PJM and interested parties have reached an “agreement in principle” on how to address the July 2018 financial transmission rights auction related to the 2018 default of an FTR market trader, PJM announced Wednesday, Sept. 11.
Settlement talks among PJM and a “diverse set of market participants and stakeholders” – including generation companies, load-serving entities, financial transmission rights trading firms, state commissions and consumer advocates – have been ongoing since a Federal Energy Regulatory Commission order in June, PJM Associate General Counsel Jen Tribulski told the Market Implementation Committee Wednesday.
“It is expected that the settlement will be supported, or at least not opposed, by all the parties,” Tribulski said, noting that the agreement will avoid litigation and its related uncertainties and expense.
In a Sept. 9 order, the Chief Judge overseeing the 90-day settlement proceeding extended the discussions by 30 days to allow parties to submit a settlement package to FERC by Oct. 9.
Tribulski could not share details of the settlement given settlement confidentiality rules, but said stakeholders can expect a meeting in mid-October – after the settlement is filed and sufficiently in advance of the deadline for comments on the settlement – to hear and discuss details of the agreement.
PJM is committed to providing updates along the way, she said.
At issue is a FERC directive that PJM re-run its July 2018 financial transmission rights auction to include liquidation offers from the defaulted GreenHat Energy LLC portfolio for August 2018 through May 2019, and not just August 2018.
PJM requested clarification before attempting to revise multiple months of settled results – an exercise that PJM said could significantly increase the total default allocation. The current estimate of current and future default liability, based on recent auction prices, is approximately $160 million. FERC granted the request for clarification and set a paper hearing while at the same time encouraging all sides to resolve the issues through settlement talks.