Members Set One Last Forum for Reserve Pricing Compromise
Correction: In the previous version of this story, the author of the fifth energy reserve pricing proposal was misidentified. It is Vistra Energy.
PJM members on Thursday rejected five proposals to revise energy reserve pricing rules, but agreed to convene one last time before the February meeting of the Board of Managers in the hope of devising a compromise.
The PJM Board in December gave members a Jan. 31 deadline to address six reserve pricing issues before it plans to file its own proposal with the Federal Energy Regulatory Commission (FERC). At that time, the Energy Price Formation Senior Task Force had been deliberating nearly a year without reaching consensus on a path forward.
After receiving the Board directive, the task force met five more times and developed four proposals, sponsored by PJM; Monitoring Analytics, the independent market monitor; Calpine; and the Office of People’s Counsel for the District of Columbia (DC-OPC).
At the Markets and Reliability Committee (MRC) meeting Thursday, none succeeded in garnering the two-thirds majority necessary to be taken up by the Members Committee later in the day. A fifth proposal, moved at the meeting by Vistra Energy, also was rejected.
Out of options, members voted to hold a special Members Committee meeting no later than Feb. 8 – after the Board’s stated deadline, but before the Board meets – for a last chance at compromise.
Consensus – or lack thereof – will make the difference between whether PJM submits a Section 205 or a Section 206 filing to FERC. A 205 indicates member consensus and does not obligate the filer to prove that current provisions are not just and reasonable. A 205 filing requires FERC to respond within 60 days. A 206 filing is made unilaterally by PJM, which must prove current provisions are not just and reasonable, and does not require FERC to act within a timeline.
