Monday, March 18, 2019

PJM to FERC: Hurry Up with Auction Guidance

By Christen Smith

PJM urged FERC on Monday to expedite guidance on the RTO’s upcoming Base Residual Auction as stakeholders prepare for deadlines on two different sets of rules (EL16-49).

Jeff Bastian, PJM | © RTO Insider

The filing comes days after PJM’s Jeff Bastian walked the Market Implementation Committee through the upcoming schedule in what he called a “parallel path” to the Aug. 14 auction, for delivery year 2022/23. Sellers will have to confirm whether they will be offering resources with “actional subsidies” by March 17 — a deadline stakeholders said was unreasonable. (See Capacity Market Sellers Anxious Over Uncertain PJM Auction Rules.)

FERC last summer granted PJM’s request to delay the auction in response to the commission’s ruling requiring the RTO to revamp its minimum offer price rule (MOPR) to address price suppression from rising state subsidies for renewable and nuclear power (ER18-2222). PJM filed its proposed MOPR changes Oct. 2 and said a FERC ruling by March 15 would keep the August schedule on track — though Bastian said on March 6 it seemed no direction from the commission was imminent.

Stakeholders pressed PJM to file an additional waiver delaying the auction again, but the RTO preferred to prepare for two different scenarios: moving ahead with existing Tariff provisions in the absence of FERC guidance and also requiring sellers to file based on PJM’s proposed rules.

“To avoid a ‘self-fulfilling prophecy’ of frustrating the ability of PJM to implement the substitute Tariff provisions it served up to the commission in this proceeding, PJM believes that for the moment, it is prudent to continue to require submittals under both the new proposed and existing Tariff provisions,” PJM said in its March 11 informational filing.

The RTO went on to say FERC’s inaction grows more problematic every day.

“A timely comprehensive ruling by the commission is clearly needed as we approach the August BRA and the various preparatory deadlines for submittals by market participants leading up to the August auction,” PJM said in the filing. “However, in the interim and at least for the present upcoming deadlines, PJM believes it prudent to continue, as it has done in other instances, to proceed down a path requiring submittals under both the existing market rules as well as the PJM proposed market rules.”

PJM pointed out that while it has previously conducted auctions in the face of pending Section 205 filings and Section 206 complaints, “it has not conducted an auction when there has already been a commission finding that its existing capacity market rules are unjust and unreasonable with no established just and reasonable replacement rate in place — as is the circumstance PJM finds itself in now.”

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