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Enron Mail |
The Commission issued a couple of orders in PJM last week:
PJM=01,s Load Response Program: FERC approved implementation of two load= =20 response pilot programs proposed by PJM which will be effective June 1, 200= 1=20 through May 31, 2002. Under the first program, referred to as the =01&Emer= gency=20 Option,=018 a PJM member may sign up to be a participant in the program and= will=20 be paid the higher of the relevant zonal LMP or $500/MWh for the actual kWh= =20 relief provided when the PJM member nominates load reduction in response to= a=20 request from PJM. Under the second option, referred to as the =01&Economic= =20 Option,=018 the PJM member will be able to reduce load in response to econo= mic=20 signals, regardless of whether emergency conditions exist. PJM will bill t= he=20 LSE serving the end-use customer the LMP that would have been charged absen= t=20 the reduction. PJM will then refund to the LSE the retail generation and= =20 transmission charges that the LSE would have received had the load not been= =20 reduced. The difference between the amount billed and refunded to the LSE= =20 will be paid to the end-user. Several customers opposed PJM=01,s programs, particularly the Economic Opti= on. =20 However, FERC found that both programs allow end use customers to see price= s=20 and respond to them when it is economically beneficial for them to do so. = =20 FERC noted that because PJM's current market structure does not communicate= =20 wholesale prices to retail customers in real time, they have no incentive t= o=20 reduce demand when prices increase. FERC finds that PJM's plan will, in=20 part, fix this flaw in its market structure. PJM is required to file a=20 report with FERC by the end of the year evaluating the effectiveness of the= =20 program. Changes to PJM's Reliability Assurance Agreement (RAA): FERC also approved= =20 PJM's proposed changes to its RAA, effective June 1. PJM had requested FER= C=20 authorization to change the RAA by i) adjusting the time period over which = an=20 LSE must commit generation resources to PJM to meet its capacity obligation= s=20 under the RAA, from a daily to a seasonal commitment; ii) adjusting the=20 deficiency charge provisions to provide for a seasonal, rather than a daily= ,=20 penalty for LSEs; and iii) requiring generation owners to commit excess=20 capacity to PJM seasonally, rather than daily, in order to participate in a= ny=20 distribution of revenues from capacity deficiency charges paid by LSEs. EP= MI=20 supported PJM's changes, stating that although the ICAP requirement should = be=20 eliminated entirely, the proposed changes are a step in the right direction= =20 in resolving the delisting problem. In approving the changes, FERC stated that moving from daily to seasonal=20 deficiency charges discourages generators from delisting capacity during th= e=20 summer and gives LSEs the incentive to meet their capacity obligations,=20 thereby helping PJM to meet its short-term and long-term reliability goals.= =20 FERC also said that PJM's Market Monitoring Unit will be able to monitor=20 generator gaming behavior and take appropriate action if necessary.
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