PJM lays out plans for FERC filing on capacity pricing


At the Members Committee webinar on Feb. 20, Vince Duane, PJM senior vice president − Law, Compliance & External Relations, laid out the process that PJM will follow in enacting the PJM Board’s direction on capacity pricing.

The board directed PJM to file both the Capacity Repricing and MOPR-Ex proposals with the Federal Energy Regulatory Commission under Section 205 of the Federal Power Act and to request the FERC to institute further processes to ensure continued stakeholder engagement on the issue.

Duane said the board considered many data points including input from stakeholders and the Organization of PJM States. It also received clear recommendations from Monitoring Analytics and PJM management. In addition, Duane and Stu Bresler, senior vice president – Operations and Markets, shared with the board advice received from meetings with FERC staff.

“It was not a decision that was made lightly,” said Duane.

Whether to take the mitigation approach, such as the MOPR-Ex, or the accommodation approach, such as the PJM repricing proposal, is an issue the industry has grappled with for more than a year. Duane pointed out that the FERC held a technical conference on it.

He said that, given the decision is a matter of policy, the Board felt that the decision was one better made by the federal policymaker.

PJM’s filing will request that, once the commission selects a policy direction, it then should direct the respective rule changes to a two or three-month settlement-judge process to refine and explore any change or improvement to be made to whichever proposal fulfills the policy call that FERC will have made.

Both sets of rule changes would benefit from stakeholder input. Duane said he did not expect the judge to obtain a complete consensus, and there would be ample opportunity for members to participate in arriving at an outcome and to provide comments on any such outcome.

The idea would be for the settlement process to conclude in time to allow the FERC to issue a final order and well in advance of the May 2019 Base Residual Auction to address with finality the question of how the wholesale capacity market addresses state policy decisions.

He expects PJM to file at the beginning of March, perhaps waiting until after an expected March 9 FERC decision on markets in ISO-New England. He assured stakeholders that PJM would make them aware of what PJM plans to do in advance.

Stakeholder Process Forum

Dave Anders, director – Stakeholder Affairs, discussed Tuesday morning’s Stakeholder Process Forum. During the forum, stakeholders looked at the use of the voting application at standing committees and senior task forces, as well as the PJM website document retention policy, among other items.

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