PJM members mark electricity price formation, transmission planning issues as board of directors | S&P Global Platts

2021-11-26 07:11:09 By : Ms. Daisy Cai

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The board of directors meets with industry representatives

Market design and transmission are on the agenda

The management committee of PJM Interconnection recently met with representatives of five power industry sectors. They expressed concerns about changes in energy market regulations, rising electricity prices, resource adequacy rates, transmission regulation and other issues.

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PJM summarized the topics discussed by its board of directors and stakeholder groups of major market participants in a note sent in late November 19.

Specifically, the board of directors met with representatives of the following departments:

Distributor Department End User Department Power Generation Owner Department Other Supplier Department Transmission Owner Department

Power generation owners partly proposed the future of the PJM capacity market. Participants expressed that they were concerned that the role of the PJM market in ensuring resource adequacy was subordinated to the adaptation of national resource preferences, rather than paying full attention to system reliability.

In recent years, the production capacity market has undergone major changes. The minimum quotation rule was first extended to almost all resources that receive state subsidies, which made them unlikely to be cleared in the production capacity market auction, but then the MOPR was relaxed, making the state-subsidized resources even greater. More room to clear the auction.

“Participants explained how the loss of investor confidence has affected the existing thermal resources and will therefore lead to resource adequacy and reliability issues,” PJM said.

PJM stated that power generation owners have provided views on the need to continue to focus on the capacity market to ensure that thermal resources are properly qualified and valued, as well as the need to focus on the four-year review process to ensure that they correctly reflect changing market dynamics. .

Participants also encouraged PJM to continue to study the possibility of including the cost of carbon dioxide emissions in its dispatch as a better than clean capacity product.

The end-user sector has increased the PJM energy market, expressing concerns about recent changes in electricity prices, including quick-start pricing reforms and operational reserve demand curve market reforms, and pointed out that these changes have not been supported by a wide range of members of the Federal Electricity Act, Article 206 program.

According to data from PJM's independent market monitoring agency, in September, 6.5% of the marginal resources in the real-time market adopted quick-start pricing and increased the overall real-time energy market price by 4%.

The extended ORDC will affect prices for most of the time after it takes effect on October 1, 2022, causing the PJM energy market price to exceed $14,000/MWh in an emergency.

End users encourage PJM to examine the impact of recent energy market reforms on pricing and ensure that circuit breakers are implemented as part of ORDC changes.

According to the letter, the transmission owner discussed the importance of PJM's leadership role in grid-connected queue process reform and the key independent role of PJM in planning, including the importance of scenario-based planning.

Regarding PJM’s plan to comply with Federal Energy Regulatory Commission Order No. 2222, which aims to increase the participation of distributed energy aggregation in the PJM market, transmission owners have put forward a view that PJM is "invading the distribution system and retail customer affairs." ", according to PJM's meeting summary.

Electricity distributors stated that they are concerned about PJM's changing fuel supply and increasing reliance on natural gas as a fuel source, noting that ensuring an adequate supply of natural gas is becoming a necessary part of reliability.

Participants urged PJM to focus on improving coordination/communication with pipelines and suppliers; adjusting natural gas and electricity days; visits/nominations during holidays and weekends; secure transportation, including the use of operating procedures; according to PJM, the priority and priority of services priority.

PJM stated that representatives of the "other supplier sector" reiterated the importance of the existing auction revenue rights/financial transmission rights structure because it has the dual purpose of "returning congestion costs to the load and realizing effective hedging of congestion costs."

They also expressed support for increasing FTR auctions and bidding points.

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