
PJM still proposes to run the 2022/2023 Delivery Year auction approximately six months after FERC approves its compliance filings.
PJM would be able to run subsequent auctions with as little as six months in between to help maintain an orderly process for each auction while working to return to a normal auction schedule.