PJM Incremental Auction Revenue Rights Model Development and Analysis

Transcription

1 PJM Incremental Auction Revenue Rights Model Development and Analysis PJM IARR Analysis This document describes the PJM Incremental ARR model development and evaluation process. Incremental ARRs (IARRs) are Auction Revenue Rights provided to customers who provide incremental ARR capability on the PJM system. These rights are available through the PJM Interconnection process. The model utilized for PJM s Incremental ARR analysis is a markets model. In particular, this document describes the evaluation used for Attachment EE (Elective Upgrade Auction Revenue Rights) and Merchant and Generation Interconnection IARR requests. This document should be used as an informational only source and is not a substitute for the PJM Tariff, Operating Agreement, or Manual Language. A. Annual ARR Allocation Impact on IARRs: 1. During each round of the Annual ARR allocation, Load Serving Entities may request ARRs that source at generator locations and sink at the location for which they are serving Load. In addition, Firm Point to Point Transmission customers may request ARRs consistent with the source and sink of their Point to Point reservation. 2. In Stage 1A of the Annual Allocation, all ARRs requested are guaranteed to be awarded per PJM Operating Agreement and Tariff requirements. Therefore, infeasible Annual ARRs may be allocated each year. PJM is required to derive upgrades to fix the qualified infeasibilities if there are not already upgrades approved in the existing PJM Regional Transmission Expansion Process (RTEP). Therefore, ARRs may have been over allocated preceding any IARR requests. However, IARR holders are only responsible for addressing the incremental impact of their IARR requests on the transmission system. 3. ARRs are prorated in Stage 1B and each round of Stage 2 of the Annual ARR Allocation based on the requested ARR paths and the impact on each constraint. Proration results in ARR requests not being fully awarded. For example, if there is a single line overloaded because of the requested ARRs then PJM will prorate the requested ARRs that have an impact on the this line until the flow is reduced at or below the limit of the facility. Facilities may also be prorated to a portion of the line rating to account for operational impacts. Such operational impacts could be a result of transmission or generator outages, switching, voltage surrogates, PAR impacts, and any other proxy type rating used to operate the system in a reliable and efficient manner. The goal of the simultaneous feasibility determination is to ensure that there are sufficient revenues from Transmission Congestion Charges to satisfy all Financial Transmission Rights obligations and to ensure that there are sufficient revenues from the annual Financial Transmission Right Auction to satisfy all Auction Revenue Rights obligations In many instances there are multiple facilities in the same electrical vicinity that are overloaded because of the requested ARRs. In these situations, PJM must select one of these overloaded facilities to use for prorating the requested ARRs. The selection will be based on the degree of violation of the overloaded facilities as a result of the requested ARRs. The impact of prorating ARR requests for one facility may be a reduction of flow in the other overloaded facilities in that same electrical vicinity. The result is that although multiple facilities were overloaded, only one facility 1 PJM Tariff and Operating Agreement Section P age

2 was required to be prorated. The entire set of overloaded facilities are actually limiting in the allocation although only one facility may have been prorated. B. IARR Model Development: Incremental ARRs are evaluated utilizing two separate power flow models. These models are derived from the Annual ARR allocation and the 10 year Stage 1A analysis as described below. The full details of the model used for the Annual ARR allocation and the 10 year Stage 1A analysis is not available to PJM members because of confidentiality requirements associated with ARRs. 1. The Base Incremental ARR model is originated from the Annual ARR allocation network model with the following inclusions and changes: a. All transmission outages modeled in the Annual ARR allocation will be removed. b. The Injections (Sources) and Withdrawals (Sinks) in the Base IARR model consists of approved annual ARRs, approved IARRs, uncompensated power flow (Loop Flow), and Grandfathered Transmission Rights. In addition, potential and approved Residual ARRs are included which are allocated as a result of retuned to service Annual ARR allocation modeled transmission outages. c. Transmission facilities that were limiting in the Annual ARR allocation are identified and monitored in all IARR analysis. These facilities were fully allocated in the Annual ARR allocation which resulted in Network and Point-to-Point customers not acquiring all of their requested ARRs. Additional IARRs cannot be added that impact any of these facilities without the need for upgrades. d. In addition, all PJM monitored facilities, market contingencies, and other necessary facilities and modeling as included in the Annual ARR allocation are included. 2. The 10-year Incremental Base model is originated from the Annual ARR allocation network model with the following inclusions and changes: a. All transmission outages modeled in the Annual ARR process will be removed. b. The Injections (Sources) and Withdrawals (Sinks) in the Base IARR model consists of approved annual Stage 1A ARRs, approved IARRs, uncompensated power flow (Loop Flow), and Grandfathered Transmission Rights. c. Injections and Withdrawals are adjusted to reflect increased ARR requests associated with using a new Zonal Base Load projection calculated from the 10 year Load Forecast growth rate. 1) Requests for each Zone are limited by the updated Zonal Base Load and determined from historical LMPs. d. Transmission facilities that were over allocated in Stage 1A of the Annual ARR allocation are identified along with any other new facility as a result of the increased ARR requests. IARRs cannot be added that impact any of these facilities without the need for transmission upgrades. Note that overloads on facilities identified as over allocated or infeasible in stage 1 A do not have to be relieved with IARR requests. Only the incremental impact, as measured using the IARR request impact on the facility, will need to be addressed with an upgrade. e. In addition, all PJM monitored facilities, market contingencies, and other necessary facilities and modeling as included in the Annual ARR allocation are included. 2 P age

