By Rory D. Sweeney
The approval is the final step in the RTO’s expedited implementation of changes to take advantage of enhanced computing power and puts it on track to complete the effort in mid-December. (See “Day-ahead Market Timeline Manual Changes,” PJM Market Implementation Committee Briefs: Nov. 7, 2018.)
The changes were also made possible, PJM said, by a recent reduction in the number of biddable points for virtual transactions, which was part the third and final phase of its plan for mitigating uplift. (See FERC OKs Slash in Virtual Bidding Nodes for PJM.)
PJM told FERC that the extension would provide natural gas-fired generators additional time to engage in fuel price discovery each day, thereby increasing certainty around costs.
“The additional time for price discovery will place gas-reliant generation units on more equal footing with market participants who are not dependent on fluctuating daily natural gas prices when formulating and submitting their bids and offers in the day-ahead energy market,” the RTO explained.
The expedited implementation timeline means the changes will be in place before the winter season, when gas prices have been historically volatile. Several additional related changes are expected to be approved at a Thursday meeting of PJM’s Markets and Reliability Committee.
The Energy Trading Institute (ETI) supported the change, but it asked that PJM additionally work to further reduce the day-ahead solve time without damaging the efficiency of the market and provide additional information regarding the software and hardware upgrades for market efficiency and transparency purposes. It also asked the RTO to “evaluate the divergence in the market and the increase in uplift [since the reduction of available locations for virtual transactions] and provide additional analysis on the cost associated with the de minimis solve time gain of reducing virtual transactions.”
In its reply, PJM welcomed the discussion with ETI through the RTO’s stakeholder process but said the requests were out of scope for the filing. FERC agreed and dismissed ETI’s requests.