By Rory D. Sweeney
FERC on Friday accepted revisions to PJM’s long-term financial transmission rights auctions to correct current processes that might overstate available system capacity and harm auction revenue rights holders (ER18-1968).
The current process allows long-term FTR market participants to obtain the rights to congestion on transmission paths before the owners of the underlying ARRs.
Following each annual FTR auction, PJM conducts a long-term FTR auction for the three planning years immediately following the planning year during which the long-term FTR auction is conducted. Offered for sale is the residual system capability after the annual ARR allocations and the annual FTR auction. In determining the residual capability, PJM assumes that all allocated ARRs are self-scheduled into FTRs, which are modeled as fixed injections and withdrawals in the long-term FTR auction.
Under the new rules, PJM will revise how it compiles the paths available in the auction by conducting an additional, offline annual allocation of ARRs prior to the opening of each round of the long-term FTR auction. The procedure will use the same topology as the annual ARR allocation except that all transmission outages will be returned to service and PJM will perform its simultaneous feasibility test to determine the set of ARRs to be preserved for the long-term FTR auction. (See “Stakeholders Approve Manual, Operational Changes,” PJM MRC/MC Briefs: June 21, 2018.)
FERC also granted PJM’s request to eliminate the three-year long-term FTR product. The auction currently offers FTRs separately for each of the subsequent three planning years, as well as for all three years combined. Historically, bidding for the three-year product is low and eliminating it will increase the efficiency of PJM’s FTR software, the RTO said.
The commission also granted PJM’s Sept. 3 effective date in order to implement the changes in the next round of its long-term FTR auction commencing Sept. 4.