VOM Fails to Pass at Markets & Reliability Committee

Melissa Pilong discusses VOM

Stakeholders failed to pass any of the variable operations and maintenance packages before them at the Markets & Reliability Committee meeting July 26.

Proposals from American Electric Power, PJM, Monitoring Analytics and Rockland Electric all failed in sector-weighted votes, as did an alternate package brought forth by Old Dominion Electric Cooperative (ODEC).

ODEC offered an amendment to the PJM proposal that would eliminate the provision that fixed costs could be included in energy offers.  This amendment was not adopted, so ODEC proposed a new package that received a required second.

This new alternative package also failed. Then, there was a motion to revote the original PJM proposal; while that also failed, it did get the most support of any of the options with 2.93 in sector-weighted voting (where proposals need 3.35 to pass)

This means that PJM will continue to implement the existing rules, with combustion turbine and combined cycle units not allowed to include overhaul costs in their energy cost offers. The CTs and CCs currently are allowed to include those costs in their capacity offers.

Stu Bresler, senior vice president – Operations and Markets, said PJM is not certain that status quo is the best option at this point. He said that he believes PJM needs to take a step back, determine the best proposal, and marry that with issues for the Quadrennial Review.

“We want to ensure that we make a well-considered and well-thought-out proposal to the board,” he said.

PJM will present a report to the Board of Managers in October, including the stakeholder viewpoints as reflected in the votes. 

Sector-weighted voting (need 3.35 for to pass)  
AEP Default Failed with 2.28 in favor and 2.72 opposed
PJM Failed with 2.86 in favor and 2.14 opposed
IMM Failed with 1.83 in favor and 3.17 opposed
RECO Failed with 1.97 in favor and 3.03 opposed
ODEC Failed with 2.65 in favor and 2.35 opposed
After a motion to revote on the original PJM proposal, the revote failed with 2.93 in favor and 2.07 opposed

Transmission Replacement Process Senior Task Force

In a lengthy discussion that sometimes showed frustrations on end-of-life transmission projects, stakeholders passed with one objection and two abstentions a stakeholder proposal to sunset the Transmission Replacement Process Senior Task Force.

Fran Barrett, senior director – Strategic Implementation and Change Management, reported out on the two proposals the task force had developed. He noted the task force was at a “strange intersection” of developing proposals before a FERC directive was implemented.

In the past, the task force had several stoppages after FERC issued an Order to Show Cause (Docket EL16-71) to determine whether transmission owners comply with their Order 890 local transmission planning obligations on supplemental projects (and subsequent lack of a quorum at FERC).

American Municipal Power then moved to sunset the task force, arguing that it was no longer productive. AMP followed with a very thorough first read of a proposal for addressing retirement of facilities in the PJM planning process, including revisions to Manual 14B: PJM Region Transmission Planning Process.

Planning for asset retirement is the purview of the transmission owners, including timing of the retirements. The task force was exploring criteria for retirements. One concern is developing infrastructure to replace the retiring assets and how much of an impact that will have on PJM’s Regional Transmission Expansion Plan process.

AMP asserts its proposal meets FERC needs, as well as those of incumbent transmission owners. PJM disagreed, indicating that PJM believes several of AMP’s points are inconsistent with FERC’s directive in its Order to Show Cause and with PJM’s compliance filing in the Show Cause docket.

Other Committee Business

PJM updated stakeholders on the recent FTR default and liquidation efforts. On July 26, PJM submitted a request to FERC to waive certain Tariff requirements to ensure an orderly and efficient liquidation of the GreenHat financial transmission rights portfolio. PJM has established an “FTR Portfolio Liquidation” section on the FTR page of PJM’s website to consolidate information on the GreenHat default.

Diane Lake presents Manual 3A for endorsement



Market Efficiency Process Enhancement Proposal

Nicolae Dumitriu, senior lead engineer – Market Simulation, gave a first read on the Market Efficiency Phase 1 proposal developed at the Market Efficiency Process Enhancement Task Force and the associated OATT revisions.

Other first reads

  • Changes to Manual 14C: Generation & Transmission Interconnection Facility Construction
  • Changes to Manual 14F: Competitive Planning Process


Informational Updates

Members Committee 

Stakeholders approved the consent agenda:

Stakeholders also voted to send a report on the MRC’s variable operation and maintenance votes to the Board, absent the approval of any of the proposals.

There was also a brief discussion of Monday’s Members Committee Webinar discussion about issue prioritization.