Thursday, February 21, 2019

FMU Proposal Falls Short

Generation owners last week helped kill a joint proposal from PJM and the Independent Market Monitor to reduce payments to frequently mitigated units (FMUs).

The PJM-IMM proposal, which earned nearly 70% approval in a vote of the Markets and Reliability Committee in May, won support of only a 65.6% sector-weighted vote of the Members Committee, falling just short of the two-thirds consensus. (See PJM-IMM Limits on FMU Adders Prevail.)

While End Use Customers and Electric Distributors voted unanimously in favor, the proposal won only 23% of Generation Owners and about half of Transmission Owners and Other Suppliers.

The PJM-IMM plan won the MRC vote in May after three packages favored by suppliers failed to earn enough support for approval.

Market Monitor Joe Bowring has said the adders are no longer needed because of PJM’s capacity market.

The PJM-IMM proposal would have left the calculations for FMU adder payments unchanged but limit them to units whose net revenues are not covering their avoidable cost rate (ACR). Had the proposal been in effect in 2013, it would have reduced the number of units receiving adders from 112 to only 28 — 23 of which are scheduled to retire.

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