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December 5, 2016

05 December 2016

PJM Market Monitor Files Complaint Over Approved PJM Capacity Market Rule Change

On November 22, PJM’s Independent Market Monitor (IMM) filed a complaint regarding a rule change to PJM’s capacity market approved by the PJM Markets and Reliability Committee (MRC).  At the November 17 MRC meeting, the MRC approved—over objections from the IMM—changes to PJM’s Manual 18 to delete language that imposed conditions on early replacement transactions.  In response, the IMM filed a complaint at FERC arguing that the modified rules are unjust and unreasonable, inconsistent with competitive markets, and allow behavior that defeats a well-functioning market.  The IMM argues that the modified rules “provide incentives to offer paper capacity in the PJM capacity market and to suppress market prices for actual physical capacity in the PJM market.”  According to the IMM, “The modified rules allow behavior that would otherwise be considered prohibited market manipulation because behavior permitted under the modified rules defeats PJM’s well functioning market for physical capacity.”

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05 December 2016

PJM Market Monitor Files Complaint Ordering Production of Information

Also on November 22, PJM’s IMM filed a complaint requesting a market participant, American Electric Power Service Corp. (AEP), to provide the IMM with certain information that AEP allegedly refused to provide in response to information requests. According to the complaint, the IMM requested that AEP provide the data from which AEP calculates the variable operations and maintenance expense component of its cost-based offers, which was requested in order to determine whether the level of AEP’s cost inputs for cost-based offers raise market power concerns. The IMM claims that it is unable to obtain such information from an alternative source, so the IMM requests that FERC require AEP to provide the requested information within two weeks.

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05 December 2016

FERC Approves Permanent CAISO Tariff Revisions Related to Aliso Canyon Outage

On November 21, FERC approved CAISO’s proposal to keep in place a number of tariff revisions related to the limited operability of the Aliso Canyon natural gas storage facility. The filing makes permanent three CAISO tariff provisions that would otherwise have expired on November 30: (1) allowing scheduling coordinators to rebid commitment costs in CAISO’s real-time market if they were not committed in the day-ahead market or residual unit commitment process; (2) ensuring that CAISO’s short-term unit commitment process does not commit resources that did not submit bids into the real-time market unless they were scheduled or committed in the day-ahead market or had a real-time must-offer obligation; and (3) allowing scheduling coordinators to seek after-the-fact recovery of unrecovered commitment costs that exceed the commitment cost bid cap as a result of actual marginal fuel procurement costs, pursuant to a FPA section 205 filing at FERC. FERC found that CAISO’s proposed revisions are just and reasonable because they constitute appropriate improvements upon CAISO’s current tariff provisions that should result in a more efficient unit commitment process and enhance cost recovery.

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