By Christen Smith
The Joint Consumer Advocates sent a letter April 1 advocating for a temporary delay of the Base Residual Auction currently planned for August, contending it’s the best course of action to avoid possible legal and financial ramifications.
“If auctions are rerun, results refunded or other action taken, it is ultimately the end-use customers, including residential customers, who will bear those risks,” the group said. “These customers are least able to hedge against those risks.”
Likewise, a coalition of utility companies — including Exelon, American Municipal Power, Dominion Energy, EDP Renewables, Avangrid, NextEra Energy Resources, Public Service Enterprise Group and Talen Energy Marketing — said delaying the auction until April 2020 guaranteed the most time for stakeholders to adapt to any market rule changes handed down by FERC in the coming year. Seven dockets remain outstanding, the companies pointed out.
“By all public accounts, commission action does not appear imminent,” the utilities said in their March 29 letter to the board. “Given this inaction, the same concerns that led PJM to reschedule the 2022/23 BRA last August apply with equal force now. If anything, the need for clarity on auction scheduling is more severe now than it was last fall.”
The letters come a week after PJM staff presented the Markets and Reliability Committee with four options for the August BRA, including do nothing and run the auction under current rules; file a delay waiver; file a request to confirm existing rules for the interim; or propose an interim rate. Each option came with considerable drawbacks, PJM’s Stu Bresler said during a March 21 MRC meeting. (See PJM Mulls Options for August Capacity Auction.)
It could be the second time PJM decides to delay the BRA after a June 2018 FERC ruling determined its minimum offer price rule (MOPR) was unjust and unreasonable. The RTO proposed a new rate in October and had hoped for a ruling from the commission by March 15 to no avail. (See PJM to FERC: Hurry Up with Auction Guidance.)
Although the utility companies want a delay of eight months — just six weeks before the regularly scheduled May 2020 BRA — consumer advocates want the briefest postponement possible, noting the competing interests of market participants, state utility commissions, legislatures and stakeholders.
“In that [first] waiver request, PJM stated that rescheduling the 2022/23 BRA was appropriate to allow stakeholders, PJM and FERC time to develop and establish appropriate replacement rules within a time frame that allows for the conduct of the BRA in an orderly manner,” the advocates said in their letter. “It is important that the PJM board not lose sight of these goals. PJM’s capacity market represents a large portion of the costs passed along to residential customers throughout the PJM footprint. Uncertainty in market rules and the permanence of market results can increase bids, which in turn increases costs.”
Bresler said PJM staff will reveal their decision for the auction at the April 10 meeting of the Market Implementation Committee.