PJM, MISO ‘very close to agreement’ on pseudo-tie language
The PJM Interconnection and the Midcontinent Independent System Operator are “very close to agreement” regarding joint operating agreement provisions to facilitate the establishment of pseudo-ties for capacity resources awarded in the former’s capacity performance auction, stakeholders heard Thursday.
During a PJM Markets and Reliability Committee meeting, Jacqulynn Hugee, PJM associate general counsel, provided several pseudo-tie-related documents for the committee’s endorsement, but that was ultimately postponed until its July meeting, to give members more time to examine the documents.
Pseudo-ties allow control of a generating unit to be transferred in real-time from the balancing authority where the unit is physically located to a balancing authority in a different location that has purchased the unit’s capacity.
PJM’s neighboring ISOs — especially MISO — have argued that pseudo-ties boost costs for all concerned and should be eliminated.
Tariff revisions PJM filed with the US Federal Energy Regulatory Commission sought to remedy problems the grid operator has encountered in the past and challenges that could arise in the future with pseudo-ties.
The grid operator proposed new standards and requirements it said were narrowly tailored to resolve “specific modeling, congestion management, planning, and operational concerns with the current pseudo-tie rules.”
However, FERC subsequently said the language was deficient, and PJM has asked for an extension of time in which to respond.
PJM wants to use pseudo-ties as a way to ensure external resources that are awarded capacity in the annual capacity performance auction can physically meet their requirements when called upon, but David Patton, president of Potomac Economics, MISO’s independent market monitor, argues that such an agreement could needlessly hinder MISO’s ability to maintain reliability.
The JOA language described by Hugee Thursday would acknowledge that MISO could override PJM dispatch orders for pseudo-tied resources located in MISO, if need be for reliability purposes.
If MISO did override such a PJM dispatch order during a performance assessment hour, “what would happen is the unit would probably be penalized,” Hugee said. The pseudo-tied unit would know that risk when it committed to PJM’s capacity performance auction, she said.
The pseudo-tie documents presented Thursday include a pro-forma pseudo-tie agreement, a pseudo-tie reimbursement agreement for a pseudo-tie into PJM, associated tariff and operating agreement revisions, and a dynamic schedule agreement.
“It would be nice to tie everything up in one big bow” to be presented to FERC as a package, Hugee said, as MISO makes a corresponding filing.