Capping a complicated stakeholder process, the Members Committee at its October 1 meeting passed by acclamation a proposal to raise the cap on offers in the PJM Energy Market.
Earlier in the day, the MRC overwhelmingly approved the measure in in a sector-weighted 4.3 vote in favor. The MC accepted that vote by acclamation.
PJM will file the Tariff change with the Federal Energy Regulatory Commission shortly.
The proposal raises PJM’s $1,000/megawatt-hour energy offer cap, which was put in place 18 years ago.
Incremental energy cost-based offers capped at $2000/MWh and allowed to set price
According to Manual 15 and a generator’s fuel cost policy
Costs in excess of $2000/MWh recovered through make-whole payments
According to Manual 15 and the generator’s fuel cost policy
Market-based offers for individual units allowed to rise with their cost-based offers
No changes in the following:
10 percent adder
Shortage penalty factors
Startup, no-load compensation
PJM clarified that offers above $2,000 would still be dispatched in merit order. PJM committed to providing a detailed analysis for any offers about $1,000.
The votes were the culmination of a process that saw stakeholders work together to address differences across the various sectors. Direct Energy, ODEC, the Independent Market Monitor and P3 each developed proposals, then worked to fashion the consensus.