VOM Vote Deferred at Markets & Reliability Committee

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Stakeholders voted at Thursday’s Markets & Reliability Committee meeting to defer voting on variable operations and maintenance (VOM) proposals until no later than the August MRC meeting.

The motion included instructions to further discuss the myriad proposals at upcoming Market Implementation Committee meetings. The motion to defer the vote passed by acclamation, with no objections or abstentions. The MIC discussion may include possible new proposals.

AEP, which proposed the main motion, had several friendly amendments. That proposal is called the “default proposal” because it reflects many of the default elements from the U.S. Energy Information Agency. Stakeholders felt there was insufficient time to review the proposed amendments and vote on Thursday. In addition, Rockland Electric developed a compromise package, which it may offer at a future meeting.

The motion to defer does not change the order in which the packages will be voted on when they come back to the MRC. That is: AEP (default), PJM, Monitoring Analytics and potentially the new Rockland Electric proposal. The default and PJM packages gained more than 50 percent of the vote at the April MIC meeting; the independent market monitor’s package did not.

The vote must come before August because aspects of the VOM affect the Quadrennial Review. Members must vote by Aug. 31 on the any recommendations that result from the Quadrennial Review; PJM needs to file with the Federal Energy Regulatory Commission by Oct. 1.

Other Committee Business

Suzanne Daugherty, PJM chief financial officer, announced that financial transmission rights market participant Greenhat Energy was in collateral default and was expected to go into payment default Thursday by close of business. Daugherty indicated that the value of the default would be in the tens of millions of dollars. PJM will update members as soon as more information is available.

Unrecovered defaults are unusual. In PJM’s 20-year history operating electricity markets, only one significant material default could not be fully recovered.

PJM has already implemented, as of April 1, 2018, credit policy changes to strengthen requirements for FTR paths and to require additional collateral.  In addition, a minimum FTR credit requirement proposal is currently in the stakeholder voting process.

In addition, Daugherty said that a billing matter with an undisclosed member was settled with the FERC and approximately $31.4 million had been disgorged and will remitted back to affected PJM members.

After a lengthy debate, stakeholders passed revisions to Manual 20: PJM Resource Adequacy Analysis to reflect changes to the methodology for developing the winter peak week’s capacity model. It passed with 4.56 in a sector-weighted vote (3.335 was needed for passage).

The new methodology for developing the winter peak week’s capacity model was used as part of PJM’s preliminary response to the MRC-approved problem statement/issue charge on Winter Resource Adequacy.  

By acclamation stakeholders endorsed changes to governing documents to clean up cross-references. They also approved a motion to move future cross-reference changes to a new MRC consent agenda.

Other Endorsements  

  • Changes to Manual 11: Energy & Ancillary Services Market Operations (zero objections, zero abstentions)
  • Revisions to Manual 06: Financial Transmission Rights pertaining to FTR Nodal Remapping (zero objections, zero abstentions)
  • Long-term financial transmission rights auction and present the PJM package (zero objections, nine abstentions)

First Readings

  • Revisions to the governing documents for aggregated seasonal demand response registration
  • Revisions to the Reliability Assurance Agreement and Manual 18: PJM Capacity Market on winter peak load calculation from the Demand Response Subcommittee
  • Problem statement and issue charge on fuel requirements for black start resources
  • Financial transmission rights credit proposal and associated Tariff revisions
  • Proposed changes to Manual 01: Control Center and Data Exchange Requirements.
  • Proposed changes to Manual 3A: Energy Management System Model Updates and Quality Assurance
  • Split of Manual 14A: New Services Request Process into a revised Manual 14A: New Services Requests Study Process, and new Manual 14G: Generation Interconnection Requests