UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION

Transcription

1 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Capacity Deliverability Across the ) Midwest Independent Transmission System ) Docket No. AD Operator, Inc./PJM Interconnection, L.L.C. ) Seam COMMENTS OF THE ELECTRIC POWER SUPPLY ASSOCIATION The Electric Power Supply Association ( EPSA ) 1 respectfully submits the following comments in response to the Midwest Independent Transmission System Operator, Inc. s ( MISO ) request for expedited issuance of an order by the Federal Energy Regulatory Commission ( FERC or Commission ) filed on January 3, MISO seeks expedited Commission action directing MISO and PJM Interconnection, L.L.C. ( PJM ) to remove barriers to generation capacity deliverability between MISO and PJM. 3 MISO argues that the Commission must act to remove unjust and unreasonable barriers and to prevent substantial adverse impacts on both the MISO and PJM markets. 4 1 EPSA is the national trade association representing competitive power suppliers, including generators and marketers. Competitive suppliers, which, collectively, account for 40 percent of the installed generating capacity in the United States, provide reliable and competitively priced electricity from environmentally responsible facilities. EPSA seeks to bring the benefits of competition to all power customers. The comments contained in this filing represent the position of EPSA as an organization, but not necessarily the views of any particular member with respect to any issue. 2 Capacity Deliverability Across the Midwest Independent Transmission System Operator, Inc./PJM Interconnection, L.L.C. Seam, Request for Expedited Issuance of Order, Docket No. AD (January 3, 2013) ( MISO January 3, 2013 Filing ). 3 MISO January 3, 2013 Filing at 1. 4 Id.

2 EPSA opposes MISO s request for expedited action on the basis that (i) such a request is premature, (ii) MISO s filing is unwarranted in this administrative docket, and (iii) the proposal is flawed and does not address the issues MISO seeks to solve. As evidenced by its previous comments in this docket, EPSA supports the Commission s initiative to gather information on the issues related to seams between MISO and PJM, and in particular to fully understand the basis for any rules that are perceived as a barrier between the MISO and PJM markets. EPSA understands and appreciates that reliability and the integrity of both the PJM and MISO markets are foundational for the market participants in each region, which includes numerous EPSA members that serve generation and load on both sides of the MISO/PJM seam. As such, EPSA respectfully requests that the Commission consider its comments in response to MISO s request for expedited action and deny MISO s request. I. COMMUNICATIONS All pleadings, correspondence and other communications concerning this proceeding should be directed to: Nancy Bagot, Vice President of Regulatory Affairs Electric Power Supply Association 1401 New York Avenue, N.W., 12 th Floor Washington, D.C (202) nancyb@epsa.org II. COMMENTS In June 2012, the Commission initiated a proceeding in this administrative docket to evaluate whether existing rules on transfer capability act as barriers to the delivery of generation capacity between MISO and PJM and, if such barriers 2

3 exist, if any action should be taken to mitigate such barriers. 5 Several parties filed comments and reply comments in response to the Commission s notice. Since the request for comments, MISO and PJM have been discussing the issues raised in this docket through the Joint and Common Market ( JCM ) process under the Joint Operating Agreement between [MISO] and [PJM] ( JOA ). Despite these ongoing discussions, on January 3, 2013 a mere six months and eight days after the Commission first issued its request for comments MISO filed a request for expedited action in this docket to force MISO and PJM to remove barriers to capacity portability and deliverability between the two markets as MISO defines them. EPSA opposes this request, for the reasons set forth below, and urges the Commission to deny MISO s request. A. MISO S FILING AMOUNTS TO A REQUEST UNDER SECTION 206 AND IS AN INAPPROPRIATE MOTION WITHIN THIS ADMINISTRATIVE DOCKET The Commission initiated this administrative docket in an attempt to explore whether any barriers to capacity deliverability exist between MISO and PJM and, if so, to what extent rules should be modified to mitigate such barriers. In its request for comments, the Commission specifically recognized the existence of the JOA and inquired about the possibility of using the existing JOA procedures to address any such issues. 6 Despite the overwhelming sentiment 5 Capacity Deliverability Across the Midwest Independent Transmission System Operator, Inc./PJM Interconnection, L.L.C. Seam, 139 FERC 61,200 (June 11, 2012) ( Request for Comments ). 6 Request for Comments at 4. 3

4 from commenters that MISO and PJM should address any concerns regarding capacity deliverability through that joint process, MISO now argues that the rules governing capacity deliverability are unjust and unreasonable and require the circumvention of that ongoing process at the direction of the Commission. MISO states in its filing that the record compiled in this proceeding, as well as other proceedings, establishes that the current market rules and operating protocols of PJM and MISO that restrict generation capacity deliverability between the two RTOs are unjust, unreasonable, and unduly discriminatory or preferential. 7 An administrative docket is not the appropriate place for MISO to make these assertions. Rather, if MISO believes there is substantive evidence that the current market rules are unjust, unreasonable, and unduly discriminatory, then MISO must initiate a Section 206 proceeding, where it will have burden of supporting its assertions and an evidentiary record can be established to make a sufficient showing as to MISO s claims. The Commission cannot grant MISO s request in the instant docket because a full administrative record has yet to be developed. Such a determination that market rules are unjust, unreasonable, and unduly discriminatory, in violation of the Federal Power Act, 8 requires the Commission to fully consider all relevant facts. MISO s request in the instant docket does not ensure such consideration and, as such, EPSA urges the Commission to deny MISO s request. 7 MISO January 3, 2013 Filing at U.S.C. 824d (2000). 4

