PJM and 80 other settling parties today filed a settlement package to comprehensively resolve 15 separate Federal Energy Regulatory Commission complaints regarding extraordinary non-performance charges resulting from Winter Storm Elliott on Dec. 23 and Dec. 24, 2022. The settling parties requested that FERC approve the settlement no later than Dec. 29, 2023.
The proposed settlement (PDF) is a result of expedited talks requested by PJM and approved by FERC. It is a product of collaboration among PJM and a significant number of diverse market participants – including complainants, intervenors who are net non-performance-charge payors, intervenors who have zero assessed non-performance charges, and intervenors who are net-performance payment recipients – that either support the settlement or do not oppose it.
Despite Winter Storm Elliott’s extreme cold temperatures, which presented unprecedented operational challenges, PJM maintained reliability throughout the PJM region, kept the lights on for the 65 million people in its region, and helped mitigate load shed in surrounding areas with assistance to neighboring grids.
Under the terms of the proposed settlement, swift resolution of the complaints relating to Winter Storm Elliott supports continuing reliable operations, confidence in PJM energy markets and overall generation fleet resilience, the settling parties told FERC.
Proposed settlement terms include:
- Market-wide reduction in non-performance charge assessments, which reduces performance payments
- Review of PJM credit requirements and return of collateral consistent with the PJM Tariff
- Resolution of all allegations regarding PJM operations lodged before FERC in the Winter Storm Elliott complaints, with the exception of two matters that are not central to PJM operations during the event
- No admission by PJM to any violation of the PJM Tariff or any other wrongdoing
Based upon FERC action on a waiver and the filing of the broadly-supported settlement, PJM will pause billing of the remaining, unbilled non-performance charges and concurrent disbursement of payments to suppliers that over-performed during storm events. These changes are expected to take effect starting with the bills issued in October.
The proposed settlement does not resolve capacity market design issues recognized during Winter Storm Elliott. PJM and its stakeholders have been discussing additional changes to capacity market rules as communicated in a letter from the PJM Board of Managers dated Sept. 27, 2023.