By Christen Smith
VALLEY FORGE, Pa. — Members of the PJM Market Implementation Committee on Wednesday set up a showdown over whether the RTO can force capacity resources into energy-only status for failing to meet Capacity Performance requirements.
About 61% of MIC voters endorsed an Exelon proposal that would allow capacity resources to voluntarily switch to energy-only status but would not allow PJM to force such a switch. Eighty-five percent also said they preferred the Exelon rules over those proposed by PJM and approved by the MIC in November. The votes made the Exelon proposal eligible to be considered by the Markets and Reliability Committee next month.
Both proposals, which would require changes to Manual 18 and the Tariff, will receive first reads at the March 21 MRC meeting. However, the November proposal will be voted on first at the April 25 MRC meeting because it was previously approved by the MIC, winning 79% support. The Exelon proposal will only get a vote if the November proposal fails to clear the necessary two-thirds sector-weighted threshold.
MIC members Wednesday also preferred Exelon’s proposal over a joint plan from PJM and the Independent Market Monitor that received only 35% support, below the 50% threshold for consideration by the MRC. About 49% preferred the PJM-IMM plan to the November proposal.
The original MIC-endorsed plan was remanded back to the committee in December after the MRC agreed further discussions were needed. It would require existing capacity resources not offered in three consecutive auctions to change to energy-only status. Capacity interconnection rights (CIRs) of such resources would be terminated one year from the switch to energy-only, unless the rights holder submits a new generation interconnection request within that year using those same CIRs.
The PJM-IMM proposal would have added to the November proposal a requirement that any resource receiving a must-offer exception file a plan showing how it will become able to satisfy CP requirements in order to retain capacity status. The requirement would be effective with the 2023/24 delivery year. Resources would be granted exceptions for no more than two auctions. (See PJM MIC to Vote on Alternative Must-offer Exception Rules.)
“Both [the original proposal and PJM-IMM addition] have a requirement for units with CP must-offer exceptions to go energy-only after a certain amount of time,” PJM’s Pat Bruno said. “The main difference between the two is the way that they would be required to go energy-only and how soon that would take effect.”
Exelon said it did not support a mandatory switch to energy-only because stakeholders were not in consensus on the issue, which raised equity issues over resources’ potential loss of CIRs. Intermittent resources are exempt from must-offer rules.
“We were able to support the compromise approach previously endorsed by the MIC,” Sharon Midgley, senior manager of wholesale market development for Exelon, said Wednesday. “Exelon does not support the PJM-IMM alternative proposal. We have concerns with the mandatory process and concerns with the CIR inequities between traditional generation resources and renewables.”
‘Unlevel Playing Field’
Other generation owners agreed with Exelon’s objections.
“If you have renewable resources that aren’t offering into auctions … they should probably forfeit CIRs for all the same reasons,” said David “Scarp” Scarpignato of Calpine. “Allowing energy-only wind resources to have CIRs and to say generators of other types aren’t allowed to is a completely unlevel playing field. It’s more than problematic. It’s contrary to the Operating Agreement.”
Consultant Roy Shanker agreed that PJM should subject renewables to the same requirements as traditional resources.
“If we can hold the CIR without being CP based on an exemption, then they get to do that,” he said. “To Scarp’s point, then they, just like everybody else, should be expected to forfeit CIRs under the same conditions. We passed the hurdle a long time ago that those definitions of capacity resources within CP being different going forward. They go hand in hand. To me, there’s no reason to partition between anyone.”
John Brodbeck of EDP Renewables argued companies like his pay for interconnection upgrades and receive CIRs in return. “When you pay for something, you want to own it,” he said.
Load interests, however, said generators’ focus on who owns CIRs muddles the issue. Carl Johnson of the PJM Public Power Coalition said some legacy generators stand to lose CIRs for which they never paid.
“Some may have [paid], many have not,” he said. “As topology has changed, a lot of legacy generators did not pay for them. Loads have.”