5 B. MISO S REQUEST IS PREMATURE;THE JCM PROCESS SHOULD BE ALLOWED TO ADDRESS CAPACITY PORTABILITY ISSUES As previously stated, MISO and PJM, and their stakeholders, have been addressing the issues raised as a result of the Commission s Request for Comments through the JCM process. MISO acknowledges in its request that [t]o date, the JCM process has provided for much robust discussion and opportunities for all interested parties to engage in and debate this topic. 9 EPSA argues that MISO s request for an expedited order to sidestep that process in order to address these issues is premature and the Commission should allow the JCM process to continue to work. While MISO s filing states that the Commission initiated this inquiry more than six months ago, which is not in dispute, that time period does not represent a belabored or broken process, and in fact has not offered a sufficient opportunity to fully vet and evaluate the issues related to capacity deliverability across MISO and PJM. Stakeholders from both MISO and PJM have been actively involved in discussing these issues, holding several meetings over the last six months, and the discussions and work among the stakeholders, RTO administrations, and other interested parties continues to move forward. Furthermore, as evidenced by its previous comments submitted in this docket, EPSA and its members strongly support the efforts to consider seams issues and to develop meaningful and effective solutions to address capacity deliverability issues. EPSA believes that the current process involving the JCM and stakeholders is the best avenue to develop a strong foundation upon which 9 MISO January 3, 2013 Filing at 3. 5

6 the markets can accomplish those goals, and appropriately reflects market participants priority of capacity portability concerns among the numerous seams and market issues to be addressed. We recognize that accomplishing such a complex goal will take some time, and that such time is necessary to ensure all impacted parties are involved, all concerns are raised and addressed and, ultimately, to build the best foundation to support a strong and reliable capacity construct over the MISO and PJM seam. EPSA asserts that six months is not enough time to build that necessary foundation and establish a proper framework to address capacity deliverability between MISO and PJM, two markets that enter this deliberation with vastly different capacity market constructs. The disparity between the current capacity constructs in MISO and PJM represents a level of complexity that belies MISO s claims that six months should have been a sufficient period in which to fashion a market-to-market approach which serves and supports each market equally. In addition to jumping the gun and ignoring the ongoing JCM process, MISO has failed to provide any new or substantial evidence to support its request for expedited action. Throughout its filing, MISO points to its Capacity Deliverability White Paper 10 ( MISO White Paper ) as evidence that the proposal set forth by MISO will lead to a just and reasonable solution to the capacity deliverability issue. EPSA notes that the MISO White Paper is just one possible solution among many that are currently being considered and discussed among 10 MISO Capacity Deliverability White Paper, June s%20and%20whitepapers/miso%20capacity%20deliverability%20whitepaper.pdf 6

7 the stakeholders and market participants within MISO and PJM. Therefore, the JCM process should continue to move forward to ensure that all potential remedies are fully vetted in an effort to develop a strong capacity deliverability market across MISO and PJM. MISO s attempt to force the process by requesting expedited Commission action based solely on its own white paper is inappropriate and should be denied by the Commission. C. MISO S PROPOSED TIMELINES AND PROCEDURES ARE UNREALISTIC TO ADDRESS AN IMPORTANT AND COMPLEX ISSUE EPSA is concerned that the framework and process proposed by MISO could negatively impact both RTOs and their respective stakeholders and market participants. In addition to proposing a timeframe that would not allow for sufficient discussion on how to develop rules to address the capacity deliverability issues between MISO and PJM, part of MISO s proposal could also remove PJM and MISO stakeholders from the negotiations and subsequent process. MISO s proposal sets forth two options for how the Commission should direct MISO and PJM to address these issues. The first option ( Option 1 ) would require PJM and MISO to identify the barriers across the seam and submit a report on those barriers to a committee created by the Organization of PJM States and the Organization of MISO States. Such a committee would then be required to determine what steps MISO and PJM should take, including any necessary tariff filings with the Commission, to facilitate the removal of such barriers. EPSA is deeply concerned that such a process represents an end-run 7

8 around majority of stakeholders in both MISO and PJM and would be unduly preferential to one group of stakeholders the states. As stated above, the JCM process is currently ongoing and all interested stakeholders are engaged in discussions on how to address these issues. Not only is it inappropriate and unreasonable to place the responsibility of directing what action should take place with a committee formed by the Organization of PJM States and Organization of MISO States, MISO s Option 1 would also discard and disregard a significant amount of meaningful discussions and work already accomplished by the more robust stakeholder group involved in the JCM process. Further, given the tight timeline MISO proposes in Option 1, it is unlikely that such a process would produce a meaningful or workable result. EPSA also notes that the second option MISO proposes ( Option 2 ) sets overly optimistic deadlines and benchmarks, particularly given the complex nature of the issues surrounding capacity deliverability across two major RTOs with vastly different capacity procurement constructs. Such unrealistic deadlines could also lead to parties being forced to act without being permitted the necessary time for discussion and deliberation. EPSA s concern stems from a desire to support strong, well-developed markets and we present these comments to ensure that the best possible framework is developed to allow all interested parties to engage in that effort and ensure reliability is maintained in each regional market. As such, EPSA believes the current JCM process should be permitted to continue and requests that the Commission deny MISO s request for expedited action. 8

9 III. CONCLUSION Wherefore, EPSA respectfully requests that the Commission deny MISO s request for expedited action and let the JCM process continue to establish the framework upon which all interested parties can address these issues. Respectfully Submitted, Nancy Bagot, Vice President of Regulatory Affairs Melissa Mitchell, Director of Regulatory Affairs and Counsel Electric Power Supply Association 1401 New York Avenue, NW, 12th Floor Washington, DC 2000 (202) nbagot@epsa.org January 18,

10 CERTIFICATE OF SERVICE I hereby certify that I have served a copy of the comments via upon Each person designated on the official service list compiled by the Secretary in this proceeding. Dated at Washington, D.C. January 18, Nancy Bagot, VP of Regulatory Affairs 10