At a special Market Implementation Committee meeting July 6, PJM and stakeholders worked on crafting solution options for the Quadrennial Review of the Variable Resource Requirement Curve parameters used in the Reliability Pricing Model capacity auction.
PJM is holding several special sessions on the Quadrennial Review, published in April for PJM by The Brattle Group. PJM was required by its Tariff to conduct the Quadrennial Review prior to the May 2019 Reliability Pricing Model Base Residual Auction.
PJM must file Tariff changes resulting from the review process with the Federal Energy Regulatory Commission by Oct. 12 after a presentation at the Oct. 2–3 meeting of the PJM Board.
Tanya Bodell of Energyzt presented an analysis and findings on behalf of the PJM Power Providers Group (P3). The group proposes that PJM keep the F frame combustion turbine as its reference resource. Both PJM and Monitoring Analytics, the independent market monitor for PJM, advocate moving from the F frame to the H frame combustion turbine.
A reference resource is representative of a peaking unit in the energy market that derives a significant portion of its revenues from the capacity market.
Gary Helm, lead market strategist – Applied Innovations, reviewed the changes made to the solutions matrix since the last meeting, including an updated gas pricing hub. He then worked with stakeholders on new design components.
There is an hour set aside for Quadrennial Review discussion at the July 11 Market Implementation Committee meeting. At that time, stakeholders will review any updates made after the Friday meeting and the impact on components.
At the next special session on July 27, stakeholders will review all the packages and look at elements such as financing costs. At some point, PJM will send a nonbinding poll to stakeholders and review those findings at the Aug. 8 MIC.
Electric Storage Participation/FERC order 841
The third of five special sessions of the Market Implementation Committee convened June 27 to prepare a compliance filing for FERC Order 841 on electric storage participation in the markets.
Discussion focused on a presentation by Howard Haas of Monitoring Analytics, outlining the independent market monitor’s approach to storage participation.
Haas stressed that the rules must be technology-neutral and non-discriminatory – not favoring storage, but ensuring it is able to participate where it is technically and economically feasible.
He also emphasized that if a resource wants to participate as something other than demand response, it must be in front of the meter. In addition, if a resource participates in the capacity market, it will be subject to the “must offer” requirement.
Stakeholders directed most of their questions at Haas’ assertion that any resource participating in the capacity market would have to offer 24-hour capability in order to ensure consistent treatment among all resource types.
Anything less, he said, “creates an inferior good that competes with the 24-hour obligation.” A 10-hour definition is not sustainable, he said.
The group also heard a presentation on the status quo of balancing operating reserves.