3 C. Incremental IARR Analysis 1. Incremental ARR Analysis for Attachment EE (Elective Upgrade Auction Revenue Rights) requests Section 7.8 of Schedule 1 of the Operating Agreement sets forth provisions to permit any party to request and obtain Incremental ARRs by agreeing to fund upgrades necessary to support the requested rights. Attachment EE to the PJM Tariff is the form of the Upgrade request. Requests will specify a source, sink, and MW amount. PJM will assess the simultaneous feasibility of the requested Incremental ARRs and all outstanding ARRs against the base system ARR capability and stage 1A ARR capability for the future 10 year period. Based on this preliminary assessment, PJM will conduct studies to determine the upgrades required to accommodate the requested Incremental ARRs and ensure that all outstanding ARRs are simultaneously feasible. If a party elects to fund the upgrades PJM will notify the party of the actual amount of Incremental ARRs that will be awarded based on the allocation process established pursuant to Section 231 of Part VI of the Tariff. The PJM Market Simulation department receives the IARR request and performs an analysis per section 7.8 (b) of PJM Tariff and Operating Agreement 2. PJM will determine if an IARR request is simultaneously feasible per section 7.5 (a) of the PJM Tariff and Operating Agreement 3. Therefore, PJM will use a model that best represents expected conditions to help ensure FTR Revenue adequacy while ensuring ARR rights are fully funded. PJM will utilize a transfer analysis to determine the incremental upgrades as a result of the requested IARRs impact on the current base IARR model and base 10 year Stage 1A model. Facilities impacted by the IARR request for which were limiting in the base model will be identified as well as any new facilities for which the IARR request causes flow to exceed its thermal limit or flow restriction, if applicable. Facilities identified in the IARR analysis will need to be addressed through the identification of upgrades (b) The Office of the Interconnection shall assess the simultaneous feasibility of the requested Incremental Auction Revenue Rights and the outstanding Auction Revenue Rights against the existing base system Auction Revenue Right capability and stage 1A Auction Revenue Right capability for the future 10 year period and based on this preliminary assessment it shall conduct studies to determine the upgrades required to accommodate the requested Incremental Auction Revenue Rights and ensure all outstanding Auction Revenue Rights are simultaneously feasible (a) The Office of the Interconnection shall make the simultaneous feasibility determinations specified herein using appropriate power flow models of contingency-constrained dispatch. Such determinations shall take into account outages of both individual generation units and transmission facilities and shall be based on reasonable assumptions about the configuration and availability of transmission capability during the period covered by the auction that are not inconsistent with the determination of the deliverability of Generation Capacity Resources under the Reliability Assurance Agreement. The goal of the simultaneous feasibility determination shall be to ensure that there are sufficient revenues from Transmission Congestion Charges to satisfy all Financial Transmission Rights Obligations for the auction period under expected conditions and to ensure that there are sufficient revenues from the annual Financial Transmission Right Auction to satisfy all Auction Revenue Rights obligations. 3 P age

4 2. Incremental ARR Analysis for Merchant Transmission and Generation Interconnection requests: Transmission expansion projects associated with new generation interconnection and Merchant Transmission Expansion projects may be allocated incremental ARRs in a three-round allocation process in which the customer requests incremental ARRs for three pairs of point-to-point combinations (one point-to-point combination is requested per round). In each round, one-third of the Incremental ARRs made available by the expansion project will be assigned to the requester. After each of rounds one and two, the requester may accept the assigned Incremental ARRs or refuse them. Acceptance of the assignment will remove the assigned Incremental ARRs from availability in the next rounds. Refusal of the assignment will result in the Incremental ARR being available for the next round. The Incremental ARR assignment made in round three will be final and binding. The final and binding Incremental Auction Revenue Right assignment for a requested point-to-point combination in each round shall in no event be less than one third of 80% and no greater than one-third of 100% of the non-binding estimate of Incremental Auction Revenue Rights for that point-to-point combination that was provided to the New Service Customer. PJM will determine if an IARR requests are simultaneously feasible per section 7.5 (a) of the PJM Tariff and Operating Agreement 3. Therefore, PJM will use a model that best represents expected conditions to help ensure FTR Revenue adequacy while ensuring ARR rights are fully funded. PJM will utilize a transfer analysis to determine the incremental upgrades as a result of the requested IARRs impact on the current base IARR model and base 10 year Stage 1A model. Facilities impacted by the IARR request for which were limiting in the base model will be identified as well as any new facilities for which the IARR request causes flow to exceed its thermal limit or flow restriction, if applicable. Facilities identified in the IARR analysis will need to be addressed through the identification of upgrades. 4 P age

5 APPENDIX A: IARR Analysis Example The following example demonstrates an IARR request impact on a three bus system in which each bus is already fully subscribed in the Annual ARR allocation. Transmission Line A-C was upgraded but zero IARRs can be awarded because Transmission lines A-B and A-D are now oversubscribed as a result of the IARR. ARR Base Conditions after Annual Allocation paths fully subscribed Diagram demonstrates that the flows on facilities after the Annual ARR allocation are fully subscribed ARR Conditions with upgrade modeled and 1 MW IARR request from A to C Diagram demonstrates that Line A-C is upgraded but Line A-B and Line A-D are now oversubscribed because of the IARR request. 5 P age