Monday, October 23, 2017

New FTR Task Force on the Way for PJM?

By Rory D. Sweeney

VALLEY FORGE, Pa. — With several changes under consideration for its financial transmission rights processes, could PJM be forming another FTR task force?

PJM convened task forces in 2011 and again in 2015 to address FTR underfunding.

At Wednesday’s Market Implementation Committee meeting, Direct Energy’s Jeff Whitehead presented a proposed problem statement and issue charge to address the allocation of day-ahead surplus congestion funds and FTR auction revenue surplus funds.

Lieberman | © RTO Insider

Other stakeholders immediately questioned the proposed language, concerned that it seemed to “presuppose” a solution. Whitehead and other sponsors of the problem statement, including Steve Lieberman of American Municipal Power and John Rohrbach of ACES, representing the Southern Maryland Electric Cooperative, agreed to revise it.

PJM’s Asanga Perera supported the proposal, saying the RTO attempted to implement it but was told by FERC it should go through the stakeholder process. Independent Market Monitor Joe Bowring favored it as well.

Barry Trayers of Citigroup Energy felt it remained too narrowly focused. “There’s a lot of moving parts and this misses a ton of them,” he said.

Whitehead defended the initiative, saying FERC narrowed the scope with its September order directing PJM to allocate balancing congestion costs to real-time load. By removing a major source of FTR underfunding, he said, the existing funding sources can be reviewed and removed if unnecessary. (See FERC Finds PJM ARR/FTR Market Design Flawed; Rejects Proposed Fix.)

“But I guess we’re going to talk about that in the FTR task force,” Whitehead said.

| PJM

His issue charge does not call for creating a task force — instead suggesting the issue be addressed by the MIC.

But there are other FTR issues pending as well.  Later in the meeting, Perera discussed several other FTR updates, including additional information on the delayed results for the March 2017 FTR auction. He said he asked other RTOs about their processes.

“They all said PJM’s process is extremely complicated,” he said. “None of them have any overlapping periods like we do.”

Perera proposed removing the single quarterly auction that overlaps monthly auctions or developing software upgrades to speed up the solution time. (See “FTR Lateness Blamed on High-Volume Period,” PJM Market Implementation Committee Briefs.)

“Hardware, software, market structure — there are things that can be done better than the one-off solution of killing one quarter,” DC Energy’s Bruce Bleiweis said.

Haas (left) and Bowring | © RTO Insider

“The IMM supports PJM’s proposal to remove the overlapping-period quarterly auction as a solution to the issue, at least as a stop-gap measure. The monthly component product periods of the quarter will still be available and market-sensitive auction results will be made available on a more timely basis,” said Howard Haas, the Monitor’s chief economist.

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